The popularity of the obesity drug Wegovy has led US employers to rethink insurance coverage

June 27 (Reuters) – Shawnte struggled with her weight for years before being prescribed Novo Nordisks’ anti-diabetic drug Ozempic for weight loss in 2020, helping the former New York music industry pro lose more of 50 kilos in two years.

But last year, the 46-year-old, who asked to be identified only by her first name to protect her privacy, was told her health insurance would not cover her weight-loss treatment. She said she was ordered to take cheaper diet drugs, which are not as effective.

The health insurance plan, which Shawnte’s husband received through her job at media company Warner Bros, said she was ineligible for Ozempic because she didn’t have diabetes. A new and more expensive version of the weight-loss drug, called Wegovy, was approved in 2021 by US health authorities. But the employer only agreed to foot the bill for Wegovy after Shawnte’s husband complained to his human resources department and a rep pushed to cover for him.

“If I’d just sat down and taken their no for an answer, I wouldn’t have had as much success with my weight loss plan,” she said, adding that she’s still using the drug.

Warner Bros. Discovery Inc did not respond to a request for comment.

Shawnte’s experience is becoming more common among the tens of millions of Americans who get health insurance through large employers, defined as companies with more than 5,000 workers, according to two health care consultants and seven doctors interviewed by Reuters.

While many of these companies covered weight-loss drugs, Wegovy’s high price and huge increase in people taking it led them to reconsider when and how to reimburse the use of such treatments to prevent a steep increase in insurance costs. healthcare, three healthcare experts say.

According to health consultants Aon, Mercer, part of Marsh & McLennan, and Willis Towers Watson, who advise employers on benefits.

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Until late last year, when Wegovy’s prescriptions began to rise, weight-loss coverage was a marginal expense for employers because available brand-name drugs were ineffective and underutilized, or readily replaced by cheaper generics, health advisers said.

Employers were also in favor of treatments that could help reduce the risk of diseases that are exacerbated by excess weight, including heart disease and diabetes.

The 2021 arrival of Wegovy and 2022 of Mounjaro, a similar diabetes treatment from Eli Lilly that is prescribed off-label but not yet approved for weight loss, changed that dynamic.

Both have been shown in clinical trials to help people lose approximately 15% of their body weight. But they cost more than $1,000 a month, according to drug company websites, and patients may need to use them indefinitely to keep the weight off.

Use of Wegovy for weight loss rose to about 135,000 new prescriptions a week in May from 45,000 in the last week of January, according to Barclays Research, and is widely expected to rise further.

This fueled a 250% increase in costs for employer-sponsored health insurance in the first two months of 2023 combined compared to all of 2022, according to Willis Towers Watson consultant Dr. Jeff Levin-Scherz. Even if only half of eligible employees use such drugs, he said, the costs for employers to insure everyone covered by their health plans could rise by 50%.

“It’s going to be very difficult to keep health care affordable if that’s the case,” Levin-Scherz said.

“We might see some employers saying, we’ve covered this but now we’re not covering it all, and others saying we’re going to continue to cover it because we think it’s really important, but we’re going to put these restrictions in place so it’s going to be harder for people to get.”

Eli Lilly declined to comment on employer coverage policies. Novo Nordisk said Wegovy should be covered more broadly like medicines for other chronic diseases.

Eligibility Requirements

Employers covering diet drugs have required medical practices to document patients’ need for Wegovy since it was approved. They are increasingly introducing additional eligibility requirements, said Aon adviser Michael Manolakis.

Some employers ask patients to try cheaper weight-loss drugs or follow structured diet and exercise programs first, while others limit access to Wegovy if patients don’t show 4 percent weight loss in three months. according to doctors.

“Until there are generic or cheaper versions (of these drugs), I think this (situation) is what we can continue to expect,” said Dr. William Yancy, a professor of medicine at Duke University.

Manolakis said companies are basing their coverage policies in part on how long employees typically stayed in their roles. In cases where the average time in a position is six to 12 months, employers are less likely to invest in diet drugs whose benefits are seen in the long term, she said.

Employers also stopped covering off-label use of Ozempic and Mounjaro for weight loss, similar to what happened to Shawnte, health advisers and doctors said.

Smaller companies are less likely to cover diet drugs, two health plan consultants said.

The federal health program Medicare for Americans age 65 and older cannot cover weight loss treatments by law. However it is obligated to allow off-label use of drugs in general, which has allowed some coverage of Ozempic for weight loss, according to health care industry analysts.

Only 16 states (the most populous are California, Pennsylvania and Michigan) cover Wegovy and other obesity drugs under their Medicaid plans for low-income patients.

(Reporting by Patrick Wingrove; Editing by Michele Gershberg and Suzanne Goldenberg)