Wegovy's approval for heart health does not yet mean widespread insurance coverage

In the United States, Wegovy is no longer just for weight loss.

This blockbuster drug — one of the few weight loss treatments that has skyrocketed in popularity over the past year — is now approved in the United States for heart health as well. But this may not translate into broader insurance coverage for the weekly injection drug Novo Nordisk And similar obesity treatments so far.

Some employers and other health plans are still hesitant to cover Wegovy because of its hefty $1,350 monthly price, which they say could significantly strain their budgets. They also have other questions, such as how long patients will actually remain on treatment.

At the very least, some plans will notice Wegovy's new approval and start evaluating whether to cover the treatment when they next update their formulas, some insurance industry experts told CNBC. That could mean tough decisions for insurers, and potentially a patchwork coverage system for Americans seeking treatment to navigate.

“The more benefits that come from weight-loss drugs, I think the greater the pressure to start getting those drugs on the formulary and covering them in standard insurance plans,” said John Crable, senior vice president of Corporate Synergies. National insurance, employee benefits, mediation and consulting. “But my gut tells me it's going to take more to convince some insurers.”

Wegovy is part of a class of drugs called GLP-1s, which mimic a hormone produced in the intestines to suppress a person's appetite and help regulate blood sugar. Coverage of these treatments when used for weight loss is a mixed bag.

A Novo Nordisk spokesperson said in a statement that approximately 110 million American adults suffer from obesity, and about 50 million of them have insurance coverage for weight-loss medications. The spokesperson added that the company is actively working with private insurers and employers to encourage broader coverage of these drugs, and is advocating for the federal Medicare program to begin covering them.

The Centers for Medicare and Medicaid Services is reviewing the expanded FDA approval of Wegovy and will share additional information as appropriate, an agency spokesperson said in an email.

The spokesperson added that state Medicaid programs will be required to cover Wegovy for its new cardiovascular use. By law, Medicaid must cover almost all FDA-approved drugs, but weight loss treatments are among a small group of drugs that can be excluded from coverage. About one in five state Medicaid programs currently cover GLP-1 weight loss medications.

Some of the largest insurance companies in the country, e.g CVS Health Aetna, cover those treatments.

But many employers don't do that. An October survey of more than 200 companies conducted by the International Foundation for Employee Benefit Plans, or IFEBP, found that only 27% offered coverage for GLP-1s for weight loss, compared with 76% that covered those drugs for diabetes. It is worth noting that 13% of employers indicated that they are considering covering weight loss costs.

The Food and Drug Administration approved Wegovy for weight management in 2021. In a landmark decision earlier this month, the agency expanded this approval after Wegovy was shown to reduce the risk of serious cardiovascular complications in adults with obesity and heart disease.

The decision was based on a five-year late-stage trial, which showed that weekly injections of Wegovy reduced the overall risk of heart attacks, strokes and cardiovascular death by 20%.

The approval demonstrates the significant health benefits of Wegovy — and potentially similar drugs — in severe cases caused by excess weight. Obesity increases the risk of many conditions, such as diabetes, heart disease, and even some types of cancer.

It also challenges what some health experts call an “outdated” narrative that is raising hesitation among some insurers: that weight-loss treatments provide only a cosmetic benefit, not a medical one.

“We have never seen an anti-obesity drug reduce the risk of heart attacks and strokes,” said Dr. Jaime Almando, a specialist in weight management and metabolism at the University of Texas Southwestern Medical Center in Dallas. “What we have is evidence that treating obesity is essentially life-saving, and I think it really changes the conversation.”

The lack of broader insurance coverage for these drugs creates “a huge equity problem in our country around access to treatment and even access to health,” said Dr. Angela Fitch, the country's chief medical officer.

Some health experts also argue that coverage of Wegovy and other GLP-1s for weight loss could reduce a plan's health care costs and improve future health outcomes for patients.

Employers will be “well-willing to cover” those drugs if they are effective in lowering costs over the long term, said Sean Grimminger, president and CEO of the National Alliance of Healthcare Purchasers Alliances. Members of this group represent private, public, nonprofit, union, and Taft-Hartley organizations that spend more than $400 billion annually on health care.

But he said it will likely be years before employers have access to specific data on the potential cost savings of covering those treatments.

Greminger added that employers are “a little less focused” on what coverage of weight-loss drugs will mean for overall health care spending 10 years from now. Their focus is on providing care for their current employees, some of whom will end up leaving the company in the future.

Employers have other questions as well, including long-term data about GLP-1s for weight loss, and about patients who stop taking these drugs prematurely. It's also not clear to some employers whether patients have to stay on Wegovy for the rest of their lives or whether they can eventually get off of it, Grimminger said.

Obesity and heart disease are chronic diseases, which means most patients will have to continue taking Wegovy with diet and exercise to maintain health benefits. “Not unexpectedly,” Novo Nordisk said, data from their clinical trials show that people who took Wijovi regained their weight when they stopped the drug.

“This supports the belief that obesity is a chronic disease that requires long-term management, like high blood pressure or high cholesterol, with most patients remaining on treatment long-term in order to continue to experience the benefits of their medications,” Novo said. Nordisk said in a statement.

But the standard of care when using weight-loss drugs long-term is “in a constant state of flux,” Greminger said.

Faced with the high cost of covering costs for Wegovy and similar drugs, North Carolina has begun to cut back.

State employees will no longer have insurance coverage for GLP-1s when used for weight loss early next month. The plan will still cover GLP-1 diabetes drugs, such as Novo Nordisk's Ozempic, along with some older obesity drugs.

North Carolina state treasurer and GOP gubernatorial candidate Dale Folwell told CNBC that Wegovy's expanded approval last week changes nothing.

“We never questioned the effectiveness of the drug,” Folwell said. “We always wondered what we would have to pay for it.” “Even as the use of this drug expands, it does not change the cost.”

He said dropping coverage for weight-loss drugs was not a decision the plan's board of trustees wanted to make in January, but it did so because the plan is “under financial siege” because of Wegovy. Such treatment cost the state health plan nearly $87 million last year, according to a state presentation in January. Overall, GLP-1 weight-loss drugs cost the plan about $102 million in 2023.

An outside consultant predicted a loss of $1.5 billion by 2030 if the state plan continues to pay for those treatments. North Carolina also estimated that continuing to cover GLP-1s for weight loss would double premiums for all 482,000 active employees and dependents participating in the plan, even those who are not taking medications.

Folwell said the state is working with Novo Nordisk and… ellie lily, Manufacturer of a similar treatment, Zepbound, to reach an agreement on costs. But he noted that companies have rejected the state's recommendations “at every turn.”

An Eli Lilly spokesperson said the company is committed to working with healthcare, government and industry partners “to help people who might benefit from Zepbound access it, but obstacles remain to that goal.” The spokesman added that policies related to insurance “have not kept pace with the science.”

Novo Nordisk said in a statement that it is urging Folwell and the state health plan to “put patients first” and reconsider the decision to drop coverage for weight-loss drugs.

Novo Nordisk believes that “denying patients insurance coverage for important and effective FDA-approved treatments for obesity is irresponsible,” according to a company spokesperson, who said the company will continue to engage with state health plan officials to address any potential cost concerns.

Both drugmakers have launched programs to help patients, with or without commercial insurance coverage, afford weight-loss treatments.

Novo Nordisk says its savings program can help patients without insurance coverage save up to $500 per 28-day supply of Wegovy. The company also said that nearly 80% of Wegovy patients in the United States with commercial coverage for the drug pay $25 per month or less.

Increased competition in the weight-loss drug market may force the two companies to reduce the costs of their injectable treatments, said Sissy Connolly, CEO of the Alliance for Community Health Plans. The organization represents regional, community-based health plans covering more than 18 million Americans across the United States

Health plans may also be more open to covering convenient, cheaper oral versions of the drugs, which many drugmakers are racing to develop. However, these cheaper options are likely still years away. This includes cheaper generic versions of existing GLP-1s, along with treatments from competing drug companies.

More employers are likely to start considering Wegovy coverage after its expanded approval, according to Julie Stitch, vice president of content at IFEBP.

But plans that decide to include Wegovy when they next update their formularies will likely consider implementing certain requirements to control costs. These requirements will look different for approved Wegovy uses.

Most employers who cover GLP-1s for weight loss already use cost controls, according to an October survey by IFEBP.

Nearly a third of the companies said they used “step therapy,” which requires their members to try other, less expensive medications or weight loss methods before using GLP-1. About 16% of employers used certain eligibility rules, such as requiring employees to have a certain body mass index, or BMI, to obtain coverage.

Other employers use financial requirements, such as annual or lifetime spending limits for treatments. For example, Mayo Clinic's Employee Health Plan added a lifetime coverage limit of $20,000 for weight-loss drug prescriptions filled after January 1.

Meanwhile, some insurance industry players are trying to find ways to help health plans manage the costs of covering treatments.

last week, CignaThe company's pharmacy benefits management unit said it will limit spending increases for GLP-1s to a maximum of 15% per year for employers and other health plans. Currently, some of the company's clients are seeing spending on these treatments rise by 40% to 50% annually.

If more insurers and pharmacy benefit managers make similar efforts, their health plans could become more open to covering weight-loss drugs “knowing that their risks will be limited that way,” Stich said.

Clarification: This story has been updated to clarify the price of Wegovy. Its price is $1,350 per month.