The problem is acute: Powerful but expensive new drugs could help many of these people 100 million American adults Those who have obesity and obesity are a serious public health concern.
But how can the country afford lifesaving treatment for so many people, when sticker prices for each patient range from about $900 to $1,300 every four weeks?
Some researchers, such as Dr. Walter C. Willett, professor of epidemiology and nutrition at the Harvard T.H. Chan School of Public Health, have warned that the drugs could increase the nation’s health care spending by 50 percent.
“You can see this balloon is completely out of control,” he said.
But one factor is often left out of these discussions: List prices of drugs are typically very different from the net prices that companies receive after making secret deals with health insurers or middlemen known as pharmacy benefit managers. . Companies generally do not disclose net prices, but there are data sources that can be used to estimate them.
a recent paper A report published by the American Enterprise Institute showed that the net prices of new obesity drugs are a fraction of the published annual list prices.
And while drug prices remain out of reach for many, economists predict they will soon be brought down. More than a dozen companies are developing obesity drugs. As they enter the market, more alternatives are expected to drive down prices, as has happened with other expensive drugs.
“My prediction is that as competition increases, prices will decrease accordingly,” said Jalpa Doshi, professor of medicine and director of the Economics Evaluation Unit at the University of Pennsylvania.
Strong demand, falling prices?
At the moment, manufacturers are taking advantage of the increasing demand.
Investors have expectations from Novo NordiskThe maker of Wegovi, will generate $4 billion in revenue this year. The company’s other drug, Ozempic, hopefully To bring in 11 billion dollars. Medicines are achieving so much that they account for almost all of the latest economic growth in Denmark, home of Novo Nordisk.
Those revenues are based on net prices.
for their analysisBenedick N., an economist at the American Enterprise Institute. Ippolito and Joseph F., a health economist at the Johns Hopkins Bloomberg School of Public Health. Levy relied on data from SSR Health, which uses company financial filings and estimates of the numbers. Prescriptions were filled.
Economists derived net prices using data from SSR Health for the second quarter of 2022 to the first quarter of 2023. The exception is Monjaro, made by Eli Lilly, for which data were available only for the first quarter of 2023.
The net price, revenue divided by the number of prescriptions in their analysis, appears to be about $700 every four weeks for Wegovi, or about $650 less than the list price; About $300 for Ozempic, or about $650 less than list price; And about $215 for Monjaro, or about $800 less than its list price.
This means Wegovi’s net worth is about half its list price, Ozempic’s is about two-thirds less and Monjaro’s net worth is about 80 percent less than its list price.
Dr. Ippolito cautioned that because prices and prescriptions fluctuate, these figures may change over time, but he added that “these estimates give a good sense for the potential amount that many insurers will pay and Give a good sense for the amount of discounting going on.” ,
Pragya Kakani, an economist at Weill Cornell Medical College, analyzed similar data with similar results, but was not involved in Dr. Ippolito and Dr. Levy’s research.
Craig Garthwaite, a health care economist at Northwestern University, is particularly concerned about the net prices of Ozempic and Monjaro. Both are approved for people with diabetes, but they also lead to weight loss. Vegovi, a similar drug to Ozempic, is approved for weight loss. But the price of Ozempic is much lower than the price of Wegovi.
This may be because Ozempic has a direct competitor in Monjaro.
But Amitabh Chandra, a health care economist at Harvard, said that even Wegovi, which has the market share of new obesity drugs so far, has an unexpectedly low net price.
“One might have naively thought that these are new drugs that are in high demand, so the rebates would be very low or zero,” said Dr. Chandra.
“I was surprised by the extent of the exemption,” he said.
a price we’ve already paid
Experts say a question looms: What does weight loss mean for patients and society?
Obesity in itself is costly because it increases the risk of costly diseases like diabetes and heart disease. One study found that obesity was linked With $1,861 additional annual health costs per capita, the annual additional cost is $172.74 billion.
The Institute for Clinical and Economic Review, an influential nonprofit group, asked about a year ago whether new weight-loss drugs are cost-effective, meaning in terms of improved quality of life, longer lives, and benefits to society. Their value exceeds their cost.
vegovi, The group reported, was not cost-effective. But the institute relied on an early and less accurate estimate of the drug’s net price.
When AEI research showed Wegovi’s estimated net price, the group’s chief medical officer, Dr. David M. Rind, said that if the calculations were correct, Wegovi was cost-effective but “there are still major budget challenges.”
Harvard’s Dr. Willett said in an interview: “I don’t think anyone can predict exactly where this will go because competition may drive down prices, and the uptake is still not clear, but the potential costs are can be more than just a thing.” have seen.”
Still, the hope is that reducing obesity will reduce costly health problems related to obesity, including type 2 diabetes.
Diabetes can not only lead to kidney failure, blindness, and amputation, but it also doubles the risk of heart attack and stroke.
Patients may also find relief from the extreme social stigma and self-loathing that often accompanies obesity.
Until recently, the idea that treating obesity would reduce obesity-related health risks was based on anecdotes and correlations, not cause and effect.
again in August Novo Nordisk announced Results of a large study showed that Vegovi could reduce the risk of heart attack, stroke, hospitalization for heart failure, and death from heart disease by 20 percent.
That result changes the picture, Dr. Garthwaite said.
Some insurers do not cover drugs like Wegovi and may view obesity drugs as vanity drugs. In response, some patients are suing their insurers.
With no cardiovascular benefits, he said, the argument for not covering the drugs is “out the window.”
Costs we can’t all afford
Although the net prices of drugs may be lower than expected, they remain too expensive for many potential patients.
For example, people on Medicare have no insurance coverage for Wegovi because Medicare is prevented by law from covering weight loss medications. Some state Medicaid programs cover the drug.,
And while Novo Nordisk says 80 percent of private insurers cover Wegovi, the drug is not affordable for all insured patients.
Katherine Backer, a health economist, provost at the University of Chicago and Eli Lilly board member, said cheap health insurance involves co-payments and deductibles that often put Wegovi out of reach. Patients with low-premium plans offered through the Affordable Care Act would similarly be priced out.
Dr. Scott Ramsey, a health economist at the Fred Hutchinson Cancer Center, worries that poor patients, those who are uninsured or whose insurance requires high co-payments, will continue to look to wealthier patients for access to the drugs.
“We spent 15 years talking about the rising costs of obesity to the health care system,” said Dr. Garthwaite, the Northwestern economist. But along the way to cut that cost, he said the attitude of some insurers seems to be, “We don’t want you to come up with a solution that costs money.”
waves and peaks
Health economists predict relief should come soon, as companies race to develop their own drugs. Prices may go down due to competition.
For example, this happened with drugs for hepatitis C. The cost of introducing an effective treatment for liver disease was $84,000, resulting in serious warning This cost would be equal to “total spending on all drugs in the United States.”
The list price of hepatitis C treatment has dropped. Competitors entered the market, Pharmacy benefit managers, who negotiate with drug manufacturers, received greater profits due to competition among the companies. Net prices fell accordingly.
A similar scenario could play out with Wegovi, which is “riding the wave of having no direct competition,” Dr Doshi said. But that status will soon end.
A version of Monjaro, authored by Eli Lilly, is expected to be approved for obesity this year – for example, the potential for insurers to agree to cover Vegovi if its price is lowered sufficiently. A possibility, but not to Mounjaro.
Dr. Ippolito associates it with Over 70 Obesity Medicines In development, he expected competition would only increase.
Right now, even though drug prices are likely to peak, Dr. Chandra, a Harvard health care economist, argued that expanding access to drugs is essential, even if it comes at a cost to society.
The purpose of health insurance, he said, is not to save money but to “improve quality of life, happiness and self-esteem.”