skip to Main Content
 

CBO Considers Cost of Increasing Anti-Obesity Medication Use

  • This page as PDF

Summary

Insurance coverage of anti-obesity medications is increasing, but patient access under Medicare remains uncertain.

The emergence of new glucagon-like peptide-1 (GLP-1) anti-obesity medications (AOMs) offers novel treatment options for people with obesity, with implications for population health and healthcare spending. Manufacturers of these products must consider complex policy and coverage dynamics in their access strategies, as payers are working to understand the value proposition of these medications and how product coverage will impact their budgets.

Patient access to AOMs varies by insurance coverage but is growing. A recent survey of US employers found that the number of workplaces covering AOMs is expected to double between 2023 and 2024. In Medicare Part D, however, statutory restrictions prohibit coverage of drugs that are prescribed for weight loss. The recently reintroduced Treat and Reduce Obesity Act (TROA) would remove this prohibition and expand the types of healthcare providers qualified to furnish intensive behavioral therapy as a form of obesity treatment to Medicare beneficiaries. TROA was first introduced in 2013 but has not advanced. Obesity continues to be an area of interest for policymakers, particularly as new treatments become available, but the cost to the federal government of providing access to AOMs in Part D has become a subject of concern.

On October 5, the Congressional Budget Office (CBO) published a blog post on factors that would impact the federal cost of covering AOMs in Medicare Part D. CBO evaluated the cost dynamics of Medicare coverage of AOMs and emphasized the need for further research to assess the effects of AOMs on healthcare spending, accounting for their costs and potential savings in other areas of healthcare. CBO assessed sales growth for AOMs, manufacturer rebates, medical cost offsets from effective obesity treatment, and the possibility of AOM prices being negotiated by Medicare under the Inflation Reduction Act. Accounting for these factors, CBO concluded that “the drug’s net cost to the Medicare program would be significant over the next 10 years.”

CBO ends its blog post with a call for new research on factors affecting AOM use, patient adherence to drugs currently on the market, and expectations about the pricing and effectiveness of AOMs that are being developed. Research on near- and long-term clinical impacts of AOMs and their effects on patients’ use of—and spending on—other medical services would also be of particular interest to CBO. CBO does not explicitly consider loss of exclusivity for products in the class or management of the class by Part D plans, but these factors would likely have the effect of further lowering the federal cost to cover these products. Stakeholders should take into account that the CBO score is likely to affect patient access to AOMs through Medicare. If the CBO score is perceived as excessively expensive, it is likely to hinder progress in the Medicare coverage landscape. Stakeholders have the opportunity to influence CBO’s assumptions and to evaluate policy alternatives.

Advances in obesity care present an opportunity to address a highly prevalent condition that impacts over 41% of adults in the US. However, the access landscape for these medications is still evolving. With a comprehensive approach that includes evidence and strategy, market access, policy, and data analytics, Avalere helps clients understand the evolving landscape for access to obesity care, support research efforts, model the impacts of policy changes, and position for success in the market. To learn how Avalere can help your organization respond to—or shape—the evolving obesity landscape, connect with us.

2024: Accelerate Impact Sign up for our 2024 Healthcare Industry Outlook webinar
January 17, 1 PM ET
Learn More
Register Now
From beginning to end, our team synergy
produces measurable results. Let's work together.

Sign up to receive more insights about Federal and State Policy
Please enter your email address to be notified when new Federal and State Policy insights are published.

Back To Top