Blog | 2/8/2024

The Market Access Landscape for Obesity Drugs

By Alexis Froistad, Health Advances; Rita Sá Ferreira, Health Advances; Sheela Hegde, Health Advances; and Brian Duda, Parexel

Since Ozempic’s launch in 2017 and Wegovy’s approval in non-diabetic obesity, obese and overweight patients have been eager to get on GLP-1 therapy. However, fewer than 10% of medically qualified patients can access a GLP-1 through their insurance plans [1].

Payers are hesitant to cover GLP-1 therapy for obesity. There are almost 180 million non-diabetic obese or overweight patients in the United States [2], just under half of whom seek pharmacological treatment to help with weight loss [3]. At Wegovy’s list price of ~$15,000 per patient per year, the economic exposure to payers is staggering [4]. Few private payers cover GLP-1s, and even those that do implement strict step edits and other restrictions, and/or use optional riders sponsored by employers [5]. CMS is prohibited from covering weight loss therapies by the Medicare Prescription Drug, Improvement, and Modernization Act [6]. Most GLP-1 obesity patients are actually obtaining medication by self-pay, but those who cannot afford to pay out of pocket are left without any options.

How can GLP-1 manufacturers enable greater access to GLP-1 therapy? Several factors, discussed here, will shape the obesity market access landscape in the next few years.

Outcomes Data

Outcomes data is an important step toward convincing payers that covering weight loss therapy prevents significant downstream medical costs (hospitalizations, ER visits, etc.). Wegovy had a pivotal trial readout in August 2023 demonstrating reduced cardiovascular events (as measured by MACE, a compiled cardiovascular event endpoint) by 20% compared to placebo [7,8]. The following ongoing outcomes studies, if successful, will further bolster the health economic argument for payers.

Lower Prices

Novo is already discounting Wegovy by almost 50%, according to some US payers [12]. The following factors are likely to further reduce the cost of obesity drugs in the coming years:

Increased competition among obesity therapies is likely to drive down GLP-1 pricing. There are many drugs in development for obesity treatment, including oral GLP-1s, dual mechanism GLP-1s, and triple mechanism GLP-1s.

Zepbound was approved on November 8, 2023 and launched with a list price that is 20% lower than Wegovy’s. Zepbound also demonstrated higher weight loss than Wegovy (18% compared to 12%) [13].
The Inflation Reduction Act is expected to lower the cost of semaglutide (Ozempic and Wegovy) by 25% starting in 2027 [14]. Competing GLP-1 therapies will likely follow to remain competitive.
The Treat and Reduce Obesity Act (TROA) is a bipartisan bill (initially introduced in 2013, reintroduced in July 2023) to expand Medicare coverage to include screening and treatment of obesity, which has historically been prohibited by the Medicare Modernization Act mentioned above. TROA has support from ICER and several obesity advocacy organizations, but drug cost is a significant barrier to passage [15,16]. Drug companies may decide to lower prices to help the case to pass TROA.
There is precedent for manufacturers to reduce list prices in the face of payer resistance to coverage. Sanofi and Regeneron cut the price of Praluent (PCSK-9 cholesterol drug) by 60% in 2018 after ICER stated that a 60% price reduction was necessary to be cost effective. Amgen followed with a 60% price reduction of Repatha [17]. As mentioned previously, the recently launched GLP-1 Zepbound was listed at a 20% reduction compared to Wegovy’s list price.

Strongly Managed Utilization

Private payers may carefully open up access to GLP-1s in obese and overweight patients through restrictions, such as the following:

Limiting access to comorbid conditions with discrete approvals (e.g., NASH). These approvals would be driven by pivotal trials with primary endpoints beyond body weight reduction (e.g., in NASH, fibrosis improvement).
Limiting access to the sickest obese patients. For example, if the full data set from Wegovy’s cardiovascular outcomes trial reveals that patients with BMI>35 and history of heart events had the highest MACE reduction, payers may only cover this specific population.
Prior authorization protocols, step edits, quantity limits, and indication restrictions. Experts predict that if the TROA is passed, Medicare Part D will implement several utilization management tools to reduce financial exposure.

The Access Landscape in Europe

There are ~76M non-diabetic obese or overweight patients in EU4+UK countries [28]. Payer coverage for Wegovy and Saxenda is even more limited than in the US, as summarized in the table below.

In the UK, prescription is limited to a handful of Tier 3 obesity clinics. Both Saxenda and Wegovy are covered by the NHS for patients that fulfill certain criteria of BMI and/or weight-related comorbidity. Private insurance companies in the UK currently do not cover the costs for these drugs [25,26].
In France, Wegovy was previously reimbursed through an early access scheme for adult patients with an initial BMI ≥ 40 and in the presence of at least one weight-related comorbidity factor. The early access authorization was withdrawn in September 2023. The HAS assessment of Wegovy in December 2022 resulted in a low ASMR score, with no clinical added value found. This decision and rating will be reassessed in the next two years, as they were conditional on the release of the results from the SELECT Phase III trial, which just had a readout of 20% decrease in cardiovascular events in August 2023 [24].
In Germany, the reimbursement of weight loss drugs by the public system, which covers ~90% of the population, is forbidden by law. Private insurance companies also do not cover Wegovy today. However, one sign of possible future coverage comes from a statement by one of the biggest private insurance companies in Germany, Allianz, which stated that it will consider reimbursement in the future if a person is diagnosed with a “medical need” (the definition of which is unclear) [22,23].
Finally, in other European markets where obesity drugs are marketed (Denmark, Norway, Spain, and Italy), reimbursement by the public insurance system is not provided. The private system is also moving slowly. Although private insurers in Denmark have historically reimbursed Wegovy, they will stop in January 2024 due to high demand [22,23].

Future Drivers of Access in Europe

The aforementioned influences on the US payer landscape are also likely to impact market access in Europe. Outcomes data will help trigger and inform new health economic evaluations of these drugs. The data will also support the case for reviewing obesity as a chronic medical condition and not necessarily as a lifestyle condition.

Furthermore, continued high demand for obesity drugs will put pressure on payers. In the face of no reimbursement, patients in select European countries are paying out of pocket through accessible channels; self-pay is not only occurring in the US. In the UK, patients can get Wegovy prescriptions through private clinics and pay out of pocket. In Germany, patients can also pay out of pocket with a prescription. High demand from self-pay patients has actually led to shortages in Germany.

Conclusion

We expect payer views on obesity and coverage of GLP-1s to evolve over the next 5 years, likely leading to a more favorable access environment. With strong outcomes data readouts, advocacy efforts, discussions at national government levels, and rising self-pay and employer demand, payers will have to challenge their historic positions and take a renewed look at obesity as a medical condition.