ICER found GLP-1 drugs to be cost effective for treating obesity. If that is the case, why don’t more US payers cover the GLP-1 drugs? Clearly, one reason is the cost given the sheer volume of patients i nthe US that are obese; specifically, >40% of US 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 introduced 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 would drop their prices. Kenneth Thorpe and Kirsten Axelsen write in a recent Health Affairs Forefront article that within the BALANCE model:
Manufacturers of the FDA approved GLP-1s in BALANCE, Eli Lilly and Novo Nordisk, would have dropped GLP-1 treatment net prices to CMS to $245 per month for all presentations, including obesity. However, an insufficient number of prescription drug plans agreed to participate.
However, it’s voluntary nature was problematic, due to adverse selection:
From this outcome [few Part D plans participating in BALANCE], one thing is clear: Voluntary coverage for obesity drugs, even at government-set drug prices, does not work…
Dropping drug prices didn’t solve the systemic problem. Plans that would have joined the pilot would attract beneficiaries with obesity whose medical costs are twice as high as those without obesity, leading to higher premiums that could scare off healthier enrollees. It is unclear how much premiums would change with GLP-1 coverage for obesity, as drug plans are getting discounts on GLP-1s for other uses and indications prior to BALANCE.
The Thorpe and Axelsen article argues that CMS should remove restrictions on coverage of obesity medications; the articl is interesting throughout. You can find more information on the BALANCE and GLP-1 Bridge programs on the KFF website as well.
