Medicare will cover certain weight-loss drugs

Currently, federal law prevents Medicare Part D plans from covering obesity medications for weight loss alone. However, CMS' new guidance states that Medicare Part D plans can cover anti-obesity medications provided the drugs receive approval for "an additional medically accepted indication."

"For example, a drug that receives FDA approval for chronic weight management alone would not be considered a Part D drug," CMS said. "[But] if this same drug also receives FDA approval to treat diabetes or reduce the risk of major adverse cardiovascular events in adults with established cardiovascular disease and either obesity or overweight, then it would be considered a Part D drug for those specific uses only."

Earlier this month, FDA approved Wegovy for reducing the risk of heart attacks and strokes in patients with a history of cardiovascular disease who have a body-mass index above a specific threshold. A recent clinical trial found that Wegovy decreased risk of serious cardiovascular events by 20% compared to a placebo.

CMS noted its new guidance won't change coverage for other drugs with the same main ingredients as Wegovy, like Ozempic and Mounjaro, which are currently approved and covered for the treatment of Type 2 diabetes.

Reaction

Juliette Cubanski, deputy director of the Medicare policy program at KFF, said that Part D plans may use the coverage of Wegovy as a selling point during open enrollment this fall.

"This could be a selling point for plans that decide to cover it," she said. "There's a lot of demand for these medications."

However, Wegovy's high price tag could lead to higher additional costs for Medicare Part D beneficiaries, with Cubanski noting that it's "still a relatively expensive medication."

"This decision is a big win for manufacturers in making the case that GLP-1s are not just cosmetic drugs, but efficacious for chronic disease prevention," said Advisory Board's Gabriela Marmolejos. "But as we mentioned in our SELECT trial expert insight, access will remain an issue because of high costs, prior authorization hurdles, and supply constraints."

Currently, Wegovy's list price is more than $1,300 per month. According to an analysis published last year in the New England Journal of Medicine, almost 10 million Medicare beneficiaries have obesity, and paying for just a tenth of eligible members to get Wegovy could increase Part D spending by $26.8 billion, which is more than 18% of its annual payments.

That increased spending could lead to higher premiums for Part D beneficiaries, Cubanski said.

In addition, the drugs' high prices could make them eligible for drug price negotiations under the Inflation Reduction Act.  "I'll be interested to see how these potential price negotiations shake out," said Advisory Board's Karla Marlatt.

Moving forward, Marmolejos will be watching whether Novo Nordisk pursues other expanded indications (particularly those related to heart failure) that could enable further expansion of Medicare coverage of these drugs. (Loftus, Wall Street Journal, 3/21; Gilbert, Washington Post, 3/21; Frieden, MedPage Today, 3/21)

SELECT trial results demonstrate Wegovy's effectiveness in reducing the risk of serious cardiovascular events by 20%. We explain why access challenges, including high costs and limited coverage, continue to pose obstacles to its widespread use and what you should keep an eye on in the upcoming months.