Although GLP-1 drugs have been shown to improve health and provide great value for their price, many insurance plans still limit access. Researchers at the University of Mississippi are investigating the economic and practical reasons behind these restrictions and the impact on patients.
A recent analysis by the Institute for Clinical and Economic Reviews, an independent nonprofit organization that evaluates the value of health care, concluded that GLP-1 drugs such as Ozempic, Wegovy, and Zepbound are cost-effective. In other words, the health improvements they offer are considered sufficient to justify their price.
Why cost-effective doesn’t mean affordable
In a study published in Managed Care and Specialty Pharmacy JournalSujit Ramachandran, associate professor of pharmacy management, explained that the treatment can be cost-effective even if it does not save insurance companies money.
“The ICER report shows that GLP-1 provides tremendous value to society, even at the cost it is currently sold at,” he said. “However, their impact on the budget remains significant.
“This is happening because the patient population targeted by this drug is so large. So even though the drug itself shows good value for society, that doesn’t mean we as a society can live with the impact of how many individuals use it.”
According to the Centers for Disease Control and Prevention, approximately 40% of Americans are obese. Initiating GLP-1 therapy on even a relatively small percentage of that population could cost insurers billions of dollars in new expenses.
“ICER has a budget impact threshold that estimates whether the intake of a drug is likely to raise budget impact concerns,” he said. “This year’s threshold is $821 million.
“GLP-1 is well above that threshold, even at low doses.”
Long-term savings not yet proven
Supporters of expanding GLP-1 coverage often argue that treating obesity early can prevent costly health problems and reduce health care costs in the long run. Ramachandran said current evidence does not yet prove that the expected savings will actually occur.
“Our hope is that by tackling the obesity problem in this country, we should, in theory, save money on cardiovascular disease, liver disease and kidney disease in the future,” he said. “But does that mean it actually creates savings? Well, the existing data doesn’t show that.”
Many patients stop taking GLP-1 drugs within the first year. Common reasons include treatment costs, achieving weight goals, and gastrointestinal side effects. Many people regain some or all of the weight they lost when they stop taking the drug.
Ramachandran said insurers are likely to see sustained economic benefits if patients maintain their weight loss and associated reduced risk of obesity-related diseases. Achieving this may require coverage beyond the six months or one year offered by many insurance plans. It may also be necessary to provide the same lifestyle supports used in clinical trials.
GLP-1 treatment requires more than drug therapy
“The first thing to remember is that in all clinical trials, GLP-1 was tested against lifestyle management interventions, not against no treatment,” he said. “It’s not lifestyle management vs. GLP-1, it’s lifestyle management vs. lifestyle management plus GLP-1.”
This difference means patients may need a broader support system than just medication, Ramachandran said.
“We need to provide access to dietitians, we need to provide access to gym memberships, we need to provide access to fitness instructors, we need to provide access to a network of services that we can provide to make sure we’re making lifestyle changes, not just taking a pill once a week,” he said.
Concerns about compounded GLP-1 drugs
If GLP-1 therapeutics are not covered by insurance, cheaper combination products may appear to offer a more affordable option. However, researchers warn that these alternatives may come with significant risks.
Compounded GLP-1 drugs do not go through the same rigorous review process as drugs approved by the U.S. Food and Drug Administration, said Liang-Yuan Lin, an Ole Miss doctoral candidate in pharmacy management who studies compounded drug pharmacies.
“The FDA has already issued warning letters for formulated GLP-1,” she said. “FDA has discovered websites selling unapproved or incorrect ingredients, and this is scary for patients.
“Even if the correct ingredients are listed, we don’t know where those ingredients came from or how they were transported and handled. This can be extremely dangerous.”
Lin and Ramachandran advise patients to consult a doctor before starting GLP-1 drugs and to remain under medical supervision while using them. Your doctor can help you manage side effects, monitor safety, and make sure the drug is FDA-approved.
For some people, the scope expands, for others it decreases.
“I, and most people, want this drug to be available to everyone who needs it,” Ramachandran said. “However, what we are seeing is that GLP-1 coverage is becoming more accessible for certain conditions, such as sleep apnea, diabetes, extremely high BMI, or a combination of these, while coverage will likely become more limited for other conditions.
“But those pharmacies are very dangerous. These drugs are often not manufactured correctly, and you don’t always know what you’re putting into your body, so these prices are more reasonable.”
