Sun, Feb-18-24, 14:27
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Senior Member
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Plan: Atkins-ish (hypoglycemia)
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BF:
Progress: 50%
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I thought sure I'd read something on here about NC employees being denied weight loss drugs, but this seemed like the most likely place to put another article on that topic. (can't find the old article now - please move if this is not an appropriate place for it)
Quote:
Healthcare
2 major employers said they stopped paying for weight-loss drugs like Wegovy after the drugmaker threatened to penalize them
Shelby Livingston
Feb 16, 2024, 9:47 AM EST
There's a little-known reason more companies aren't paying for their workers' weight-loss shots.
Sure, the drugs cost a lot. For many employers, paying for the $1,000-a-month shots for the vast numbers of workers with obesity or overweight could put them out of business.
But there's something else standing in the way: Novo Nordisk, the maker of wildly popular weight-loss shots like Wegovy, is penalizing employers for trying to limit use of the drugs, even a little bit.
It’s a dilemma that's forced at least two frustrated employers in Texas and North Carolina to scrap weight-loss drug coverage altogether, leaving workers who need obesity treatment to foot the bill themselves or go without.
Employers hire middlemen called pharmacy benefit managers (PBMs) to negotiate drug discounts, called rebates, from pharmaceutical companies. In exchange for the discounts, PBMs agree to cover those drugs. Wegovy, which has a list price of $1,350 a month, can fetch deep discounts of up to 50%. But even at a reduced price, weight-loss drugs are budget-busting, so employers have tried to make them tougher to get.
Now, some employers and health plans said they were warned they have to pay for the drugs for all eligible people or they’ll lose those important discounts they rely on to make the drugs cheaper in the first place.
Health plans in North Carolina and Texas faced the loss of drug discounts
Take North Carolina’s insurance plan for state employees. The state health plan’s costs for weight-loss drugs like Wegovy, known as GLP-1s, skyrocketed to more than $100 million in 2023 from about $34 million in 2021 after about 25,000 employees filled prescriptions.
Unable to afford that bill without huge premium increases, plan officials rushed to find a way to stop the bleeding. They came up with a few options. The plan could restrict the shots to only people with the most severe obesity. Or it could require patients to try a cheaper weight-loss drug before resorting to more expensive options. It also considered requiring patients to see a doctor board-certified in obesity medicine if they wanted a weight-loss shot.
However, according to plan officials, the state health plan’s PBM, CVS Caremark, said it would lose tens of millions of dollars in discounts from Novo Nordisk if it implemented any of these strategies.
Plan officials said that losing those discounts would raise the price of Wegovy and wipe out a big chunk of the savings North Carolina hoped to realize by limiting use.
Sam Watts, the state health plan's administrator, said during a board meeting on January 25 that Novo Nordisk and its contracts with CVS "are preventing us from providing access to members who need it most."
Out of options, the state health plan threw in the towel and voted to end coverage of weight-loss drugs for all workers, starting April 1.
A similar situation occurred in Texas last year. The University of Texas System, facing a bill of more than $5 million a month for its workers’ weight-loss drugs, explored saving some money by paying only for people already on the drugs. It would exclude coverage for new users. But it was told by Novo Nordisk and its PBM, Express Scripts, that it would lose discounts for weight-loss drugs, including for the workers still using them, draining much of the cost savings, a UT System benefits leader confirmed to Business
UT System ended all coverage for GLP-1 weight-loss drugs in September 2023.
Novo Nordisk has little reason to play ball with employers
Managing workers’ use of prescription drugs is a foundational part of what PBMs do. If employers can’t get creative by adding prior authorization requirements or other restrictions to reduce costs, most won’t be able to afford covering drugs like Wegovy, said Chris Brown, an independent pharmacy benefit consultant.
A spokesperson for Novo Nordisk said it was “irresponsible” to deny patients insurance coverage for obesity treatment. The drugmaker “strongly opposes creating new hurdles for patient access to care” and continues to work with North Carolina’s state health plan and its PBM to address concerns about cost, the spokesperson said.
Still, Novo Nordisk doesn’t have much reason to play nice with employers. It doesn’t need their business, at least for now, since it’s selling weight-loss shots faster than it can make them. The drugmaker’s sales for GLP-1s like Ozempic and Wegovy soared 52% in 2023 to about $18 billion.
The PBMs CVS and Express Scripts provided statements blaming Novo Nordisk for high drug prices. They said they aim to get lower prices or help employers better predict their costs.
“Monopolistic price-gouging by some drug manufacturers has unfairly forced employers and other health plan sponsors to make difficult decisions about whether to cover GLP-1s,” an Express Scripts spokesperson said.
“Drug manufacturers need to stop dragging their feet and agree to offer their medicines at a fair price to North Carolina’s public servants,” a CVS spokesperson said.
He added that CVS collects rebates from drugmakers when coverage for a drug meets certain terms and conditions, and it passes along all rebates it gets to North Carolina’s state health plan.
But Brown, the consultant, said he wonders just how hard the PBMs are fighting for their clients. PBMs make money by pocketing a cut of the rebates and other money they negotiate before passing that money along to employers — and they’ve faced much scrutiny for this.
He said it’s possible that to get those rebates and secure their cut, the PBMs agreed to contracts with Novo Nordisk that limited their ability to help employers manage the use of weight-loss drugs without forfeiting discounts. He’s seen this play out in PBM negotiations over other drugs.
“It’s hard to defend as a pharmacy benefit manager because it's antithetical to what they say their business is,” Brown said. “But it makes a heck of a lot of sense if you're trying to drive rebates.”
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https://www.businessinsider.com/weg...%2018,%20202 4
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