If newer brand-name antiobesity medications were covered by Medicare, they could cost the program between $13.6 to $26.8 billion even with only 10% of people with obesity using them, according to a new analysis published in the New England Journal of Medicine by Vanderbilt University Medical Center researchers in the Department of Health Policy.
The perspective piece led by Khrysta Baig, MSPH, a doctoral student in the Department of Health Policy highlights Medicare’s long-standing prohibition on weight-loss medication coverage, the growing push to expand Medicare coverage for these new drugs, and the financial and health implications for doing so.
The authors estimate a range of possible new costs to Medicare’s Part D program for both older and newer weight-loss drugs. On the lowest end, they estimate new spending could be $67 million if only 1% of beneficiaries with an obesity diagnosis used the generic drug regimen phentermine and topiramate. On the higher end, using the Centers for Disease Control and Prevention’s estimate of obesity in Americans 60 and older, which is roughly 42% of that population or 20 million people, the cost to Medicare Part D would be $26.8 billion if only 10% of those beneficiaries used the branded drug semaglutide (Wegovy).
“Depending on the types of medications used by beneficiaries and their rate of use, it’s likely that Part D premiums would increase to accommodate spending on these products,” the study said.
“Despite newer antiobesity medications being truly exciting innovations, prior analyses in the US have found that semaglutide – priced at $13,618 per year in the US – is not cost-effective when compared to lifestyle modification and older generics. The same can be true for cost-effectiveness in other countries, even where the price of the drug is much lower,” said co-author and Assistant Professor of Health Policy Ashley Leech, PhD.
If 100% of Medicare beneficiaries with obesity used semaglutide, it would cost Medicare and its beneficiaries an estimated $268 billion; nearly double the current annual Part D net spending.
“It’s a purely hypothetical scenario, but it underscores that at current prices, these medications cannot be the only way – or even the main way – we address obesity as a society,” Baig said.
The authors also draw attention to large gaps in what is known about the safety and effectiveness of these medications when taken by older adults. There may be fewer benefits – as higher weight in older adults may not have the same health risks we think of in younger populations – and the side effects may be more detrimental. Which Medicare beneficiaries would be most likely to benefit from these medications is currently unclear since older adults were not well represented in the clinical trials, the authors said.
Regardless of unknowns, Medicare Part D may soon be compelled to cover antiobesity medications if the Treat and Reduce Obesity Act (TROA) is passed by Congress – which has become more likely in recent years. “Given the uncertainty regarding the benefits of these drugs for older adults and the high cost associated with their use, policymakers need to carefully consider tradeoffs of expanding Medicare coverage of these products,” co-author and Ingram Professor of Health Policy Stacie Dusetzina, PhD, said.
The team of investigators also included David D. Kim, PhD, Assistant Professor of Medicine at the University of Chicago.