About 3.6 million Medicare enrollees may qualify for coverage of the anti-obesity drug Wegovy, according to a KFF analysis released Wednesday. But it could wind up costing Medicare nearly $3 billion a year and contribute to higher Part D premiums for all beneficiaries.
Medicare announced last month that Part D drug plans could start covering Wegovy for beneficiaries who are overweight or obese and have a history of heart disease after the US Food and Drug Administration approved drugmaker Novo Nordisk’s application to add cardiovascular benefits to the medicine’s label.
GLP-1 medications such as Wegovy and its sister drug Ozempic, which is approved to treat diabetes, have exploded in popularity because they can lead to weight loss. Medicare is banned by law from covering anti-obesity drugs, but the FDA’s expanded Wegovy approval for reducing the risk of heart attack and stroke in certain people opens the door to more beneficiaries being covered.
An estimated 7% of Medicare enrollees – including just over a quarter of those diagnosed as overweight or obese – fit the criteria for Wegovy coverage in 2020, according to KFF. Of the 3.6 million beneficiaries, 1.9 million of them had diabetes and may have been already been eligible for Medicare coverage of GLP-1 drugs for that disease.
Just how many beneficiaries start taking Wegovy depends on several factors, including how many insurers add it to their Part D formularies. CVS Health’s Aetna and several other insurers have said they will do so, although they may add restrictions, such as prior authorization.
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Also, Wegovy’s hefty price may be a hurdle for some enrollees, who could face monthly co-insurance costs of $325 to $430 before they reach the new cap on out-of-pocket drug spending, KFF said. The limits are about $3,300, based on brand-name drugs only, this year and $2,000 next year.
The price tag for Medicare could approach $3 billion for one year, assuming just 10% of eligible beneficiaries use Wegovy and if Part D plans receive a 50% rebate on the list price of $1,300 a month, according to KFF.
But it will probably result in higher Part D premiums for enrollees, though the exact impact is difficult to pin down, said Juliette Cubanski, deputy director of the Program on Medicare Policy at KFF.
Medicare is facing steep increases in spending on GLP-1 drugs. It shelled out $5.7 billion on Ozempic and other similar diabetes drugs in 2022, up from $57 million in 2018, though this estimate does not include rebates, according to a separate KFF analysis.
Medicare could choose Wegovy and Ozempic for its drug negotiation program as early as 2025, KFF said, which could lower spending on the medications.
