The emergence of glucagon-like peptide-1 receptor agonists (GLP-1 RAs), such as semaglutide and tirzepatide, has revolutionized the management of both diabetes and obesity. These medications, known by brand names like Ozempic, Wegovy, Zepbound, and Mounjaro, offer significant weight loss and potential benefits for other chronic conditions. While their clinical efficacy is well-documented, the cost-effectiveness of these drugs, particularly Zepbound (tirzepatide), remains a subject of ongoing evaluation. This article delves into the cost-effectiveness of Zepbound for weight loss, considering its clinical benefits, economic implications, and potential strategies for optimizing its use.
How GLP-1 RAs Work
GLP-1 receptor agonists mimic natural hormones that regulate appetite and satiety. By activating GLP-1 receptors, these drugs help individuals feel fuller sooner, leading to reduced food intake and subsequent weight loss. Clinical trials have demonstrated that GLP-1 RAs can produce weight loss of 15-20%, surpassing the results achieved with older medications or lifestyle interventions alone. Beyond weight loss, these drugs have shown promise in reducing cardiovascular disease risk, slowing the progression of chronic kidney disease, and improving conditions like sleep apnea.
The Challenge of Cost-Effectiveness
While the clinical benefits of GLP-1 RAs are evident, their high cost raises concerns about their overall cost-effectiveness. Health economists often use a threshold of $100,000 per quality-adjusted life year (QALY) to determine whether a medical treatment is cost-effective. QALYs represent a standardized measure that combines both the quantity and quality of life gained from a treatment.
A 2024 lifetime cost-effectiveness analysis examined four antiobesity medications (tirzepatide, semaglutide, naltrexone-bupropion, or phentermine-topiramate) combined with lifestyle modification versus lifestyle modification alone. The study, which utilized the Diabetes, Obesity, Cardiovascular Disease Microsimulation model for US adults, found that while tirzepatide and semaglutide offered substantial long-term health benefits, they were not cost-effective at current net prices.
The analysis revealed that among 126 million eligible US adults, tirzepatide would avert 45,609 obesity cases per 100,000 individuals and reduce 20,854 incident cases of diabetes per 100,000 individuals. It would also reduce 10,655 cardiovascular disease cases per 100,000 individuals. Despite the largest incremental QALY gains of 0.35 for tirzepatide among all antiobesity medications, the incremental cost-effectiveness ratio was $197,023/QALY. To reach the $100,000/QALY threshold, the price of tirzepatide would require an additional discount of 30.5% from its current net price.
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Medicare Coverage and Fiscal Impact
The potential expansion of Medicare coverage for GLP-1 drugs for obesity treatment has significant fiscal implications. If Medicare were to cover these drugs, millions of beneficiaries would likely start using them, leading to substantial drug costs. However, this increased spending could be partially offset by reduced hospitalizations and chronic disease care.
A study published in JAMA Health Forum in April 2025 projected that if Medicare expanded coverage for GLP-1 drugs, three million beneficiaries would likely start using the drugs over the next decade. Drug costs would total nearly $66 billion, with about $18 billion saved through reduced hospitalizations and chronic disease care. The net cost remains a significant concern for insurers and policymakers.
Strategies for Improving Cost-Effectiveness
Several strategies can be implemented to improve the cost-effectiveness of GLP-1 RAs like Zepbound.
Targeted Use
GLP-1 RAs are not equally effective for all patients. Some individuals respond exceptionally well, while others experience minimal benefits. Refining clinical guidelines to prescribe these drugs more selectively can help ensure that they are used in patients who are most likely to benefit. Jennifer Hwang, DO, a primary care physician at UChicago Medicine, is currently working on a follow-up project to refine clinical guidelines for prescribing GLP-1 drugs more selectively.
Limited Treatment Duration
The cost of long-term treatment with GLP-1 RAs can be substantial. Exploring strategies to limit the duration of treatment, such as using these drugs to achieve initial weight loss and then transitioning to lifestyle interventions for maintenance, can significantly reduce costs. David Kim, PhD, a health economist at UChicago, suggests that if patients do not have to stay on these drugs forever, costs can be reduced significantly.
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Price Negotiations
Negotiating lower drug prices is crucial for improving the cost-effectiveness of GLP-1 RAs. Semaglutide is already among the first 15 drugs selected for Medicare price negotiations under the Inflation Reduction Act, with changes expected to take effect in 2027. Similar efforts to negotiate the price of tirzepatide could make it a more affordable option. To reach the $100,000/QALY threshold, their prices would require additional discounts by 30.5% for tirzepatide and 81.9% for semaglutide from their current net prices.
Value-Based Pricing
Value-based pricing models, where the price of a drug is tied to its clinical outcomes, could also improve cost-effectiveness. If GLP-1 RAs are priced based on the actual benefits they provide to patients, it could incentivize manufacturers to focus on developing drugs that are both effective and affordable.
The ICER's Perspective
The Institute for Clinical and Economic Review (ICER) has also weighed in on the cost-effectiveness of GLP-1 RAs. In a draft report, the ICER determined that these drugs are "highly cost-effective" due to their ability to help patients lose weight, reduce metabolic risk factors, and address obesity-related health complications. However, the ICER also flagged "serious" budgetary concerns related to the drugs.
The Future of GLP-1 RAs
The field of GLP-1 RAs is rapidly evolving, with new studies emerging regularly that demonstrate additional benefits for conditions like fatty liver disease, addiction, and sleep apnea. As more data become available, the cost-effectiveness of these drugs may improve further.
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