The rising popularity of GLP-1 (glucagon-like peptide-1) drugs like Ozempic, Wegovy, and Mounjaro has sparked considerable interest and debate, particularly regarding insurance coverage. These medications, initially developed for type 2 diabetes, have gained attention for their effectiveness in treating obesity. However, their high cost and varying insurance coverage have raised concerns about accessibility and affordability. This article delves into the specifics of SoonerCare coverage for Ozempic, examining the broader landscape of GLP-1 drug coverage within Medicaid and other healthcare plans.
Understanding GLP-1 Drugs and Their Uses
GLP-1 drugs have been utilized for over a decade in treating type 2 diabetes. Newer formulations have demonstrated significant efficacy in obesity treatment. These medications mimic the GLP-1 hormone, which plays a crucial role in regulating blood sugar, metabolism, and satiety.
FDA-Approved GLP-1s
The Food and Drug Administration (FDA) has approved several GLP-1s for different purposes:
- For Obesity Treatment: Saxenda (liraglutide), Wegovy (semaglutide), and Zepbound (tirzepatide).
- For Type 2 Diabetes Treatment: Ozempic (semaglutide), Rybelsus (semaglutide), Victoza (liraglutide), and Mounjaro (tirzepatide).
It's crucial to note that while some GLP-1s are explicitly approved for weight loss (e.g., Wegovy), others, like Ozempic, are approved for managing blood sugar in adults with type 2 diabetes but are sometimes prescribed off-label for weight loss.
SoonerCare and Medicaid Coverage of GLP-1 Drugs
Medicaid programs, including SoonerCare, operate under the Medicaid Drug Rebate Program (MDRP), which mandates coverage for nearly all FDA-approved drugs from participating manufacturers for medically accepted indications. However, there are exceptions, including drugs primarily used for weight loss.
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State Options for Obesity Drug Coverage
States have the discretion to decide whether to cover obesity drugs under Medicaid. As of August 2024, a limited number of state Medicaid programs-13-cover GLP-1s for obesity treatment. This coverage often comes with utilization controls such as prior authorization and BMI requirements.
SoonerCare's Position
Whether SoonerCare covers GLP-1s for obesity treatment specifically may vary. However, Medicaid programs must cover formulations approved for type 2 diabetes, such as Ozempic, Rybelsus, Victoza, and Mounjaro. The challenge lies in determining how much of the increasing use of GLP-1s is related to diabetes treatment versus obesity management, as this distinction is not always clear in available data.
Prior Authorization and Tiered Formularies
Many Medicaid programs utilize tiered formularies to manage drug costs. These tiers often require patients to try lower-cost (Tier 1) medications before progressing to more expensive (Tier 2 or Tier 3) options. For example, to qualify for a Tier 2 medication for diabetes, a SoonerCare member might need to demonstrate a trial of metformin (a Tier 1 medication) at the maximum dose or provide a clinical reason why metformin is not appropriate.
To access a Tier 3 medication, the member typically needs to have tried a Tier 2 medication in the same category and provide documented clinical justification for why the Tier 2 option is unsuitable. In some cases, a clinical exception may apply for medications with FDA-approved diagnoses to reduce cardiovascular death risk in adults with type 2 diabetes and established cardiovascular disease.
Specific Examples and Restrictions
- Lantus® (insulin glargine) and GLP-1 Agonists: In some cases, a patient-specific, clinically significant reason must be provided if a member cannot use Lantus® (insulin glargine) with an alternative glucagon-like peptide-1 (GLP-1) receptor agonist.
- Lantus® and Victoza® (liraglutide): Similarly, a patient-specific reason may be required if a member cannot use Lantus® with Victoza®. Notably, Victoza® might also require prior authorization.
- Quantity Limits: Some medications have quantity limits, such as a limit of two cartridges (each containing two 14-day cartridges) per 28 days.
The Broader Implications of GLP-1 Coverage
Expanding Medicaid coverage for GLP-1 drugs could significantly increase access to these treatments for the nearly 40% of adults and 26% of children with obesity enrolled in Medicaid. However, this expansion also raises concerns about increased drug spending and pressure on state budgets.
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Potential Benefits
- Reduced Obesity Rates: Broader coverage could lead to lower obesity rates among Medicaid enrollees.
- Decreased Chronic Disease Spending: Reduced obesity rates could translate to decreased Medicaid spending on chronic diseases like heart disease, type 2 diabetes, and certain cancers.
Cost Considerations
- Rising Prescription Numbers and Spending: The number of Medicaid prescriptions and gross spending on GLP-1s have been increasing rapidly. From 2019 to 2023, GLP-1 prescriptions increased by over 400%, with gross spending rising by over 500%.
- High Costs Before Rebates: Spending per prescription before rebates reached over $900 in 2023. However, rebates, which can be substantial, are not reflected in these figures.
Challenges and Considerations for States
Many state Medicaid programs are considering expanding their coverage of obesity drugs but are wary of the potential cost implications. Key factors influencing their decisions include cost, the need for legislative action, adherence concerns, clinical criteria development, and potential side effects.
Cost Containment Strategies
States are exploring various cost containment strategies for these drugs, including:
- Utilization Controls: Implementing prior authorization and BMI requirements.
- Re-evaluating Treatment Approaches: Considering the use of obesity medications alongside other treatments like nutritional counseling and behavioral therapy.
- Negotiating Supplemental Rebate Agreements: Seeking additional rebates from drug manufacturers.
The Biden Administration's Proposed Rule
The Biden administration has proposed a new rule that would require Medicare and Medicaid to offer coverage of weight loss medications for people seeking obesity treatment. This rule aims to classify obesity drugs as treatments for a "chronic disease" rather than mere weight loss medications, potentially expanding access to drugs like Ozempic and Wegovy.
Potential Impact
- Reduced Out-of-Pocket Costs: The rule could significantly reduce out-of-pocket costs for these drugs, which can currently exceed $1,000 per month.
- Increased Federal Spending: The federal government would bear the majority of the cost, estimated at $25 billion for Medicare and $11 billion for Medicaid over 10 years, with states paying approximately $3.8 billion.
- Expanded Access: The rule could expand access to these drugs for approximately 3.4 million Americans using Medicare and another 4 million enrolled in Medicaid.
Concerns and Opposition
Despite the potential benefits, concerns remain, particularly regarding the high cost of these drugs and their potential impact on healthcare system finances. Lawmakers like Sen. Bernie Sanders have cautioned that providing coverage without price reductions from drug manufacturers could strain the healthcare system.
Disparities in Access and Alternative Options
Research indicates significant disparities in access to weight loss drugs, with a disproportionate number of prescriptions being dispensed to white individuals. The high cost of these medications when not covered by insurance creates a barrier for many low- and middle-income Americans.
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Compounding Pharmacies
Faced with high costs and coverage denials, some individuals turn to compounding pharmacies for cheaper, off-brand versions of semaglutide or tirzepatide. These pharmacies create their own compounds using raw ingredients.
Risks of Compounded Drugs
While compounding pharmacies offer a more affordable alternative, there are risks associated with using compounded drugs:
- Lack of FDA Oversight: Compounded drugs do not undergo FDA premarket review for safety, effectiveness, or quality.
- Potential for Altered Compounds: The compounds can be altered or combined with untested or unsafe substances.
- Uncertainty About Sourcing: The source of the raw ingredients used in compounding may be unclear.
The FDA advises that compounded versions of GLP-1 drugs "pose a higher risk" to patients compared to FDA-approved drugs.