For now, Medicare does not cover drugs prescribed specifically for weight loss, but it will cover GLP-1 class drugs if they’re prescribed for other conditions, such as Type 2 diabetes. Wegovy, for example, is covered if it is prescribed to reduce the risk of heart attack and stroke in adults with either obesity or overweight. But, in November, the Biden administration proposed reinterpreting Medicare prescription-coverage rules to allow for coverage of “anti-obesity medications.”
Such a move is reportedly part of the argument Lilly’s CEO plans to bring to the Trump administration. Rather than using drug price negotiations to reduce health care costs, Ricks aims to play up the potential to reduce long-term health care costs by improving people’s overall health with coverage of GLP-1 drugs now. This argument would presumably be targeted at Mehmet Oz, the TV presenter and heart surgeon Trump has tapped to run the Centers for Medicare and Medicaid Services.
“My argument to Mehmet Oz is that if you want to protect Medicare costs in 10 years, have [the Affordable Care Act] and Medicare plans list these drugs now,” Ricks said to Bloomberg. “We know so much about how much cost savings there will be downstream in heart disease and other conditions.”
An October report from the Congressional Budget Office strongly disputed that claim, however. The CBO estimated that the direct cost of Medicare coverage for anti-obesity drugs between 2026 and 2034 would be nearly $39 billion, while the savings from improved health would total just a little over $3 billion, for a net cost to US taxpayers of about $35.5 billion.
It’s unclear how widely the pharmacy’s drugs were distributed. Fullerton Wellness could not be reached for comment.
Bigger battles
This is just the latest warning on weight-loss drugs from the FDA, which has repeatedly cautioned about quality and safety problems related to compounded versions of the drugs. The compounded drugs are intended to be essentially copycat versions of the blockbuster brand-name drugs. Compounding pharmacies can make copycat versions only as long as the drugs are in short supply, acting as a stopgap for patient access. But, with the popularity of the drugs and the high prices of the brand name versions, compounded formulations have become seen as affordable alternatives for many patients.
The situation has become a legal quagmire, with less-than-scrupulous compounding facilities drawing the ire of the FDA, and the big pharmaceutical companies fighting with their compounding competition. Eli Lilly, maker of Zepbound and Mounjaro (tirzepatide), and Novo Nordisk, maker of Wegovy and Ozempic (semaglutide), have both sued multiple compounding pharmacies over copycat versions of their lucrative drugs, which they claim are unsafe and fraudulent.
Meanwhile, in October, a trade organization for large-scale compounding pharmacies sued the FDA after the regulator removed tirzepatide from the drug shortage list, a move that blocks compounders from making copycat versions of the drug. But, the FDA quickly backpedaled in court, saying it would reconsider the removal and would allow compounders to keep producing off-brand versions in the meantime.
Also in October, Novo Nordisk asked the FDA to stop letting compounders make copycat versions of semaglutide, arguing that the drug is too complex for compounders to make and poses too many safety risks to patients. In response, the trade organization for compounders, the Outsourcing Facilities Association, submitted a letter to the FDA asking it to require Novo Nordisk to provide an economic impact statement to assess the cost and price increases that could occur if semaglutide were no longer available through compounding pharmacies.
Buying counterfeit weight loss drugs from illegal online pharmacies that don’t require prescriptions is, in fact, a very bad idea, according to a study published Friday in JAMA Network Open.
The counterfeit drugs are sold as equivalents to the blockbuster semaglutide drugs, Ozempic and Wegovy, which are prescription only. When researchers got their hands on three illegal versions, they found that the counterfeit drugs had low-purity semaglutide, had dosages that exceeded the labeled amount, and one had signs of bacterial contamination.
The three substandard drugs tested came from three different illegal online pharmacies, which sold them as generic semaglutide drugs for weight loss, appetite suppression, diabetes, and cardiovascular health. However, the researchers, led by scientists at the University of California, San Diego, and the University of Pécs in Hungary, had initially tried purchasing counterfeit drugs from six such sellers.
Three of the illegal pharmacies, which specifically sold Ozempic knockoffs, never delivered the drugs after researchers paid for them. Instead, the researchers were hit with “nondelivery” scams, in which the sellers requested additional, hefty payments, supposedly needed to get through customs. These extra fees ranged from $650 to $1,200—much more than what the researchers paid for small dosages of the counterfeit drugs, which ranged from $113 to $360 across the six sellers.
Rogue pharmacies
The Ozempic scams were run out of the rogue online pharmacies: weightcrunchshop.com, puremedsonline.com, and genius-pharmacy.com. The three pharmacies that delivered dubious drugs included semaspace.com, uschemlabs.com, and biotechpeptides.com.
Two of the sellers—semaspace.com and uschemlabs.com—have already received warning letters from the Food and Drug Administration for selling unapproved, misbranded drugs. At the time of publication, the Semaspace website was no longer reachable. The US Chem Labs site was still available, but their semaglutide vials were all listed as out of stock.
The study’s findings, while unsurprising, highlight the risk people may take in efforts to get hold of the popular drugs. Steep prices, lack of insurance coverage, and drug shortages have kept the drugs out of reach for many who could benefit from them. Compounding pharmacies have stepped in to make copycat versions. While these are legal and can come from legitimate pharmacies—ones that are properly registered and require prescriptions—they also carry risks. Compounded drugs are not approved by the FDA and may pose safety and efficacy risks. Last week, the FDA warned of increasing reports of people overdosing on semaglutide products made in compounding pharmacies, leading some patients to be hospitalized.
Enlarge/ Ozempic is a GLP-1 drug for adults with type 2 diabetes.
For patients with Type 2 diabetes, taking one of the new GLP-1 drugs, such as Ozempic, is associated with lower risks of developing 10 out of 13 obesity-associated cancers as compared with taking insulin, according to a recent study published in JAMA Network Open.
The study was retrospective, capturing data from over 1.6 million patients with Type 2 diabetes but no history of obesity-associated cancers prior to the study period. Using electronic health records, researchers had follow-up data for up to 15 years after the patients started taking either a GLP-1 drug, insulin, or metformin between 2008 and 2015.
This type of study can’t prove that the GLP-1 drugs caused the lower associated risks, but the results fit with some earlier findings. That includes results from one trial that found a 32 percent overall lower risk of obesity-associated cancers following bariatric surgery for weight loss.
In the new study, led by researchers at Case Western Reserve University School of Medicine, some of the GLP-1-associated risk reductions were quite substantial. Compared with patients taking insulin, patients taking a GLP-1 drug had a 65 percent lower associated risk of gall bladder cancer, a 63 percent lower associated risk of meningioma (a type of brain tumor), a 59 percent lower associated risk for pancreatic cancer, and a 53 percent lower associated risk of hepatocellular carcinoma (liver cancer). The researchers also found lower associated risks for esophageal cancer, colorectal cancer, kidney cancer, ovarian cancer, endometrial cancer, and multiple myeloma.
Compared with insulin, the researchers saw no lowered associated risk for thyroid and breast cancers. There was a lower risk of stomach cancer calculated, but the finding was not statistically significant.
Gaps and goals
The GLP-1 drugs did not show such promising results against metformin in the study. Compared with patients taking metformin, patients on GLP-1 drugs saw lower associated risks of colorectal cancer, gall bladder cancer, and meningioma, but those calculations were not statistically significant. The results also unexpectedly indicated a higher risk of kidney cancer for those taking GLP-1 drugs, but the cause of that potentially higher risk (which was not seen in the comparison with insulins) is unclear. The researchers called for more research to investigate that possible association.
Overall, the researchers call for far more studies to try to confirm a link between GLP-1 drugs and lower cancer risks, as well as studies to try to understand the mechanisms behind those potential risk reductions. It’s unclear if the lower risks may be driven simply by weight loss, or if insulin resistance, blood sugar levels, or some other mechanisms are at play.
The current study had several limitations given its retrospective, records-based design. Perhaps the biggest one is that the data didn’t allow the researchers to track individual patients’ weights throughout the study period. As such, researchers couldn’t examine associated cancer risk reductions with actual weight loss. It’s one more aspect that warrants further research.
Still, the study provides another promising result for the blockbuster, albeit pricy, drugs. The researchers suggest extending their work to assess whether GLP-1 drugs could be used to improve outcomes in patients with Type 2 diabetes or obesity who are already diagnosed with cancer, in addition to understanding if the drugs can help prevent the cancer.
Enlarge/ Lars Fruergaard Jorgensen, chief executive officer Novo Nordisk A/S, during an interview at the company’s headquarters in Bagsvaerd, Denmark, on Monday, June 12, 2023.
After some persuasion from Sen. Bernie Sanders (I-Vt.), the CEO of Novo Nordisk will testify before lawmakers later this year on the “outrageously high cost” of the company’s diabetes and weight-loss drugs—Ozempic and Wegovy—in the US.
CEO Lars Jørgensen will appear before the Senate Committee on Health, Education, Labor, and Pensions (HELP), which is chaired by Sanders, in early September. The agreement came after a conversation with Sanders in which the CEO reportedly “reconsidered his position” and agreed to testify voluntarily. As such, Sanders has canceled a vote scheduled for June 18 on whether to subpoena Novo Nordisk to discuss its US prices, which are considerably higher than those of other countries.
The independent lawmaker has been working for months to pressure Novo Nordisk into lowering its prices and appearing before the committee. In April, Sanders sent Jørgensen a letter announcing an investigation into the prices and included a lengthy set of information requests. In May, the committee’s investigation released a report suggesting that Novo Nordisk’s current pricing threatens to “bankrupt our entire health care system.”
Sanders has repeatedly hammered not only the high prices of Novo Nordisk’s two blockbuster drugs but also the huge disparity between US prices and those in other countries.
Up to 15x more in the US
“Novo Nordisk currently charges Americans with type 2 diabetes $969 a month for Ozempic, while this same exact drug can be purchased for just $155 in Canada and just $59 in Germany,” Sanders wrote in April. “Novo Nordisk also charges Americans with obesity $1,349 a month for Wegovy, while this same exact product can be purchased for just $140 in Germany and $92 in the United Kingdom.”
Yale researchers, meanwhile, published a study in JAMA in March estimating that both drugs could be manufactured for less than $5.
In May, Novo Nordisk responded with a letter to Sanders, arguing that blame for high prices in the US lies with the country’s complex health system and with middle managers who take cuts, according to Bloomberg. Novo Nordisk said in the letter that it is prepared to address “systemic issues so that everyone who can benefit from its medicines is able to get them,” the outlet reported. The company also said it has spent over $10 billion on research and development to bring Wegovy and Ozempic to the market.
Still, that number is small in comparison to the projected revenue from the drugs. Bloomberg noted that analysts estimate that Novo Nordisk will make $27 billion from the two drugs this year alone. The May analysis by the HELP committee found that if just half of the adults in the US with obesity start taking a new weight-loss drug, such as Wegovy, the collective cost would be around $411 billion per year. Another report by the Congressional Budget Office found that the drugs’ costs are so high that they will not be offset by any financial gains from improved health outcomes.
“The Committee looks forward to Mr. Jørgensen explaining why Americans are paying up to 10 or 15 times more for these medications than people in other countries,” Sanders said last week.
As new diabetes and weight-loss drugs help patients curb appetites and shed pounds, food manufacturers are looking for new ways to keep their bottom lines plump.
Millions of Americans have begun taking the pricey new drugs—particularly Mounjaro, Ozempic, Wegovy, and Zepbound—and millions more are expected to go on them in the coming years. As such, food makers are bracing for slimmer sales. In a report earlier this month, Morgan Stanley’s tobacco and packaged food analyst Pamela Kaufman said the drugs are expected to affect both the amounts and the types of food people eat, taking a bite out of the food and drink industry’s profits.
“In Morgan Stanley Research surveys, people taking weight-loss drugs were found to eat less food in general, while half slashed their consumption of sugary drinks, alcohol, confections and salty snacks, and nearly a quarter stopped drinking alcohol completely,” Kaufman said. Restaurants that sell unhealthy foods, particularly chains, may face long-term business risks, the report noted. Around 75 percent of survey respondents taking weight-loss drugs said they had cut back on going to pizza and fast food restaurants.
Some food makers aren’t taking the threat lightly. On Tuesday, the massive multinational food and beverage conglomerate Nestlé announced a new line of frozen foods, called Vital Pursuit, aimed directly at people taking GLP-1 weight-loss drugs (Wegovy and Ozempic). Nestlé—maker of DiGiorno frozen pizzas and Stouffer’s frozen entrées—said the new product line will include frozen pizzas, sandwich melts, grain bowls, and pastas that are “portion-aligned to a weight loss medication user’s appetite.” The frozen fare is otherwise said to contain fiber, “essential nutrients,” and high protein, food features not specific for people on GLP-1 drugs.
“As the use of medications to support weight loss continues to rise, we see an opportunity to serve those consumers,” Steve Presley, CEO of Nestlé North America, said in the product line announcement. “Vital Pursuit provides accessible, great-tasting food options that support the needs of consumers in this emerging category.”
Nestlé isn’t alone. At the end of last year, WeightWatchers began offering a membership program for people taking GLP-1 drugs. In January, meal delivery service Daily Harvest announced its “GLP-1 Companion Food Collection.” And last month, GNC announced a “GLP-1 support program” for people on the drugs, which includes a collection of various supplements, coaching, and consultations.
The companies seem to be heeding the advice of analysts. Morgan Stanley’s report noted that food makers can adapt to people’s changing diets by “raising prices, offering ‘better for you’ or weight-management products, or catering to changing trends with vegan or low-sugar options.” Kaufman noted that some companies are already adjusting by selling smaller packages and portions.
Enlarge/ Packaging for Wegovy, manufactured by Novo Nordisk, is seen in this illustration photo.
With the debut of remarkably effective weight-loss drugs, America’s high obesity rate and its uniquely astronomical prescription drug pricing appear to be set on a catastrophic collision course—one that threatens to “bankrupt our entire health care system,” according to a new Senate report that modeled the economic impact of the drugs in different uptake scenarios.
If just half of the adults in the US with obesity start taking a new weight-loss drug, such as Wegovy, the collective cost would total an estimated $411 billion per year, the analysis found. That’s more than the $406 billion Americans spent in 2022 on all prescription drugs combined.
While the bulk of the spending on weight-loss drugs will occur in the commercial market—which could easily lead to spikes in health insurance premiums—taxpayer-funded Medicare and Medicaid programs will also see an extraordinary financial burden. In the scenario that half of adults with obesity go on the drug, the cost to those federal programs would total $166 billion per year, rivaling the programs’ total 2022 drug costs of $175 billion.
In all, by 2031, total US spending on prescription drugs is poised to reach over $1 trillion per year due to weight-loss drugs. Without them, the baseline projected spending on all prescription drugs would be just under $600 billion.
The analysis was put together by the Senate’s Health, Education, Labor, and Pensions (HELP) committee, chaired by staunch drug-pricing critic Bernie Sanders (I-Vt). And it’s quick to knock down a common argument about the high prices for smash-hit weight-loss drugs. That is, with their high effectiveness, the drugs will improve people’s health in wide-ranging ways, including controlling diabetes, improving cardiovascular health, and potentially more. And, with those improvements, people won’t need as much health care, generally, lowering health care costs across the board.
But, while the drugs do appear to have wide-ranging, life-altering benefits for overall health, the prices of the drugs are still set too high to be entirely offset by any savings in health care use. The HELP committee analysis cited a March Congressional Budget Office (CBO) report that found: “at their current prices, [anti-obesity medicines] would cost the federal government more than it would save from reducing other health care spending—which would lead to an overall increase in the deficit over the next 10 years.” Moreover, in April, the head of the CBO said that the drugmakers would have to slash prices of their weight-loss drugs by 90 percent to “get in the ballpark” of not increasing the national deficit.
The HELP committee report offered a relatively simple solution to the problem: Drugmakers should set their US prices to match the relatively low prices they’ve set in other countries. The report focused on Wegovy because it currently accounts for the most US prescriptions in the new class of weight-loss drugs (GLP-1 drugs). Wegovy is made by Denmark-based Novo Nordisk.
In the US, the estimated net price (after rebates) of Wegovy is $809 per month. In Denmark, the price is $186 per month. A study by researchers at Yale estimated that drugs like Wegovy can be profitably manufactured for less than $5 per month.
If Novo Nordisk set its US prices for Wegovy to match the Danish price, spending to treat half of US adults with obesity would drop from $411 billion to $94.5 billion, a roughly $316.5 billion savings.
Without a dramatic price cut, Americans will likely face either losing access to the drugs or shouldering higher overall health care costs, or some of both. The HELP committee report highlighted how this recently played out in North Carolina. In January, the board of trustees for the state employee health plan voted to end all coverage of Wegovy and other GLP-1 drugs due to the cost. Estimates found that if the plan continued to cover the drugs, the state would need to nearly double health insurance premiums to offset the costs.
Enlarge/ Wegovy is an injectable prescription weight loss medicine that has helped people with obesity.
The health plan for North Carolina state employees will stop covering blockbuster GLP-1 weight-loss drugs, including Wegovy and Zepbound, because—according to the plan’s board of trustees—the drugs are simply too expensive.
Last week, the board voted 4-3 to end all coverage of GLP-1 medications for weight loss on April 1. If the coverage is dropped, it is believed to be the first major state health plan to end coverage of the popular but pricey weight-loss drugs. The plan will continue to pay for GLP-1 medications prescribed to treat diabetes, including Ozempic.
The North Carolina State Health Plan covers nearly 740,000 people, including teachers, state employees, retirees, and their family members. In 2023, monthly premiums from the plan ranged from $25 for base coverage for an individual to up to $720 for premium family coverage. Members prescribed Wegovy paid a co-pay of between $30 and $50 per month for the drug, while the plan’s cost was around $800 a month.
In 2021, just under 2,800 members were taking the drugs for weight loss, but in 2023, the number soared to nearly 25,000 members, costing the plan $102 million. That’s about 10 percent of what the plan pays for all prescription drugs combined. If the current coverage continued, the plan’s pharmacy benefit manager, CVS Caremark, estimated that by 2025, the plan’s premiums would have to rise $48.50 across the board to offset the costs of the weight-loss drugs.
Without insurance, the list price of Wegovy is $1,349 per month, totaling $16,188 for a year of treatment. The average reported salary for members of North Carolina’s health plan is $56,431.
Last October, the board voted to grandfather the 25,000 or so current users, maintaining coverage for them moving forward, but then to stop offering new coverage to members. However, according to CVS Caremark, the move would mean losing a 40 percent rebate from Wegovy’s maker, Novo Nordisk. This would be a loss of $54 million, bringing projected 2024 costs to $139 million.
A spokesperson for Novo Nordisk called the vote to end coverage entirely “irresponsible,” according to a statement given to media. “We do not support insurers or bureaucrats inserting their judgment in these medically driven decisions,” the statement continued.
While the costs of weight-loss drugs are high everywhere, the pricing is particularly bitter for North Carolinians—Novo Nordisk manufactures Wegovy in Clayton, North Carolina, southeast of Raleigh.
“It certainly adds insult to injury,” Ardis Watkins, executive director of the State Employees Association of North Carolina, a group that lobbies on behalf of state health plan members, according to The New York Times. “Our economic climate that has been made so attractive to businesses to locate here is being used to manufacture a drug that is wildly marked up.”
While it appears to be the first time such a large state health plan has dropped coverage of the weight-loss drugs, North Carolina is not alone in wrestling with the costs. The University of Texas’ employee plan ceased coverage of Wegovy and Saxenda, another weight-loss drug, in September. Connecticut’s state health plan, meanwhile, added restrictions on how members could get a prescription covered. Some state health plans that cover GLP-1 medications for weight-loss have prior authorization procedures to try to limit use.
“Every state has been wrestling with it, every professional association that my staff is a part of has had some discussion about it,” Sam Watts, director of the North Carolina State Health Plan, told Bloomberg. “But to our knowledge, we’re the first major state health plan to act on it.”
