Insurers, PBMs restrict access to weight loss drugs as demand soars

When Tim Norfleet heard the Ohio Department of Education would pay for its workers to use anti-obesity drugs, he knew he wanted to sign up. 

Norfleet, 61, a federal programs specialist, said he had been mulling undergoing weight loss surgery after gaining 50 pounds since the start of the COVID-19 pandemic. But using a drug, combined with exercise and diet changes, seemed preferable to surgery.

His company's pharmacy benefit manager, UnitedHealth Group’s OptumRx, in August agreed to cover the cost of Wegovy. But rising demand created a shortage of the drug, which meant Norfleet was unable to fill his prescription until January. After six months, OptumRx required Norfleet to receive a second prior authorization to access the drug. He was denied, further delaying his treatment. 

"The representative I spoke to could not or would not provide me with a reason why it was denied,” Norfleet said. “They just said they were not going to give me more medication.”

Payers have taken a cautious approach to handling rising demand for the pricey new class of drugs known as glucagon-like peptide agnostics, or GLP-1s. They include Novo Nordisk’s Wegovy and Saxenda, both approved for weight loss, as well as the diabetes drug Ozempic.

The drugs can cost more than $13,600 per patient per year, and the potential market is large: Approximately 142 million adults nationwide meet the Food and Drug Administration’s prescription criteria, according to the Institute for Clinical and Economic Review, a nonprofit that reviews the cost-effectiveness of medical treatments. These individuals either are obese with a body mass index of at least 30, or have a BMI of at least 27 and a pre-existing condition, such as diabetes. 

The drug category has sparked familiar finger-pointing across the prescription supply chain. Payers say they want to provide patients access to GLP-1s, but can't because of high costs set by manufacturers. Drugmakers blame PBMs for the lack of coverage and high out-of-pocket expense. Both sides hope to sidestep the squabbling by downplaying the drugs' clinical benefit and painting GLP-1s as "lifestyle" or vanity medications and shift the cost burden to consumers, said Antonio Ciaccia, CEO of drug pricing research firm 46brooklyn Research and president of 3 Axis Advisors. 

“Insurers understand that this is about to be a tidal wave,” Ciaccia said. “But I think [insurers] also understand that, for many patients, they'll be willing to pay for this stuff no matter what, regardless of whether it's covered. It's a great opportunity for insurers to shirk their traditional responsibility of coverage with the argument that, ‘Hey, this is just a vanity med.’” 

The majority of insurers are responding to the rising demand by imposing restrictions beyond the Food and Drug Administration’s label, allowing only the most obese patients access to the drug, requiring patients to enroll and complete diet and exercise programs, or test and fail lower-cost drugs before agreeing to pay for Wegovy, according to an analysis of insurer coverage policies by the Specialty Drug Evidence and Coverage Database at Tufts Medical Center. 

Nine of the 17 largest insurers have restrictions beyond the FDA’s label, the analysis found. Before paying for the drug, several Blue Cross Blue Shield insurers, for example, require patients to complete rigorous exercise and diet programs that promise to help them lose at least one pound per week over a three-month period, the analysis said. 

“The higher the cost of the drug, the more likely health plans will restrict it. The higher the prevalence of the disease, controlling for other factors, the more likely health plans will be restrictive,” said James Chambers, an associate professor at Tufts Medical Center. 

Centene and Highmark Health are the only insurers studied that developed policies in line with what the FDA's label indicates, so long as patients use Wegovy in conjunction with exercise and diet programs, the analysis found. 

Highmark met with local providers to discuss the patient population and prescribing habits, and decided to maintain its coverage policy for Wegovy. “The [return-on-investment] on spending $13,000 a year on a diabetic to keep them from having cardiovascular problems is a drop in the bucket," said Dr. Tim Law, Highmark's vice president and executive medical director. "It's minuscule compared to the cost of care if you don't treat these people, as well as those with obesity problems." 

Centene did not respond to an interview request.  

Drugmakers know they do not need insurance coverage to sell the drugs. Doctors wrote more than 500,000 new prescriptions for GLP-1s in February, up 152% from a year ago, according to a report issued this month from drug analytics firm IQVIA. Insurers, employers and patients spent $2.1 billion on the products in 2022, the report said. 

"You're going to have a lot of folks who do not meet the stringent criteria that insurers architect in order for them to get coverage," Ciaccia said. "This is one where I think the consumer, if they have the financial wherewithal, will be willing to stretch in order to pay for it out-of-pocket." 

At their current price, Wegovy and other GLP-1 drugs do not deliver an affordable long-term value for 99.9% of the eligible population, according to an October report from the Institute for Clinical and Economic Review. Drug manufacturers would need to cut their prices by almost half to ensure they are a good value for most patients, acording to the report.

Novo Nordisk has pricing plans available for insured patients with high cost-sharing requirements, or those paying cash for the drug, a spokesperson wrote in an email. Approximately 40 million individuals with obesity have commercial coverage for Wegovy, the spokesperson wrote. Commercial insurers are using pharmacy benefit managers to limit patients' access to anti-obesity medications by requiring employers to opt-in to coverage, the spokesperson said. 

PBMs are not recommending employers pay for their workers to use these drugs, the spokesperson said. 

Most employers are not interested in adding GLP-1s to their formularies, Cigna Group CEO David Cordani said during the company’s first-quarter earnings call last week. Cigna is one of the largest administrators of job-based insurance, helping companies develop and enforce coverage policies for 16 million workers. The insurer, which also operates the large pharmacy benefit manager Express Scripts, has inked value-based payment plans with GLP-1 drug manufacturers to control the cost of the drugs, Cordani said. Cigna did not respond to an interview request. 

“Employers have had a more limited appetite to expand coverage beyond clinical diagnoses, such as diabetes, for certain lifestyle treatments,” Cordani said on the earnings call. “There has been some, but we’ve seen more limited adoption of that, thus far.”  

Insurers like Cigna stand to make money from the drugs by dispensing them from pharmacies owned by the same parent organization, Ciaccia said. Payers can also generate revenue by retaining rebates from drug manufacturers, he said. Any additional costs carriers incur will be passed down to consumers as higher premiums, he said. "There are a number of ways that they could find to get their own slice of the pie," Ciaccia said. 

Norfleet's experience reflects the hesitancy payers have adopting the drugs, and the restrictions they have placed on them. OptumRx denied his second prior authorization request for Wegovy in early February. “Based on the information provided, the member did not meet the medication-specific, clinical evidence-based guidelines for Wegovy,” an OptumRx spokesperson wrote in an email to Modern Healthcare.

Norfleet said he called OptumRx to tell the company that their prior authorization system improperly rejected his claim. But after getting nowhere with the PBM's call center staff, Norfleet turned to Twitter to get his denial overturned. He said it was only then that he was able to successfully appeal OptumRx's prior authorization decision and fill his prescription for Wegovy. 

"It's been a life changer," Norfleet said of the drug. "Now that my weight has dropped down, I don't need equipment, I don't wake up having difficulty breathing in the middle of the night anymore. It's been a game-changer for me."