Rising Costs Lead Insurers to Drop Weight Loss Drug Coverage, Further Increasing Patient Burden

Am J Manag Care. 2024;30(Spec No. 10):SP781-SP782. https://doi.org/10.37765/ajmc.2024.89614

What do you do when your insurer suddenly stops covering the drug you’ve been using every week for over a year to support your weight loss? Unfortunately, this is a question that many patients now have to find an answer to.

In a move that could cause a ripple across insurers, Blue Cross Blue Shield (BCBS) of Michigan announced it will drop coverage of 3 major weight loss drugs: semaglutide (Wegovy), tirzepatide (Zepbound), and liraglutide (Saxenda).¹ This dropped coverage for popular glucagon-like peptide 1 (GLP-1) receptor agonists is set to start January 2025, sparking a debate over the balance between cost, efficacy, and patient care.

Effective January 1, 2025, coverage for these drugs will end for fully insured large group commercial members, with coverage ending on the renewal date for plans renewing after January 1. As of August 1, 2024, new prior authorization criteria for GLP-1 weight loss drugs began to be enforced, requiring some members to obtain a new prescription. These criteria are:

• Members must be 18 years or older with a body mass index (BMI) of at least 35
• Prescriptions must come from a provider who has seen the member in person
• Prescribers must document current and baseline weight within 30 days
• Members must show 6 months of documented lifestyle modification activities
• Members must participate in a Teladoc Health program and provide a summary report

BCBS Michigan announced it will stop covering key weight loss medications starting January 2025 | Image credit: K KStock – stock.adobe.com

BCBS Michigan is the largest nonprofit health insurer in the state, with 4.5 million covered members either living in or employed by companies based in Michigan. This decision will reportedly affect nearly 10,000 members on the GLP-1 medications.² For uninsured patients, medications like semaglutide can cost up to $1350 a month. The decision was made by BCBS Michigan more than 2 years into the semaglutide shortage, which was first reported in the US in March 2022.³ Wegovy was approved for weight loss only 9 months before the shortage hit.⁴

So, what exactly triggered this decision?

According to Bloomberg, a spokesperson from the Michigan insurer “cited consideration of the drugs’ effectiveness, safety and cost in reaching this decision, but did not respond to a question about what the safety concerns were.”²

According to the BCBS Michigan provider alert itself, the decision was based on a number of factors, including research indicating weight loss success is significantly higher when medication is used in combination with lifestyle changes such as diet and exercise rather than on its own.¹ Additional BCBS data showed that most patients do not stay on these medications long enough to benefit, with more than 30% of patients discontinuing treatment within the first 4 weeks, before the 12-week minimum and before they reached the targeted dose.⁵ Since the drugs also come with high cost and supply issues, BCBS Michigan aims to “ensure they are used for the most appropriate patients who can achieve clinical benefit.”¹

“This is why we’re requiring that members on Saxenda, Wegovy or Zepbound participate in the weight management program through Teladoc Health,” the BCBS Michigan provider alert stated.

In an interview with The American Journal of Managed Care^® (AJMC^®), Ian Neeland, MD, called the news “disappointing,” “counterproductive,” and “moving in the opposite direction” of what CMS stands for in terms of secondary prevention of cardiovascular disease for patients with overweight or obesity.

Neeland serves as director of cardiovascular prevention and co-director of the Center for Integrated and Novel Approaches in Vascular-Metabolic Disease at University Hospitals Harrington Heart & Vascular Institute, and associate professor of medicine at Case Western Reserve University School of Medicine. He previously spoke with AJMC about the significant rise in interest in semaglutide for weight loss in 2023, receiving many referrals at his practice due to the link between cardiovascular health and weight.⁶ While he often prescribes GLP-1 receptor agonists to manage obesity, he also faces challenges when insurance doesn’t cover the medication, forcing patients to pay out of pocket. While some patients can afford it, many cannot, making it difficult to provide effective treatments.

BCBS Michigan is not the first insurer to drop coverage of GLP-1 drugs for weight loss. In January 2024, North Carolina’s State Health Plan—covering almost half a million members—announced it was dropping coverage of these drugs for state employees due to high costs and unsuccessful price negotiations with drugmakers, with the decision taking effect in April.⁷ The State Health Plan spent $100 million on GLP-1s for weight loss in 2023 and faced a projected $1.5 billion loss by 2030. Attempts to halt new patient coverage led to Novo Nordisk withdrawing rebates, increasing prescription costs by $54 million for existing patients. According to Bloomberg, this decision reflects a broader struggle among states and insurers to manage soaring costs in the growing anti-obesity drug market.

To add to the list, RWJBarnabas Health also ceased coverage in February due to issues with sustained adherence, and Ascension ended coverage for its 139,000 employees in July, citing safety and cost concerns.⁸ Additionally, Hennepin Healthcare stopped coverage for Wegovy and similar injectable drugs, pointing to both high costs and adherence issues. Meanwhile, Fairview Health Services began limiting coverage of Wegovy and Saxenda to employees with a BMI of 40 or higher, anticipating a $10 million annual cost without this policy.

HealthPartners will also limit employee coverage for weight loss medications but has not detailed the restrictions, and Mayo Clinic has imposed a $20,000 lifetime limit on weight loss medication coverage through its employee health plan, excluding GLP-1s for diabetes.

Why Are Patients Discontinuing So Early?

In an interview with a 63-year-old patient from New Jersey who opted to remain anonymous, she said it took her 6 months of uptitration to finally get to a dose that led to results. It was the 2.4 mg injection—the highest available dose of Wegovy.

“I’m just now starting to see a difference in myself and my appetite and cravings now that I’m at the highest dose,” she told AJMC.

Her specific journey looked like this: she first had a conversation with her cardiologist about wanting to try semaglutide for weight loss, and she qualified based on her BMI, which she did not disclose in the interview. Her primary care physician (PCP) showed clear support, prescribing her the first dose, but during her initial 3-month uptitration course, the patient saw no improvements in weight or appetite and was only feeling the adverse effects of the drug. After taking a 3-month break, they started the uptitration cycle again on brand name Wegovy, and she has been on it for 6 months now.

A year into her overall experience with the GLP-1 therapy was when someone finally told her how to supplement the GLP-1 therapy with diet and exercise that was realistic to her and her lifestyle, and it wasn’t her PCP—it was a bariatric doctor who she just started seeing a month prior. The patient claims that diet and exercise were never a real conversation with her PCP, but she feels more optimistic now that she has a bariatric doctor and nutritionist checking in with her.

“Sure, I could’ve taken more initiative in asking [my PCP] more questions about diet, but it’s her job to tell me everything I need to know about taking this drug,” she said.

The patient added that she is “not too shocked” so many patients stopped taking injections so early, especially due to how popular media presents it as a “miracle drug,” but understands why insurers and providers would be frustrated with the high costs and low adherence. However, she expressed disappointment that this led to dropped coverage instead of more efforts toward patient education and encouragement to continue, which she feels was lacking during her journey with her PCP.

“It’s frustrating to see all these celebrities look they just took a couple injections and had the weight just fall off of them,” she added. “But I guess the part you don’t see is all the private chefs, personal trainers, private doctors, money, all that stuff that’s actually going on behind the scenes that makes it look like they just shed 100 pounds overnight. So, I’m not too shocked that a lot of patients dropped the injections so early when the media makes it look that easy when it’s actually not. It took me a year for someone to finally give me, a normal person, the right instructions. I’m sure Oprah got them a lot faster.”

How Does Lack of Adherence Affect Cost?

AJMC also talked to a former health plan medical director who opted to remain anonymous. When asked whether the claims around safety and efficacy data were enough for BCBS Michigan to drop coverage of GLP-1s for weight loss, they said their bigger question was around why they covered it in the first place and decided now to drop it.

“It's easier to keep a camel out of the tent than get a camel in the tent out,” they said. “Once Blue Cross Blue Shield of Michigan decided to let weight loss drugs into the tent, getting them out is going to be very hard. Their decision to eliminate coverage based on safety and efficacy is fascinating, because I don't know that there's any new safety or efficacy data that's happened in the interim that would warrant that decision. Assumedly, they looked at the safety and efficacy before they decided to let Wegovy into the tent, and now that they want to get it out of the tent—what's their justification?”

However, the former health plan medical director agreed with the anonymous patient that costs and lack of patient adherence are understandable factors in the decision. An analysis by Prime Therapeutics and Magellan Rx found that 68% of patients who started GLP-1 weight loss drugs were no longer using them after a year.⁹ The study also revealed significantly higher health care costs for those who continued taking the drugs, averaging $13,218 more per person compared with matched controls. For the GLP-1 agonist–adherent subgroup, average annual costs per member rose from $13,048 before treatment to $25,850 after treatment, reflecting a 98% increase. Meanwhile, matched control members saw a $416 (3%) decrease in costs from $11,955 pre-treatment to $11,539 post-treatment.

The analysis also demonstrated varying GLP-1 weight loss treatment rates by region and insurance coverage. Based on past usage and expenditure, a 1% rise in GLP-1 weight loss utilization among an insured population would result in an additional $14.50 per member per month cost for most self-insured employers, which would be over a 5% increase in their total drug spend budget.

“With 40% of people being overweight, by the time you get to 5% of your employees taking these drugs, it can dramatically increase your cost,” the former medical director noted.

They also cited the STEP 1 trial extension, which showed that that stopping GLP-1 use led to rapid weight regain and loss of benefits, such as blood pressure control.¹⁰ For health plans, this means that the cost of these drugs often results in minimal benefit, as many patients do not persist with the therapy, making the cost per effective treatment much higher. To maximize benefits and minimize costs for weight loss medications, it is crucial to identify patients most likely to benefit and persist with the therapy. Prior authorization processes often focus on patient compliance and weight loss, with many plans requiring at least a 5% reduction in excess body weight for continuation. With the updated BCBS Michigan criteria for covering weight loss drugs, the approach may help grant GLP-1 access for the patients who need it most.

“There always is a balance and a tradeoff between coverage and costs and cost effectiveness,” Neeland added, also understanding of cost as a factor for the dropped coverage. “Often cost effectiveness is seen several years down the road when outcomes are prevented, but upfront costs may be greater than the return on investment that they see in the very short term, so maybe that was what drove their decision-making.”

It’s also important to note that GLP-1 discontinuation often stems from supply issues rather than side effects in real-world settings. Neeland told AJMC that recent shortages have made it difficult for patients to obtain higher doses at his practice, leading to increased discontinuation rates. These supply-related problems may be the main reason for discontinuation for many patients rather than intolerance or ineffectiveness, warranting a closer eye at supply issues when assessing why patients stop taking these medications.

Will the List of Insurers Dropping Weight Loss Drugs Keep Growing?

Dropping coverage for weight loss drugs could lead to broader implications. According to the anonymous former health plan medical director, if private insurers or other BCBS entities follow suit, it may trigger state mandates or federal directives to ensure coverage.

“If we as a society think obesity is a problem that warrants addressing with drug coverage, then we need to ask the question, how do we do that equitably?” the medical director said. “How do we make sure that patients who have private insurance [or] public insurance—whether it be VA [Veterans Affairs], Medicare, Medicaid—have access to these therapies? Because saying that Blue Cross Blue Shield should cover these, but Medicare shouldn't or doesn't have to, or Medicaid doesn't have to, is not an equitable solution.”

To address these challenges, they pointed out that there are 2 crucial considerations: whether Americans are willing to pay higher taxes for equitable access and whether health plans are prepared to implement cost controls similar to those in other countries. The disparity in drug prices—Wegovy costs $1350 per month in the US compared to $190 to $330 per month in Germany—illustrates the difficulty in managing cost and access. If Medicare covers these drugs, they will be subject to price negotiations under the Inflation Reduction Act, affecting around 27% of Medicare beneficiaries. This complex issue of affordability and coverage is further highlighted by broader budgetary concerns.

Earlier this year, Sen Bernie Sanders (I, Vermont), chair of the Senate Committee on Health, Education, Labor, and Pensions (HELP) highlighted budgetary concerns about the high costs of GLP-1 drugs for diabetes and obesity, warning they could "bankrupt our entire health care system."¹¹ According to a HELP analysis, if half of American adults with obesity starting using these drugs, total spending could exceed $411 billion annually, surpassing total 2022 retail prescription drug spending, and Medicare and Medicaid could face costs of $166 billion each year for these medications. This could lead to unsustainable financial pressure on both private and public health care sectors.

Neeland added that, if CMS decides to cover these medications for eligible individuals, it could help mitigate some of the financial issues and make a positive impact on access and affordability and the balance of the 2.

“If Medicare patients can get these medications and demonstrate long-term value and return on that investment for reducing outcomes, then I think these commercial insurances will have to rethink their cost effectiveness evaluation, and maybe then things will change,” he said.

So, what should patients do in the meantime if their insurer is dropping coverage of weight loss drugs? According to Neeland, they should:

• Continue their current medication regimen while still covered and aim to maximize adherence
• Consult with their physician to develop a backup plan, which might include switching insurance providers or exploring other coverage options
• Consider Medicare coverage if they are 65 or older, as it may cover these drugs for patients with certain conditions like cardiovascular disease, overweight, or obesity
• Avoid using third-party compounding pharmacies if they can, due to potential risks and insufficient regulation
• Consider paying out of pocket for medications from licensed manufacturers if this is a feasible options, though for most patients, finding alternative coverage is essential as paying out-of-pocket may be too costly

References

1. Update: changes coming for select weight loss drugs for some commercial members. Provider alert. Blue Cross commercial and BCN commercial. Updated July 30, 2024. Accessed August 4, 2024. https://providerinfo.bcbsm.com/documents/alerts/2024/202406/alert-20240606-changes-weight-loss-drugs-commercial.pdf
2. Swetlitz I, Muller M, Smith G. Michigan’s largest insurer to drop weight-loss drug coverage. Bloomberg. June 12, 2024. Accessed August 4, 2024. https://www.bloomberg.com/news/articles/2024-06-12/michigan-s-largest-insurer-to-drop-weight-loss-drug-coverage
3. Allen A. Why millions are trying FDA-authorized alternatives to big pharma’s weight loss drugs. KFF Health News. July 23, 2024. August 4, 2024. https://kffhealthnews.org/news/article/glp1-compounding-pharmacies-wegovy-zepbound-copycat-drugs-shortages/
4. FDA approves new drug treatment for chronic weight management, first since 2014. News release. FDA. June 4, 2021. Accessed August 4, 2024. https://www.fda.gov/news-events/press-announcements/fda-approves-new-drug-treatment-chronic-weight-management-first-2014
5. Real-world trends in GLP-1 treatment persistence and prescribing for weight management. Issue brief. Blue Health Intelligence. May 2024. Accessed August 4, 2024. https://www.bcbs.com/sites/default/files/BHI_Issue_Brief_GLP1_Trends.pdf
6. Klein HE. An ongoing crisis: semaglutide shortage raises dual concerns for obesity and diabetes treatment. AJMC. December 21, 2023. Accessed August 4, 2024. https://www.ajmc.com/view/an-ongoing-crisis-semaglutide-shortage-raises-dual-concerns-for-obesity-and-diabetes-treatment
7. Foxman S, Muller M. North Carolina drops coverage of costly weight-loss drugs. Bloomberg. January 27, 2024. Accessed August 4, 2024. https://www.bloomberg.com/news/articles/2024-01-27/north-carolina-drops-coverage-of-weight-loss-drugs-as-costs-soar
8. Emerson J. 6 health systems limiting weight loss drug coverage for employees. Becker’s Hospital Review. Updated March 13, 2024. Accessed August 4, 2024. https://www.beckershospitalreview.com/glp-1s/6-health-systems-limiting-weight-loss-drug-coverage-for-employees.html
9. Leach J, Chodroff M, Qiu Y, et al. Real-world analysis of glucagon-like peptide-1 agonist (GLP-1a) obesity treatment one year cost-effectiveness and therapy adherence. July 11, 2023. https://www.primetherapeutics.com/wp-content/uploads/2023/07/GLP-1a-obesity-treatment-1st-year-cost-effectiveness-study-abstract-FINAL-7-11.pdf
10. Wilding JPH, Batterham RL, Davies M, et al. Weight regain and cardiometabolic effects after withdrawal of semaglutide: The STEP 1 trial extension. Diabetes Obes Metab. 2022;24(8):1553-1564. doi:10.1111/dom.14725
11. Becker Z. In Novo pricing probe, Sanders cranks up the heat with dire warning on projected GLP-1 spending. Fierce Pharma. May 16, 2024. Accessed August 4, 2024. https://www.fiercepharma.com/pharma/sanders-claims-novo-nordisks-wegovy-ozempic-pricing-could-bankrupt-us-healthcare-system-new