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.
Pivotal Peptides—which is not a licensed pharmacy or dispensary—did not respond to the letter. Instead, its website was modified to indicate that it was “down for maintenance,” and the company instructed customers to email directly. About 10 days later, Pivotal Peptides’ registered agent, Elizabeth Gately, then sent an email (which Lilly obtained) instructing customers to place tirzepatide orders using coded language.
“Good News,” the email read, “Pivotal Peptides … is still in business!”
“If a favorite product (starting with T) was your go-to, that name can’t be used in any correspondence with me or listed on my price sheet anymore,” Gately allegedly wrote. “Therefore, I need another identifier and decided (for now) to call this peptide ’11mg.'”
Gately went on to say that the codenamed product “is Pivotal Peptide’s [sic] bestseller,” and “it is the only T size available from PP right now except by special order.” The letter ended with: “Remember to order ’11 mg’ with the latest price to identify the product you want, if applicable, and no longer use T in our communication.”
Pivotal Peptides did not respond to Ars’ request for comment.
In a statement emailed to Ars, a Lilly spokesperson said Pivotal Peptides and the other companies Lilly is suing are engaging in “conduct that poses serious risks to patient safety.” In the lawsuit, Lilly notes that even children could be ordering this DIY, research-grade drug.
“No one should ever be allowed to sell these untested, non-human grade or manipulated drugs to American consumers,” the statement continued.
Lilly’s lawsuits come amid a legal storm over compounded versions of the tirzepatide, which can be legally made by licensed pharmacies as long as tirzepatide is in shortage. On October 2, the Food and Drug Administration announced that the shortage had ended but then decided to reconsider the decision after being sued by compounding pharmacies.
On several occasions, the FDA has warned of safety concerns related to compounded versions of GLP-1 weight-loss drugs.
The judge in the case, District Judge Mark Pittman, granted the FDA’s request, canceling an October 15 hearing, and ordering the parties to submit a joint status report on November 21.
Drugmakers respond
The move was celebrated by the Outsourcing Facilities Association (OFA), which filed the lawsuit.
“We believe that this is a fair resolution in light of the agency’s rash decision to take the drug off of the list at a time when the agency has acknowledged ‘supply disruptions,’ which immediately created a major access issue for patients everywhere,” OFA Chairperson Lee Rosebush said in a statement. “Most important, should the FDA repeat its removal decision when a shortage still genuinely exists, we will return to court.”
The move is also likely to please patients who have come to rely on cheaper, more readily available compounded versions of the drugs. For some, compounded products may have been their only access to tirzepatide. Still, those drugs are not without risk. The FDA has repeatedly emphasized that compounded drugs are not FDA-approved and do not go through the same safety, efficacy, and quality reviews. And the agency has warned of dosing errors and other safety concerns with compounded versions.
The one party that is certainly unhappy with the FDA’s move is Eli Lilly, which had reportedly sent cease-and-desist letters to compounders. In an emailed statement to Ars, a spokesperson for Lilly said that there was sufficient supply of the company’s drug and continued use of compounded versions is unwarranted. “Nothing changes the fact that, as FDA has recognized, Mounjaro and Zepbound are available and the shortage remains ‘resolved,'” the spokesperson said.
Lilly also noted the FDA’s safety concerns about the compounded versions, adding that its own examination of some compounded products found impurities, bacteria, strange coloring, incorrect potency, puzzling chemical structures, and, in one case, a product that was just sugar alcohol.
“All doses of Lilly’s FDA-approved medicines are available and it is important that patients not be exposed to the risks in taking untested, unapproved knockoffs,” the spokesperson said.
In terms of the supply “disruptions” the FDA mentioned and that some patients and pharmacies have reportedly experienced, Lilly said that the supply chain was complex and there are many reasons why a given pharmacy may not have a specific dose at hand, such as limited refrigerated storage space.
Enlarge/ An Eli Lilly & Co. Zepbound injection pen arranged in the Brooklyn borough of New York, US, on Thursday, March 28, 2024.
Pharmaceutical giant Eli Lilly earned praise this week with an announcement that it is now selling starter dosages of its popular weight-loss drug tirzepatide (Zepbound) at a price significantly lower than before. But the cheers were short-lived as critics quickly noticed that Lilly also quietly raised the price on current versions of the drug—a move that was notably missing from the company’s press release this week.
In the past, Lilly sold Zepbound only in injectable pens with a list price of $1,060 for a month’s supply. Several dosages are available—2.5 mg, 5 mg, 7.5 mg, 10 mg, 12.5 mg, or 15 mg—and patients progressively increase their dosage until they reach a maintenance dosage. The recommended maintenance dosages are 5 mg, 10 mg, or 15 mg. The higher the dose, the more the weight loss. For instance, people using the 15 mg doses lost an average of 21 percent of their weight over 17 months in a clinical trial, while those on 5 mg doses only lost an average of 15 percent of their weight.
On Tuesday, Lilly announced that it will now sell Zepbound in vials, too. And a month’s supply of vials with the 2.5 mg doses will cost $399, while a month’s supply of 5 mg doses is priced at $549—a welcome drop from the $1,060 price tag. These prices are for a self-pay option, meaning that patients with a valid, on-label prescription can buy them directly from Lilly if they have no insurance or have insurance that does not cover the drug.
“This new option helps millions of adults with obesity access the medicine they need,” Lilly said in its announcement of the vials and their prices.
The company also included a quote from James Zervos, chief operating officer of the nonprofit Obesity Action Coalition. “Expanding coverage and affordability of treatments is vital to people living with obesity,” Zervos said. “We commend Lilly for their leadership in offering an innovative solution that brings us closer to making equitable care a reality.” Even President Biden chimed in on social media, saying he was “pleased” by the discount, though he urged drug companies to cut prices “across the board.”
“No rational reason, other than greed”
But, that wasn’t the end of the news. When Lilly released its press release, people noticed that the company had also increased the price of Zepbound pens for those who have insurance plans that don’t cover the drug. In the past, Lilly offered a “savings card” that allowed these patients to buy a month’s supply of any dosage of Zepbound pens for $550. Now the price is $650, a nearly 20 percent increase.
Lilly did not respond to Ars’ request for comment or questions about why the company increased the price for some patients.
Sen. Bernie Sanders (I-Vt.), a longtime critic of the pharmaceutical industry and their drug pricing, was quick to weigh in. He called the vial prices a “modest step forward” but noted that, even with the price reduction, millions of Americans still won’t be able to pay for the drug. At $549 a month, the price of the drug is a little over the average monthly payment for a used car, which was $523 in the first quarter of this year, according to Experian. As for the increase in pen pricing, Sanders called it “bad news.”
“In addition, Eli Lilly has still refused to lower the outrageous price of Mounjaro that Americans struggling with diabetes desperately need,” Sanders went on. “There is no rational reason, other than greed, why Mounjaro should cost $1,069 a month in the United States but just $485 in the United Kingdom and $94 in Japan.”
In May, a Senate committee report concluded that uptake of such weight-loss and diabetes drugs stands to “bankrupt our entire health care system,” given the high prices and large demand in the US. The report was produced by the Senate’s Health, Education, Labor, and Pensions (HELP) committee, which is chaired by Sanders.
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.
