By Éléonore Laise
A decades-old law banning coverage could leave room to expand access, some experts say.
Medicare’s decades-old exclusion of coverage for weight-loss drugs is coming under scrutiny amid growing evidence that Wegovy and similar drugs have health benefits that extend well into the beyond weight loss.
With billions of dollars in federal spending and drug company revenue at stake, drugmakers and lawmakers are amplifying calls for Medicare to expand access to obesity drugs. Last week, the American Medical Association, the nation’s largest doctors’ group, adopted a policy supporting broad parity of health insurance coverage for obesity treatments, saying it would incentivize insurers to provide coverage for approved weight-loss medications, including GLP-1 medications like Wegovy. .
Novo Nordisk (NVO) and Eli Lilly & Co. (LLY), the two powerhouses in the diabetes and obesity drug market, have stepped up their lobbying spending this year amid growing interest in drug coverage Medicare weight loss products. Novo Nordisk spent more than $3.6 million lobbying on obesity drug coverage issues and other topics in the first nine months of this year, its highest total for the first three quarters of a calendar year in data going back 20 years, according to OpenSecrets, a nonprofit research group. Eli Lilly spent more than $5.8 million on lobbying during the first three quarters of this year, its highest total for the first nine months of a calendar year since 2014, according to OpenSecrets.
Under a 20-year-old law, passed at a time when the diet drug debacles of the late 1990s were a recent memory, drugs prescribed for weight loss are not covered under Part D Medicare prescription drugs. That means Medicare covers Novo Nordisk’s Ozempic, which is approved for treating diabetes, but not the Danish drugmaker’s Wegovy, which contains the same active ingredient but is approved for treating obesity.
Rapid obesity drug developments this fall, including new data on Wegovy’s potential to reduce the risk of heart attacks and strokes and the U.S. Food and Drug Administration’s approval of Eli Lilly’s obesity drug Zepbound are ramping up political pressure to expand Medicare coverage. drugs, analysts say.
Any changes in Medicare drug coverage could have big implications for the 50 million people enrolled in Part D drug plans as well as Wall Street’s forecasts for growth in the obesity drug market . Expanded Medicare coverage would also likely lead to more coverage in commercial health plans, analysts say.
A bill that would allow Medicare to cover weight-loss drugs, the Treat and Reduction Obesity Act, has gained some bipartisan support but still faces hurdles as Congress deals with other much-needed legislation this year — and it is unlikely to be at the top of the to-do list in the coming election year, political analysts say.
Kim Monk, a partner at policy research firm Capital Alpha Partners, views the bill as the most likely path to expanding Medicare drug coverage. But right now, she said, “the Hill is preoccupied with the challenge of keeping the lights on.” And later, “Medicare has a looming solvency problem,” Monk said. “Congress needs to address this, and it will be difficult to do anything that significantly increases Medicare spending without thinking or talking about what they are doing on the solvency front.”
The Congressional Budget Office has not yet produced an estimate of the bill’s budgetary impact. But in an October blog post, the agency said that Medicare coverage of weight-loss drugs at their current prices, after accounting for discounts and rebates, would increase overall federal spending. The CBO called for more research into factors affecting the use of these medications and their long-term impact on patients’ use of other medical services.
Based on the U.S. Centers for Disease Control and Prevention’s estimate that 41.5% of U.S. adults ages 60 and older have obesity, and assuming that only 10% of eligible Medicare beneficiaries are treated, Medicare could spend about $26.8 billion annually on Wegovy, according to a study published earlier this year in the New England Journal of Medicine.
However, some researchers say expanding Medicare coverage wouldn’t necessarily be a financial disaster for the program, as the treatment could help offset other health care costs. Reducing obesity rates would also reduce heart disease and diabetes, and Medicare coverage of weight-loss drugs could save the program up to $245 billion over the first 10 years, according to an analysis earlier this year by the Schaeffer Center for Health at the University of Southern California. Politics and economics. Most of the savings would come from reduced hospital and skilled nursing care, the researchers found.
Today, some industry players are promoting the idea that federal regulators could expand Medicare coverage of new obesity drugs even without congressional action. Pfizer Inc. (PFE), which is developing its own obesity drug, commissioned a report released in September by the law firm Manatt, Phelps & Phillips LLP, saying the Centers for Medicare and Medicaid Services could take the position under which anti-obesity medications are legally distinct from “weight loss” medications excluded from coverage under the law. According to the report, CMS’s interpretation of the law “should be viewed as a policy choice and not a statutory mandate.”
Part of the problem, according to the report, is that the regulator characterizes obesity almost exclusively in terms of weight and views new anti-obesity drugs as simply weight-loss drugs, without taking into account the many metabolic complications of obesity, such as high blood pressure and heart disease. .
In a statement to MarketWatch, a CMS spokesperson did not respond to questions about its characterization of obesity and whether it might revise its interpretation of the law. Plan sponsors can offer weight-loss drug coverage as an added benefit in enhanced Part D alternative plans, the CMS spokesperson said. In practice, this benefit is not widely offered, experts say. Medicare also offers dietary assessments and behavioral therapy to promote weight loss through diet and exercise under Part B, which covers doctor visits and other outpatient care, said the spokesperson.
CMS may have the regulatory flexibility to change the Part D weight-loss drug coverage exclusion, but given the impact this change could have on Medicare’s financial situation, “it would be a very difficult road for them” , Monk said.
But if CMS were to provide more coverage flexibility through regulatory measures, it could also pave the way for legislative changes in the future, said Michael Kolber, a partner at Manatt Health and co-author of the report, because it would allow to further expand coverage in less expensive Congress.
At least one other key federal agency is already rethinking its approach to weight-loss drugs: the FDA. By the end of this year, the agency plans to issue revised guidelines on drug development for chronic weight management – guidelines that were last updated in 2007. “Obesity is a very important public health problem, and there has been much new “information about this disease, its complications, and its treatment since the latest guidance was issued,” the FDA said in a statement to MarketWatch. The FDA is in revising its guidance, the agency said, “to ensure it reflects current thinking on drug development in this important area.”
The FDA’s updated guidance, according to the Manatt report, could help demonstrate to CMS that the latest generation of anti-obesity drugs are much more than “weight loss” drugs.
“The clinical community recognizes obesity as a disease, and CMS and FDA are somewhat outliers in how they address this therapeutic area,” Kolber said. “When you conceptualize obesity as a disease with many causes and consequences, it makes sense to say that these drugs treat this disease and are not just weight loss agents,” he said.
Some drugmakers are also pursuing research that could ultimately expand the labels of weight-loss drugs to treat other conditions, paving the way for circumventing Medicare coverage restrictions. Lilly is studying tirzepatide, the active ingredient in Zepbound and Mounjaro, in cardiovascular disease, obstructive sleep apnea and other conditions. But “it is too early to comment on prospects for additional reimbursement,” Lilly said in a statement to MarketWatch.
Novo Nordisk said in a statement to MarketWatch that the company “continues to evaluate Part D coverage options in the cardiovascular therapeutic area,” highlighting its recently released Wegovy cardiovascular outcomes data as an important development for patients with serious chronic illnesses.
-Éléonore Laise
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20/11/23 1226ET
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