Medicare spending on Ozempic and other GLP-1s is skyrocketing | KFF

GLP-1 drugs such as Ozempic, Wegovy, and Mounjaro were initially developed to treat type 2 diabetes, but their effectiveness as anti-obesity drugs has generated great excitement and demand among people who have struggled to lose weight. weight by other means. These drugs are also being tested to treat other conditions, and the FDA just approved a new use of Wegovy to reduce the risk of adverse cardiovascular events. But the annual cost of these drugs in the United States more than $11,000 at recent list prices, although net prices may be lower with rebates negotiated by pharmacy benefit managers has raised concerns about the fiscal impact of the broad coverage of GLP-1 drugs to Medicare, other health insurers and patients.

Current law prohibits Medicare from covering drugs used for weight loss, but Medicare Part D plans may cover GLP-1s for their other medically accepted indications, including to treat diabetes, and now to reduce cardiovascular risk based on a recent memo from the Centers for Medicare and Medicaid Services (CMS). Although the potential cost of authorizing Medicare coverage of obesity drugs has presented a barrier to enacting legislation to lift the ban, coverage of these drugs under Medicare for authorized uses has already catapulted these drugs to rank among the top-selling drugs covered by Part D, the Medicare Outpatient Drug Benefit Program.

KFF’s analysis of recently released Medicare Part D spending data from CMS shows that total gross Medicare spending on these drugs has skyrocketed in recent years, from $57 million in 2018 to $5,700 billion dollars by 2022 (Figure 1). (Gross spending does not take into account rebates that would result in lower net spending.) Starting in 2022, Part D covered three GLP-1s for diabetes: Ozempic (semaglutide injection), approved in December 2017; Rybelsus (semaglutide tablets), approved in September 2019; and Mounjaro (tirzepatide) approved in May 2022.

Spending on Ozempic alone increased substantially between 2021 and 2022. Ozempic increased by 10th rank among the 10 best-selling Part D drugs in 2021, with gross spending of $2.6 billion, up 6th place in 2022, with an expenditure of $4.6 billion (Figure 2). In total, gross spending under Medicare Part D was $240 billion in 2022; Ozempic represented 2% of this amount.

Given the relatively high level of Medicare Part D gross spending beginning in 2022 for the two combined semaglutide products, Ozempic and Rybelsus, it is possible that Medicare may select this product for drug price negotiation as soon as in 2025, which would be just over seven years. its first FDA approval in late 2017. (For small-molecule drugs like semaglutide, at least seven years must have passed from the FDA approval date to be eligible for selection, and for drugs with multiple FDA approvals, CMS will use the earliest approval date). If this happens, a Medicare negotiated price would be available starting in 2027. This could reduce total Medicare spending on semaglutide products, such as Ozempic, Rybelsus, and Wegovy.

The fact that GLP-1 coverage under Medicare Part D for authorized uses is already marking the total spending of the Part D program could be a sign of even greater spending, as Part D plans now they can cover Wegovy for its heart health benefits. , if other uses of GLP-1 are approved, and when policymakers consider legislation authorizing Medicare to cover obesity drugs. Competition among GLP-1 drugs could have a moderating effect on launch prices and lead to higher rebates negotiated between manufacturers and pharmacy benefit managers. These drugs offer substantial potential health benefits, but the combination of intense demand, new uses, and high prices for these treatments is likely to put enormous pressure on Medicare spending, Part D plan costs and premiums for Part D coverage.

#Medicare #spending #Ozempic #GLP1s #skyrocketing #KFF
Image Source :

Leave a Comment