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A diabetes drug for weight loss? It’s going to cost you

This photo shows the logo of Danish pharmaceutical company Novo Nordisk in front of the firm's headquarters near Copenhagen
The logo of Danish pharmaceutical giant Novo Nordisk is pictured atcompany headquarters in Bagsvaerd, outside of Copenhagen, Denmark.
(Liselotte Sabroe / Scanpix / AFP via Getty Images)

Ads for the latest drugs to treat Type 2 diabetes sometimes include an unusual warning: They might cause weight loss. That side effect is one that many people — especially those with Type 2 diabetes, which is associated with obesity — may desperately want.

Now some of the same drugs are being reformulated and renamed by manufacturers as a new obesity treatment. Last month, the Food and Drug Administration approved one of the first: Novo Nordisk’s Wegovy, a higher-dose version of the company’s injectable diabetes drug, Ozempic.

Wegovy’s monthly wholesale price — set at $1,349 — is about 58% more than Ozempic’s already high monthly cost, although, the company points out, Wegovy’s injector pens contain more than twice as much of the active ingredient. That it also probably needs to be taken long term adds to the dilemma facing employers and insurers, who must now dive into a cost-benefit analysis.

It’s too early to know yet how many employers will cover Wegovy, although about 40% currently offer a similarly priced, but less effective, weight-loss injectable drug also made by Novo Nordisk. Wegovy’s effectiveness may also put pressure on the Medicare program, which bars coverage for obesity medications or others used for “anorexia, weight loss or weight gain,” although it does pay for bariatric surgery.

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Clinical trials showed using Wegovy led to significant weight loss for many patients.

“People who go on this medication lose more weight than with any drug we’ve seen, ever,” said Dr. Fatima Cody Stanford, an obesity medicine specialist at Massachusetts General Hospital and Harvard Medical School who was not involved with any of the clinical trials.

Studies so far show that patients may need to take it indefinitely to maintain weight loss, translating to a tab that could top $323,000 over 20 years at the current price.

The arrival of this new class of weight loss drugs — one from Lilly may soon follow — has created a thicket of issues for those who will pay for them. But it’s an attractive market for drugmakers: Type 2 diabetes affects about 10% of Americans, but obesity affects 42% of adults.

The Food and Drug Administration gives approval for a new version of Wegovy, a popular diabetes medicine, to be sold as a weight-loss drug.

Maryland resident Phylander Pannell said she lost 65 pounds in a clinical trial of Wegovy. That study gave the drug to all participants for the first 20 weeks, then randomly assigned patients to receive either the drug or a placebo for the next 48 weeks to determine what happened when the medication was stopped. Only after the trial ended did Pannell find out she was in the treatment group the entire time.

Her weight fell slowly at first, then ramped up, eventually bringing her 190-pound frame down to about 125. Pains in her joints eased; she felt better all around.

“I definitely feel the drug was it for me,” said Pannell, 49, who also followed the trial’s guidance on diet and exercise. The study found that both groups lost weight in the initial 20 weeks, but those who continued to get the drug lost an additional average of 7.9% of their body weight. Those who got a placebo gained back nearly 7%.

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After the trial ended, and the COVID-19 pandemic hit, Pannell regained some weight, and is now at 155. She is eager to get back on the medication and hopes her job-based insurance will cover it.

Many employers do cover obesity drugs. For example, about 40% of private employer plans include Novo Nordisk’s once-daily injection called Saxenda on their health plans, said Michael Bachner, Novo Nordisk’s director of media relations.

People stand around a bus that bears the words "Changing Diabetes."
A cycling team holds a meet and green in London on Wednesday. The team, made up of riders who have diabetes, is sponsored by Novo Nordisk, whose diabetes drug is being repurposed for weight loss.
(Jack Thomas / Getty Images)

He said the $1,349-a-month wholesale acquisition price of Wegovy was determined by making it equivalent to Saxenda, which is less effective.

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Still, that is more than the $851 monthly wholesale price of Ozempic. But, he points out, the recommended dosage of Wegovy is more than twice that of Ozempic. Four milligrams come in the Ozempic injector pens for the month, while Wegovy has 9.6.

“There’s more drug in the pen,” Bachner said. “That drives the price up.”

He added: “This is not a 20-year-old drug that we now have a new indication for and are pricing it higher. It’s a whole different clinical program,” which required new trials.

Innova Medical Group in Pasadena secured contracts worth at least $2.7 billion selling Chinese-made antigen tests to the U.K. government despite questions over their accuracy.

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As employers and their health plans consider whether to pay for Wegovy and other weight management drugs, the decision is complicated by many unknowables concerning their long-term use and whether competition might eventually lower the price.

“The metric we try to use is value,” said James Gelfand, senior vice president for health policy at the ERISA Industry Committee, which represents large, self-insured employers. “If we pay for this drug, how much is this going to cost, and how much value will it provide to the beneficiaries?”

Private insurers will have to consider a cost-benefit analysis of adding Wegovy to their list of covered treatments, either broadly or with limits. Obesity was first recognized as a disease by the American Medical Assn., easing the path for insurance coverage, in 2013.

“Employers are going to have a bit of a challenge” deciding whether to add the benefit to insurance offerings, said Steve Pearson, founder and president of the Institute for Clinical and Economic Review, which provides cost-benefit analyses of medical treatments but has not yet looked at Wegovy.

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Weight loss treatments have had a lackluster past, producing only modest results. Many employers and insurers probably remember Fen-Phen, a combination of fenfluramine and dexfenfluramine that was pulled from the market in the late 1990s for causing heart valve problems.

That Wegovy, and possibly others that follow it, appear more effective but are also pricier than the small number of previous weight loss medications will add more fuel to that debate.

The COVID-19 pandemic has brought into stark focus the long battle between the medical establishment and the fat acceptance movement.

Past treatments were shown to prompt weight loss in the range of 5% to 10% of body weight. But many had relatively serious or unpleasant side effects.

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Wegovy, however, helped patients lose an average of 15% of their body weight over 68 weeks in the main clinical trial that led to its approval.

A comparison group whose members received placebo injections lost an average of 2.5% over the same period. On the high end, nearly a third of patients in the treatment group lost 20% or more. Both groups had counseling on diet and exercise.

Side effects, generally considered mild, included nausea, diarrhea, vomiting and constipation. A few patients developed pancreatitis, a serious inflammation of the pancreas. Like the diabetes medication, the drug carries a warning about a potential risk of a type of thyroid cancer.

Weight loss in those taking Wegovy puts the drug close to the 20% to 25% losses seen with bariatric surgery, said Stanford at Mass General, and well above the 3% to 4% seen with diet and other lifestyle changes alone.

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Participants also saw reductions in their waistlines and improvements in their blood pressure as well as their blood sugar levels, which may mean they won’t develop diabetes, said Dr. Sean Wharton, an internal medicine specialist and adjunct professor at York University in Toronto who was among the coauthors of the report outlining the results of the first clinical trial of Wegovy.

Since weight loss is known to reduce the risk of heart attack, high blood pressure and diabetes, might the new drug type be worth it?

Covering such treatment would be a sea change for Medicare.

Pharmaceutical companies, patient advocates and some medical professionals are backing proposed federal legislation to allow coverage. But the legislation, the Treat and Reduce Obesity Act, has not made progress despite being reintroduced every year since 2012, and sponsors are now asking federal officials instead to rewrite existing rules.

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Earlier estimates — some commissioned by Novo Nordisk — of the potential cost of adding an obesity drug benefit to Medicare showed an overall reduction in spending when better health from the resulting weight loss was factored in. Still, those estimates considered much less expensive drugs, including a range of generic and branded drugs costing $7 a month to more than $300, a small fraction of Wegovy’s cost.

Appleby writes for Kaiser Health News, an editorially independent publication of the Kaiser Family Foundation.


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