HOW ARE OZEMPIC AND WEGOVY COVERED BY INSURANCE CARRIERS AND HOW DO THEY AFFECT THE HEALTH PLAN?
It is probably not news to you that there are some drugs on the market that have recently been discovered to have an alternate impact than originally intended. Semaglutide (marketed under brand names Ozempic and Wegovy) was initially intended to help with diabetes management, but it has also been shown to help with weight loss, which in turn, can lower cardiovascular risk due to decreasing a person’s Body Mass Index (BMI).
Ozempic was originally designed to help patients manage their Type 2 diabetes and lower the risk of heart attack, stroke, and heart-related death in those with heart disease and Type 2 diabetes. It is a GLP-1 (glucagon-like peptide-1 agonist) that works to improve glycemic control. By lowering blood sugar, the pancreas is prompted to release more insulin and the liver is told to stop releasing more sugar, which slows digestion.
Wegovy is also a GLP-1 that acts as a natural hormone in your body to tell your brain to regulate your appetite, therefore, helping you feel fuller faster to manage your weight. It contains the same active ingredient as Ozempic and both are administered as weekly injections under the skin, but the dosage for Ozempic is lower than the dosage for Wegovy.
Who doesn’t want to reduce their body weight? But at what cost?
Now let’s look at the cost associated with these drugs.
Most health insurance carriers will cover Ozempic as a drug used to treat Type 2 diabetes. Because there is no generic alternative to this medication, it falls in the “Preferred Brand” category on drug formularies and is covered in a more expensive tier than “generics” or “preferred generics.” Regardless of the platform your health plan is built upon (fully insured, level-funded, or a true self-funded health plan) you likely have a formulary drug list that determines exactly how these drugs are covered as well as determining the costs for the member receiving the prescription.
Let's take 3 common examples for comparison. United Healthcare covers Ozempic under their Essential Drug Plan as a Tier 3 medication – meaning there are limitations, it requires prior authorization, step therapy is also required, and there are quantity limits in place. But on United Healthcare’s Advantage Drug Plan, it is covered as a Tier 2 medication, which can sometimes mean a much lower copay from the member. Meanwhile, Aetna also covers Ozempic in the “preferred brand” tier on their drug Advanced Contro Plan drug formulary. Similarly to United Healthcare, Aetna also requires prior authorization and has a quantity limit in place for this medication to ensure it is being used to treat Type 2 diabetes. Similarly, Blue Cross Blue Shield of Texas does not cover Ozempic unless there is a preauthorization on file from the physician and the medication is being used to treat Type 2 diabetes.
However, employers on a self-funded plan often have more control over their pharmacy benefits and can dictate which coverage tier they want to impose as well as whether they want the drug to be limited only to diabetic treatment or allow for expanded usage under weight loss treatments.
Wegovy is not covered as a weight loss medication yet by most insurance carriers. If it is covered, it is only on the drug formulary for a select group of medical plans. So, you will most likely need to pay in cash. Welcome Prescription Discount Programs to the group chat! Drug savings programs like Good Rx and Clever Rx allow you to compare prices at various pharmacies and provide coupons to help you pay less than the cash price for a prescription without going through your insurance plan.
When looking at Good Rx and Clever Rx, using a Dallas, Texas zip code, the cost for the Ozempic pen at 0.25 or 0.5 mg/dose; 3ml of 2mg/3ml ranges from $943 to $1,037 monthly. The cost of the Wegovy pen at 0.75ml of 2.4mg/0.75ml ranges from $1,310 to $1,498 monthly. And remember, this is USING the discount coupon from the pharmacy discount vendor. Kroger, Walmart, and Costco were among the more expensive pharmacies, while local non-chain pharmacies seemed to be on the cheaper end for both Ozempic and Wegovy.
Even though there is no purely compounded version of Ozempic or Wegovy, you have the option of using a compound pharmacy to get something similar. Rates at these locations vary between $450-$650 per month for compounded Semaglutide with NAD+ (Nicotinamide Adenine Dinucleotide).
Regardless of which GLP-1 medication your employees are taking, there is also an avenue for them to save money by applying for the Manufacturer's Patient Assistance Program (PAP). These programs are aimed at both the insured members who either have a high dollar copay for these drugs, or whose plans exclude the drugs from their covered drug lists. We use the resources over at Needymeds.org to help guide our clients through this process.
How do these drugs affect your health plan?
Many employers have chosen not to cover these drugs as part of their company health plan when used as a weight loss drug because the increased claims cost is just too high. Even with a lifetime maximum dollar amount built into the plan design for these specific brand-name drugs, there is still an increase in annual total claim liability for the company, which significantly impacts self-funded employers. It was previously assumed that Semaglutide would be cost-effective for plan payers by preventing complications of obesity and decreasing medical costs. The hope was the cost of claims related to the incidence of cardiovascular disease and obesity prevalence would decrease by having these weight loss drugs covered as part of the health plan, but it has been shown that is not the case.
The cost associated with including these GLP-1s on the health plan to reduce obesity actually did the opposite: it led to an increased claims liability for the employer and insurance companies. A study done in 2022 by the Institute for Clinical and Economic Review found that the cost associated with cardiovascular risks does not decrease with the inclusion of GLP-1s in a drug formulary when used for weight loss (as initially thought). Yes – by reducing obesity, there is a correlation to the reduction in the prevalence of cardiovascular disease – but there is still not enough cost-effectiveness for it to make sense for employers and insurance companies to cover medications like Semaglutide when used for weight-loss purposes.
Currently, these drugs cost between $12,000 to $18,000 annually. For there to be cost-effectiveness in saving money on claims related to cardiovascular disease, these drugs for weight loss should be priced at $7,500 to $9,800 annually. Prescription costs are always on the rise, so it is unlikely this price drop will ever happen. The reduction of cardiovascular disease does not decrease medical claims to the point where it is more financially beneficial to include the GLP-1s on the drug formularies because the claims resulting from the medication alone are higher than the claims related to cardiovascular treatments.
Medical and pharmacy claims have a direct impact on the cost of a healthcare plan. As the claims increase, so do monthly premiums when it comes time for the company’s annual benefits renewal. If the cost of premiums goes up from the insurance carrier, either the employer will be responsible for that increased cost or that excess dollar amount may be passed down to the employee through payroll deductions. Because neither of these scenarios seems appealing, it is presumed that it is more cost-effective for health insurance companies, employers, and employees to not have these types of medications included in the covered drug lists.
Before you begin any medical treatment for weight loss, it is important to talk with your provider about your individual health history to ensure that there are no serious risks. Because Wegovy is given in higher doses than Ozempic, there are more side effects due to the increased dosage. Semaglutide works by shrinking fat cells, but it simultaneously multiplies the number of fat cells you have – so it is probable that you will need to use the medication as a life-long therapy to prevent weight gain in the future – unless you have a significant lifestyle change. You are also likely to lose muscle mass and connective tissue, as well as bone density, because you are shrinking fat cells, so some patients have what is commonly referred to as “Ozempic face” – when wrinkles and loose skin become more noticeable.
Some side effects are still unknown due to the recent prevalence of the medication used for weight loss. The side effects that are known include nausea, vomiting, diarrhea, headache, dizziness, compaction in the gastrointestinal tract, and other GI-related symptoms like acid reflux, bloating, etc. There is also a risk for pregnant women, as there could be side effects for the baby as weight loss for the mother is not promoted during gestation.
Ideally, patients who use this medication as a form of obesity management will accompany their weight loss with a significant lifestyle change and participate in a weight loss management program with their doctor or a nutritionist. More information can be found at the links below regarding these two medications and their impact and effects.
References:
- https://www.ozempic.com/
- https://www.wegovy.com/
- https://www.goodrx.com/
- https://cleverrx.com/generous
- https://icer.org/assessment/obesity-management-2022/
- “The Real Truth Behind Weight-Loss Medications” – Good Shepherd Health Webinar from 11/2/2023
- HaloScrips (Phil Baker and Michell Zulu, PharmDs)
- Ben Bohonowicz (EBS of MD)
