Thin Budgets by Ozempic: Can the US afford new “miracle” weight loss drugs?

Peter Rentzepis, BA 

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​We’re living in GLP-1’s world now. Across the country – from TV to social media to doctor’s offices – the clamor for these new weight loss drugs is deafening, and for good reason. In the seminal STEP trials for semaglutide (brand name: Ozempic/Wegovy) and SURMOUNT trials for combined GLP-1/GIP agonist Tirzepatide (brand name: Mounjaro/Zepbound), the highest doses conferred average weight loss of ~10%-20% for up to two years in those with obesity.

​The Scope of Overweight and Obesity in the US
According to the most recent National Health and Nutrition Examination Survey (NHANES), 42.4% of US adults have obesity (BMI≥30), which translates to ~110 million people using 2020 US Census data. The benefit of GLP-1s likely extends further considering that they have had drastic effects in people with BMIs down to ≥27.
Costly Considerations
Given the overwhelmingly positive results and media coverage of GLP-1s, demand is up and stock is hard to come by. This comes despite eye-popping costs; per the manufacturers’ websites, monthly list prices for GLP-1s average around $1,100 for Mounjaro/Zepbound and Ozempic/Wegovy.
Fortunately, the patient rarely pays the list price due to insurer/manufacturer negotiations and insurance coverage. However, even after discounts negotiated within this system, the net price (i.e., the actual “cost to the system”) of these therapies remains staggeringly high, estimated between ~$8,000-$14,000 per year for Wegovy.
Underlying these trends is the concern (which has come up in both academic studies and national news media) that high prices will exacerbate existing health disparities among those who are more likely to have overweight/obesity (Black and Latino Americans; those with less education), as well as those of lower socioeconomic status who are more likely to have high deductible health plans, high co-pays/co-insurance, and/or catastrophic coverage only.
Balancing the Scale: Outcomes vs Price
Beyond weight loss alone, GLP-1s could reduce the risk of a host of conditions, including cardiovascular disease, chronic kidney disease, nonalcoholic fatty liver disease, and type 2 diabetes. However, with their inflated cost, can the US healthcare system afford these therapies?
Cost-effectiveness models have been mixed, with industry-associated papers suggesting the medications are well-priced for the expected net benefit in the long-term (given these medications can be lifelong), while independent reviews suggest it’s too expensive. Regardless, the scale of the obesity epidemic suggests that these medications could bankrupt US healthcare system in the short-term, costing up to $1 trillion/year (2022 total drug spending in the US was $405.9 billion).
Where Are We Now?
The cost dilemma of these therapies is already making waves, even with patient uptake in its infancy. Some private insurers are limiting spending while others pulling coverage completely due to increasing costs. In the public sector, Medicare only covers the drugs for those with previous cardiovascular disease, while several Medicaid programs cover it for broader populations. But between mounting clinical evidence and political/public initiatives, it may become harder to deny insurance coverage of these medications.
So what should we do? Some potential paths forward include allowing Medicare to negotiate on weight loss drugs (i.e., adding a special case to the Inflation Reduction Act), letting market competition eventually drive prices down (there are 70+ obesity drugs in the current pharma pipeline), or looking to other countries’ drug pricing models for sustainable renovation of our system (the US price for Ozempic is >2x higher than any other country).
Regardless of the short-term fix, the most important step is to address the stigma, disparities, and capitalistic food industry that underpin the obesity epidemic. In doing so, we can get at the root cause and – hopefully – reduce the need for these medications in the first place.

Author

Peter Rentzepis is a fourth year medical student at Harvard Medical School applying to internal medicine residencies. He has worked as a medical writer, phlebotomist, and AmeriCorps Member. He previously attended Pomona College, where he studied chemistry and computer science. In his free time, he enjoys running, reading, and watching soccer.