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Medicaid spending on GLP-1 receptor agonists has skyrocketed over the past five years. Just in the past 12 months, Medicaid spending on GLP-1s specifically for obesity has reached more than $3.5 billion, according to an analysis by Real Chemistry.
A combination of increased usage and expanded state coverage is driving Medicaid spending up exponentially, reaching more than $500 million per month as of October.
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GLP-1 receptor agonists originally developed to treat Type 2 diabetes have proven highly effective in treating obesity, but with a price tag of more than $1,000 per month, these medications remain out of reach for many Americans. With nearly half the US population classified as obese, the role of the government in subsidizing these medications is a subject of increasing debate. The Biden administration recently proposed expanding obesity drug coverage under Medicare and Medicaid.
Ozempic and Wegovy from Novo Nordisk and Mounjaro and Zepbound from Eli Lilly are the primary GLP-1s on the market today. Medicare currently covers GLP-1s for patients with Type 2 diabetes or certain heart conditions but excludes coverage for management of obesity. Coverage for GLP-1s through Medicaid varies by state, with all states covering prescriptions for Type 2 diabetes and 36 states covering prescriptions aimed at weight loss. The extent of coverage, however, varies by state.
Fourteen states, including California, Michigan and Pennsylvania, provide Medicaid coverage for the most common GLP-1s approved for either Type 2 diabetes or obesity. In these states, beneficiaries have access to Wegovy, Zepbound and Saxenda for weight loss as well as Ozempic, Mounjaro and Rybelsus for Type 2 diabetes.
Twenty-two states offer partial coverage for obesity-specific GLP-1s, typically including Wegovy and sometimes Saxenda or Zepbound on their Medicaid coverage lists. These states include Texas, Arizona and Washington.
Fourteen states and the District of Columbia offer no GLP-1 coverage for obesity. These states include New York, Illinois and Ohio. A subset of these states also limit Medicaid coverage for Type 2 diabetes-indicated GLP-1s and usually only include Ozempic on their Medicaid formulary.
Spending on GLP-1s varies widely by state, the Real Chemistry analysis found. This reflects differences in coverage policies and population needs. Every state logged an increase in Medicaid spending on GLP-1s year over year as of October. The percentage increase ranged from 17% in Delaware to 794% in Rhode Island.
California’s Medicaid program spent the most of all states on GLP-1 coverage, exceeding $1.4 billion, or $118 per enrollee. That represents a 235% increase year over year and is driven by the state’s large population and comprehensive coverage of all major obesity- and Type 2 diabetes-indicated GLP-1s.
Following California in overall Medicaid spend was Pennsylvania, with nearly $298 million or $106 per enrollee. That was a 232% year-over-year increase.
Kentucky’s Medicaid program spends the most per enrollee on GLP-1s at $162 although it ranked third in total spending at $204 million. The state’s program covers only Wegovy for weight management.
Other states that ranked in the top 10 included Michigan ($204 million), New York ($178 million), Minnesota ($71 million), Maryland ($69 million), Ohio ($66 million), Wisconsin ($65 million) and Connecticut ($64 milion).
Spending the least on GLP-1s were North Dakota and Wymoning, which do not provide any Medicaid coverage for obesity-indicated GLP-1s. Other states that fell into the bottom ten in spending were Arkansas, Rhode Island, Hawaii, Utah, Vermont, Oregon, Arizona and Oklahoma.
Real Chemistry’s analysis uses its IRIS market intelligence platform that includes more than a decade of medical, hospital and pharmacy claims from more than 300 million US patients.
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