On Thursday, the agency overseeing the program said heart patients insured under the US Medicare program would be covered for Novo Nordisk's, opening a new tab for weight-loss drug Wegovy as long as it is prescribed to reduce their risk of heart attacks and strokes.
According to the US Centers for Medicare and Medicaid Services (CMS), Medicare prescription drug plans administered by private insurers (Part D) cannot cover obesity drugs. However, under the new guidelines, these medications would only be reimbursed if the US approved them for a secondary use that Medicare does cover.
Wegovy Gets US Medicare Coverage
Wegovy was approved by the FDA earlier this month to reduce the risk of stroke and heart attack in adults who are overweight or obese but do not have diabetes, based on positive findings from a large clinical trial.
A CMS spokesperson said in an emailed statement that CMS has issued guidance to Medicare Part D plans stating that anti-obesity medications that receive FDA approval for an additional medically accepted indication can be considered a Part D drug for that specific use.
Analysts predict that the market for weight-loss medications will grow to at least $100 billion annually by the end of the decade because of the overwhelming demand for products like Wegovy, Eli Lilly's (LLY.N), the new tab Zepbound, and Mounjaro.
A Novo representative stated that while the company was satisfied with the guidelines, more work was still necessary because Medicare does not currently cover obesity medications for long-term weight management.
Medicare's coverage of Wegovy opens the drug up to government price negotiations under President Joe Biden's Inflation Reduction Act. CMS has stated that rather than focusing on particular brands, the pricing it negotiates will apply to medications with the same active component.
Last year, Novo Nordisk informed analysts that it anticipated Medicare would bargain over the cost of paying for the diabetes drug Ozempic, which contains semaglutide, the same active component as in Wegovy, and new prices for the drugs in 2027. It stated that Wegovy was expected to be affected by the negotiations.
Under the Social Security Act, Medicare is not allowed to cover several medications, such as those used to treat anorexia, weight loss, and weight gain. In its guidelines, CMS noted that medicines used to treat obesity alone will still not be authorized for weight loss.
The CMS spokesperson said that a drug that receives FDA approval for chronic weight management alone would not be considered a Part D drug.
"If this same drug also receives FDA approval to treat diabetes or reduce the risk of major adverse cardiovascular events in adults with established cardiovascular disease and either obesity or overweight, then it would be considered a Part D drug for those specific uses only," the spokesperson added.
Medicare is the US government's health insurance program for people 65 years of age or older and the handicapped. It currently has about 65 million members.
The CMS spokesman said that state Medicaid programs for low-income individuals and families would have to cover Wegovy when it is used to prevent heart disease in obese people.
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Anti-Obesity Drugs Put Pressure on State Medicaid Programs
State Medicaid programs are under pressure to cover blockbuster anti-obesity drugs as evidence of their effectiveness grows. However, policy analysts argue that greater access to these medications will require reduced list prices and increased federal financing.
According to a study published on Thursday in the medical journal JAMA, based on data from researchers at Brigham and Women's Hospital and Harvard Medical School's Program On Regulation, Therapeutics, and Law, the number of anti-obesity drugs covered by state Medicaid programs rose from over 7,600 in 2011 to about 108,000 in 2022.
The primary causes of this surge were the FDA's 2014 approval of liraglutide under the brand name Saxenda and Novo Nordisk A/S's top weight-loss medication, semaglutide, under the brand Wegovy.
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