Despite high prices, covering effective weight-loss drugs may save money in long run

Promising new weight-loss medications can be costly — but so is the impact of obesity on worker health and productivity. The question for employers is whether it makes sense to include such drugs as Ozempic, Wegovy and the newly launched Mounjaro in their health plans.

One thing everyone agrees on is the prevalence of obesity and its impact on health. It is linked to heightened risks for more than 50 health problems, including diabetes, heart disease, stroke and certain types of cancer, according to a new report from Goodroot. Adult obesity rates have risen from 30.5% of the U.S. population in 2000 to 42% in 2020. The escalating prevalence of obesity and pre-obesity underlines the urgent need for comprehensive strategies to address this national health crisis.

Weight-loss drugs, like most pharmaceuticals, come with tradeoffs. On the positive side, clinical trials for Wegovy, a weekly injectable, indicated that patients lost an average of 15% of their body weight over a 68-week period. Studies involving diabetic patients using Rybelsus, the daily oral version of semaglutide, recorded a more modest weight loss of 5% to 7% over one year. However, in the ongoing oral semaglutide trial for weight loss, a considerably higher dosage is being administered. It is anticipated that with this higher dosage, results will align more closely with those reported for injectable versions.

However, these drugs also can carry side effects such as nausea, vomiting, diarrhea, constipation and abdominal pain. Interestingly, these side effects, which can be severe, inadvertently may contribute to the efficacy of these drugs, because many patients report a diminished appetite while on the medication.

The medications also can be expensive. The Institute for Clinical and Economic Review suggests that for Wegovy to be deemed cost-effective, its annual pricing should range between $7,500 and $9,800. Although this still may present a financial burden for uninsured patients, the recommended monthly cost of around $750 potentially could encourage more insurance providers to include weight-loss agents in their coverage plans.

Addressing obesity may help avert costlier treatments in the future. According to a 2018 report by The Milken Institute, obesity-related complications resulted in $1.39 trillion worth of direct medical treatments and indirect productivity losses from chronic diseases in the United States. This figure doesn’t account for additional costs associated with obesity-induced health conditions, such as the strain on families, potential income loss and the involvement of caregivers.

“Covering weight loss medications will be a significant expenditure for payers on the pharmacy benefit but could potentially result in long-term savings,” the report concluded. “Recent research supports this perspective. A retrospective cohort study involving over 200,000 commercially insured patients demonstrated that those using weight-loss medications had decreased health care costs in the second year, whereas untreated patients saw rising costs.

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“This evidence suggests that payers could experience an early return on investment when choosing to cover anti-obesity medications. The decision to cover will be up to the plan sponsor.”