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The recent expansion of Novo Nordisk A/S’s (NYSE:NVO) Wegovy’s (semaglutide) FDA approval has sparked a debate over insurance coverage for the drug.
However, despite its potential health benefits, some employers and health plans remain hesitant to cover the drug due to its high monthly price of $1,350 and uncertainties regarding patient adherence.
This expansion allows for a cost cap or savings guarantee, fostering accessibility for deserving patients.
Citing John Crable, Senior Vice President of Corporate Synergies, CNBC noted that the growing benefits associated with weight loss drugs may increase pressure on insurers to include them in standard insurance plans.
However, convincing insurers to do so may require more evidence of long-term efficacy and cost-effectiveness.
While approximately 50 million insured American adults have coverage for weight loss drugs, coverage for GLP-1s remains inconsistent across different insurance plans.
Despite potential long-term cost savings and improved health outcomes associated with covering weight loss drugs, some employers, like North Carolina’s state plan, are scaling back coverage due to financial concerns.
North Carolina Treasurer Dale Folwell highlighted the state’s financial strain caused by covering Wegovy, which amounted to nearly $87 million last year.
CNBC noted that Novo Nordisk says its savings program can help patients without insurance coverage save up to $500 per 28-day supply of Wegovy.
The company also said roughly 80% of Wegovy patients in the U.S. with commercial coverage for the drug are paying $25 per month or less.
To address concerns over rising costs, some insurers are implementing cost control measures, such as spending caps and limits on annual spending increases for weight loss drugs.
Earlier this month, Evernorth Health Services, a subsidiary of Cigna Group (NYSE:CI), introduced a financial guarantee in its EncircleRx program.
The move aims to provide clients with predictability when covering GLP-1s, ultimately empowering companies and health plans to exercise better control over their expenditures.
According to a report in October 2023, coverage for obesity medications, including Wegovy, is expected to expand among U.S. employers.
The survey indicates a growing willingness among employers to include GLP-1 drugs like Wegovy in their health coverage plans amid rising healthcare costs associated with the increased popularity of such weight-loss treatments.
Price Action: NVO shares are up 0.76% at $133.37 on the last check Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo Vlad Deep for Unsplash
