"The drugs are new, they're marketed heavily, they're marketed in a way that is going to be difficult to tell people, 'Look, it's a safe and effective drug, it works really well, but we don't want you to have it because it's too expensive,'" says John Jones, a former managed-care executive now on the faculty of the University of California Irvine School of Pharmacy and Pharmaceutical Sciences.
The drugmakers, for their part, say coverage needs to expand. Lilly declined to comment on the cost of its obesity medicine, which does not yet have FDA approval. "Many barriers in the healthcare system affect people living with this disease and their ability to access evidence-based treatment plans," the company said.
A guide from Aon for insurers looking to manage GLP-1 obesity drugs provides a window into how the industry will seek to keep costs down. Aon suggests that insurers require patients who receive GLP-1 drugs for obesity to first spend three months complying with a diet and exercise program. It also recommends that only certain doctors be allowed to prescribe the drugs, and that insurers require documentation of an eligible body-mass index and previous weight reduction efforts as a condition of authorization.
A spokesperson for Cigna Group $(CI)$, which owns a health insurer and a major pharmacy benefit manager, or PBM, said that plan sponsors are "rightfully cautious about covering new medications without robust clinical evidence," citing a "long, complicated history" with weight-loss drugs. In a separate statement, a spokesperson for CVS Caremark, CVS Health's $(CVS)$ PBM, said it was working with its customers to help manage costs. "We offer a variety of options for our customers who choose to include these drugs in their benefit plan with the goal of ensuring that coverage of these products is clinically appropriate and cost-effective," Caremark said.
Insurers will do what they can to manage costs, but success is not guaranteed. "It's entirely possible the premiums will rise considerably for everyone, if no solution is found for a deal on pricing," says Feldman of UC Law SF.
For Medicare, Medicaid, commercial plans, and the patients they cover, the long-term benefits of the obesity drugs might eventually balance out the costs. But until that tipping point comes, there will be only so many sandbags that can be thrown in the way of the tidal wave of demand.
Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com
To subscribe to Barron's, visit http://www.barrons.com/subscribe
(END) Dow Jones Newswires
September 22, 2023 21:30 ET (01:30 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
Comments