Some Medicare members could get help paying for the popular new weight-loss drug Wegovy—as long as they have a history of heart disease and are using it to prevent recurring heart attacks and strokes.
Medicare Part D drug-benefit plans—which are administered by private insurers—may cover anti-obesity medications if the drugs receive approval for an additional use that is considered medically accepted under federal law, the Centers for Medicare and Medicaid Services told The Wall Street Journal on Thursday.
Medicare is the federally funded health-insurance program for people who are 65 years and older, or who have a disability or certain medical conditions. The new guidance cracks open Medicare reimbursement of the popular obesity drugs, potentially paving the way for thousands of new people getting prescriptions and for billions of dollars in additional spending on them.
It could also add to the pressure on commercial health plans to cover the drugs.
Many people have pushed Medicare and commercial health plans to provide coverage. But U.S. law has prevented Medicare Part D plans from paying for obesity medicines, while some commercial plans have resisted adding reimbursement and others are restricting coverage due to the heavy costs.
CMS’s new guidance applies to Novo Nordisk’s Wegovy because the Food and Drug Administration this month approved a new use: to reduce the risk of heart attacks and strokes in people with a history of cardiovascular disease, and who have a body-mass index above a certain threshold. A study showed Wegovy decreased cardiovascular risk by about 20% versus a placebo.
Because Medicare has been barred from covering obesity drugs, people in Part D plans— mostly senior citizens—have had to pay out-of-pocket to use Wegovy, though Medicare will cover other weight-loss treatments like bariatric surgery.
Wegovy has a list price of more than $1,300 a month.
Part D plans might decide to offer coverage of Wegovy for reducing cardiovascular risk as a selling point during open enrollment this fall, for plans that take effect in 2025, said Juliette Cubanski, deputy director of the program on Medicare policy at KFF, a nonprofit health-policy organization.
But the Part D plans would have to balance that selling point against incurring the heavy additional costs that could result.
Nearly 10 million Medicare beneficiaries have obesity, according to an analysis published last year in the New England Journal of Medicine. Paying for just a tenth of eligible members to get Wegovy could increase total Part D spending by $26.8 billion, or more than 18% of its annual payments, the analysis estimated.
The increased spending could lead to higher premiums for members of Part D plans, Cubanski said.
Drugmakers have lobbied Congress to change the law to allow broad coverage of drugs like Wegovy for weight loss, but legislation aimed at expanding coverage hasn’t been enacted.
Wegovy was initially cleared by the FDA in 2021 to reduce excess weight and maintain long-term weight reduction.
CMS said it notified health plans on Wednesday of the coverage clarification.
The agency’s guidance could boost Wegovy sales for the drug’s maker, Novo Nordisk. It could also pave the way for broader coverage if Wegovy and other weight-loss drugs including Eli Lilly’s Zepbound are proven to provide additional health benefits beyond weight loss.
The companies are studying the drugs for uses ranging from sleep apnea to Alzheimer’s disease.
CMS said anti-obesity medications still aren’t eligible for Part D coverage if they are used for weight loss alone. For Wegovy, that means people who don’t have established cardiovascular disease wouldn’t be eligible for coverage, unless a plan offers that as a supplemental benefit.
The agency’s guidance also wouldn’t change coverage for drugs that have the same main ingredients as Wegovy and Zepbound—the drugs Ozempic and Mounjaro—but are approved for Type 2 diabetes, not weight loss. Many Part D plans already cover Ozempic and Mounjaro for diabetes.
CMS said Part D plans are allowed to require advance approval—known as prior authorization—for anti-obesity drugs to ensure they are being used for a medically accepted purpose under federal law.
Write to Peter Loftus at [email protected]