ICER found GLP-1 drugs to be cost-effective for the treatment of obesity. If that’s the case, why don’t more US payers cover GLP-1 drugs? Obviously, one reason for this is cost given the huge number of obese patients in the US; Specifically, >40% of American adults are obese. However, a bigger issue may be adverse selection.
Consider the case of the Better Approaches to Lifestyle and Nutrition for Comprehensive Health (BALANCE) model, a voluntary model offered by the Centers for Medicare and Medicaid Services (CMS) that would have provided drug coverage for GLP-1 drugs for obesity in Medicare and Medicaid. In exchange for this generous coverage, drug manufacturers will lower their prices. Kenneth Thorpe and Kirsten Axelsen recently wrote Health matters at the forefront Within the article’s balance model:
The manufacturers of FDA-approved GLP-1s at BALANCE, Eli Lilly and Novo Nordisk, will have CMS reduce the net price of GLP-1 therapy to $245 per month for all presentations, including obesity. However, an insufficient number of prescription drug plans agreed to participate.
However, its voluntary nature was problematic due to adverse selection:
from this result [few Part D plans participating in BALANCE]One thing is clear: Voluntary coverage for obesity drugs, even at government-set drug prices, doesn’t work…
Lowering drug prices did not solve the systemic problem. Plans participating in the pilot will attract obese beneficiaries whose medical costs are twice as high as those without obesity, resulting in higher premiums that could scare off healthy enrollees. It is unclear how much premiums will change with GLP-1 coverage for obesity, as drug plans are discounting GLP-1 for other uses and indications before the balance.
The Thorpe and Axelsen article argues that CMS should lift restrictions on obesity drug coverage; The entire article is interesting. You can also find more information about the BALANCE and GLP-1 bridge programs on the KFF website.
