Patients Lose Access to Weight-Loss Drugs as Employers Stop Coverage
Mar 13, 2024
To rein in spending, employers
discontinue reimbursement or place limits on who is covered
Employers
that embraced paying for weight-loss drugs are now reckoning with the
high costs, forcing growing numbers to dial back or cut off their reimbursement
because they can’t afford it.
The
companies are putting in place restrictions such as limiting use to workers
with high body-mass indexes, or a $20,000 cap, while others have eliminated
coverage altogether. They can’t sustain the spending, they say, and question
whether the medications are reaching the right patients.
Jason Krynicki’s health
plan discontinued coverage of his Wegovy prescription Feb. 1, forcing him to tap into his retirement savings to pay
for the medicine.
Krynicki, a
bariatric-insurance coordinator in the RWJBarnabas Health system in New Jersey,
lost 47 pounds in less than a year from taking the drug. It cost him $25 a
month out of pocket before his coverage ended. Now, he says, his monthly tab
surpasses $1,000.
“It’s just not fair,” said
Krynicki, 41, a board member of the advocacy group Obesity Action Coalition.
His health plan’s drug-benefits manager rejected his appeal, he said.
RWJBarnabas Health stopped
covering the drugs for weight loss, but not diabetes, because a significant
percentage of employees were dropping use prematurely and gaining back weight
they had lost, a spokeswoman said.
Another factor: cost.
“RWJBarnabas Health is not alone in making this decision. Many employers have
terminated coverage for weight-loss medications,” the spokeswoman said.
Purdue
University limits coverage to employees with a BMI, or body-mass index, of at
least 30, or of at least 27 with another health condition. Workers must also
lose about 5% of their body weight after three months to continue usage.
Yet
use of the drugs for obesity and diabetes doubled between 2022 and 2023, and
the weight-loss therapies accounted for about 2% of the university’s total
health-plan spending last year, said Candace Shaffer, associate vice president
of benefits and payroll. The school is now considering adding restrictions, she
said.
One
option is requiring employees to get prescriptions from the employer
clinic—which also provides nutrition, wellness coaching and mental-health
counseling.
“Everyone
is learning as we go,” Shaffer said.
Weight-loss
drugs such as Wegovy and Zepbound are among the hottest prescriptions in the U.S., so
popular that makers Novo
Nordisk and Eli
Lilly can’t meet demand. But the drugs list for more than $1,000
a month.
Employers budgeted a 5.2% increase in health-plan budget costs for
2024 in part due to demand for the medicines, according to a recent survey from
health-benefits manager Mercer. The drugs had helped fuel an 8.4% bump in
employer pharmacy-benefit costs in 2023.
The
added spending is proving too much for some businesses.
The
Mayo Clinic added a lifetime cap of $20,000 in spending on these drugs
beginning Jan. 1, while North Carolina’s health plan for state employees
recently decided to eliminate reimbursement for GLP-1s for weight-loss
beginning in April.
North Carolina saw use of the drugs, which were initially approved
to treat diabetes, increase sevenfold since 2021. “Just in a very short period
of time, we’re going to spend more on this drug than we did cancer treatments
last year,” State Treasurer Dale Folwell said.
The
state looked at restricting who qualified for coverage, but then it wouldn’t
have gotten manufacturer rebates, Folwell said, and decided to drop
reimbursement altogether.
A Novo Nordisk spokeswoman said North Carolina’s decision to end
coverage was irresponsible, and said obesity and conditions that are related to
it drive up healthcare spending. Both Novo and Lilly urged broader coverage of
their drugs.
The
popularity—and effectiveness—of the medicines have put employers in a bind. They
want to add medicines that improve employees’ health—which could reduce
long-term spending—and could help recruitment and retention.
Yet the high prices, seemingly indefinite use and appropriateness
for some patients who might just want to shed a few pounds has given employers
pause.
Rosa
Novo, the administrative employee-benefits director for Miami-Dade County
Public Schools, wants to add coverage to the district’s plan next year but is
trying to figure out how to afford it.
Novo
said she is hoping the right combination of rebates from manufacturers and
criteria for employees like prior authorization could provide a solution. The
school district is projected to spend $441 million on its annual health plan.
She said she hasn’t been able to estimate how much coverage would
cost.
“We
want to be cautious,” she said.
Source: Wall Street Journal