As Weight-Loss Drug Demand Soars, States Face Medicaid Coverage Dilemma

Dr. Sarah Ro, a weight management physician with over three decades of experience, has encountered numerous patients, many on Medicaid, who struggle with persistent weight issues. Despite their dedication to changing their lifestyles, many remain entrenched in a cycle of dieting without success.

“They have a tremendous amount of disease burden,” said Ro, who leads the University of North Carolina Physicians Network weight management program, which is dedicated to serving marginalized communities. The challenges these patients face are compounded by various health complications.

According to Ro, the increasingly popular GLP-1 drug therapy may offer much-needed assistance. This medication mimics hormones in the digestive tract that help regulate blood sugar levels. While drugs like Ozempic, Wegovy, and Zepbound have primarily been prescribed for diabetes, they are now being recognized for their efficacy in facilitating significant weight loss by signaling the brain to reduce hunger.

However, these drugs come with a steep price tag, often ranging from approximately $940 to $1,350 per month, making them unaffordable for many patients. This fiscal barrier has ignited a conversation within state Medicaid programs about the potential inclusion of GLP-1 drugs for weight loss, with implications for both health equity and fiscal responsibility.

Recently, North Carolina began covering some FDA-approved GLP-1s for obesity treatment, a trend echoed by South Carolina starting November 1. At least 12 other states also offer coverage for these drugs under similar circumstances.

Kody Kinsley, the former secretary of the North Carolina Department of Health and Human Services, emphasized the moral imperative of extending this coverage, citing the vast financial burden that obesity-related health issues place on the Medicaid budget. With an estimated $1 billion spent annually on obesity-related expenses in North Carolina, he argued for the economic wisdom of investing in treatments that could alleviate these costs over time.

The cost of providing GLP-1s is projected to be around $16 million annually for North Carolina, a fraction of what the state pays for other specialty drugs like Dupixent, which costs about $28 million a year.

Kinsley highlighted societal tendencies to resist covering drugs associated with stigmatized conditions, despite obesity being a recognized medical issue.

In total, at least 13 states have now begun covering GLP-1 drugs for obesity treatment, including California, Massachusetts, and Virginia. A recent survey by KFF indicated that half of the remaining state Medicaid programs are considering similar coverage options, though the high costs remain a major hurdle.

Medicaid expenditures on GLP-1s surged from $597.3 million for approximately 755,000 prescriptions in 2019 to $3.9 billion for 3.8 million prescriptions this year. However, it remains unclear how much of this increase is due to obesity treatment versus diabetes treatment.

Experts like John Cawley, a Cornell University economics professor, noted that although obesity doubles health care costs, savings from covering GLP-1s for obesity might depend significantly on the patient’s initial BMI. Significant savings could primarily occur for those with a BMI around 40 or higher, while lower BMIs may yield minimal financial benefits against the current drug prices.

Dr. Ro pointed to the complex nature of obesity among North Carolina residents, particularly in vulnerable communities. Many face determinants of health, such as limited access to nutritious food and safe spaces for physical activity, exacerbating their struggle against obesity. Traditional high-calorie Southern cuisine, combined with lifestyle challenges, contributes to a statewide obesity rate of around 70%.

In recent developments, the Biden administration has proposed a rule to mandate the coverage of GLP-1s for weight loss under Medicaid and Medicare. If approved, this change could result in an estimated $11 billion cost to the federal government over ten years, with states projected to incur about $3.8 billion of that amount.

As states navigate their options and the federal government deliberates, Dr. Ro sees promise in greater access to GLP-1 treatments, particularly for patients with serious health risks. “GLP-1s are not the answer for everybody,” she acknowledged, “but for high-risk patients, these medications could be lifesaving.”