Wegovy could change weight loss and health care. Who's gonna pay?

The drug companies behind Wegovy, Ozempic, and Mounjaro are lobbying lawmakers to get Medicare to cover the high cost of the viral weight loss drugs. Insurance companies and employers have resisted taking on the high price tag. Still, new data from Novo Nordisk, the company behind Ozempic and Wegovy, provides evidence that the latter "can have important secondary benefits, such as improved cardiovascular health, in people who don't have diabetes," The Wall Street Journal reported. The companies hope the study results will bolster their efforts to sway insurers to pay for the drugs.

Though initially approved to treat diabetes, some doctors have been prescribing Ozempic and Eli Lilly's Mounjaro as an off-label treatment for obesity. The Food and Drug Administration has already approved Wegovy as an anti-obesity treatment. But the drugs have a hefty price tag and cost over $1,000 monthly. The fact that Medicare has a 20-year ban on covering weight loss drugs is just another bump on an already uphill battle.

Novo Nordisk's trial showed that along with helping patients lose weight, the drug reduced the risk of heart attack or stroke by 20 percent in people without diabetes. The results of the company-funded study have yet to be published in a peer-reviewed journal, but the company says it plans to present the results at a conference later this year. The company plans on applying for regulatory approval to add cardiovascular benefits to the prescription label of Wegovy. While the results seem promising, whether or not insurers should be responsible for carrying the cost of this new class of weight loss drug is up for debate.

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The country needs affordable care to combat obesity

The lawmakers behind the Treat and Reduce Obesity Act (TROA) have argued since 2012 that the U.S. is facing an obesity epidemic that makes reversing the Medicare ban crucial. The government "must do more to combat this epidemic head on," Sen. Tom Carper (D-Del.) said in a statement to The Hill. Carper has been pushing the bill since it was first introduced. "Too many of those in need are being denied care because of the high cost of medications or inaccessible treatment options," he added. The U.S. cannot "stand idly by while this disease continues to claim lives through related illnesses that are preventable and treatable."

Obesity is a chronic illness that many older Americans must manage, so "it's very relevant for the Medicare population," Tracy Zvenyach, director of policy strategy and alliances at the OAC, told The Hill. Diabetes is as severe as other chronic diseases and "needs to be thought of and treated similarly." Zvenyach also noted that reversing the Medicare ban would be "relevant to all Americans" because when federal insurers make significant policy changes, "it can have an effect across all coverages," as other insurers would likely follow suit.

It might not be enough to convince insurers to foot the bill

The recent study data could be "perversely good news for the Wegovy-curious," Megan McArdle conceded in The Washington Post. It might be harder for insurers to refuse to cover a drug that could significantly lower the risk of cardiovascular issues. "But then," McArdle added, "that's bad news for employers and taxpayers." It would cost a lot of money to cover everyone who could benefit from the drug. CDC data shows that over 40 percent of Americans are obese. Even if everyone that could benefit doesn't seek a prescription, "the numbers are potentially daunting." The potential for loss makes it seem "unlikely that American taxpayers or employers will willingly buy a $12,000-a-year drug."

The persuasive power of the promising data is "not as straightforward as it may appear at first glance," Joshua Cohen wrote for Forbes. Insurers still have to wait for the study to be presented formally in a peer-reviewed journal or a conference. Without more detailed information about the trial data, "payers probably won't change their current restrictive formulary policies." Insurers need to see data that includes "a stratification of sub-populations, for example, into BMI ranges, a clearer picture of the adverse event profiles, and timing of the effects." The data might look good, but "this may not necessarily change payer coverage policies with respect to weight loss agents," Cohen concluded, "at least not in the short term." Payers will have to "assess a multitude of factors prior to making their decision."