State workers’ health plan ending coverage for certain weight-loss drugs

Published 8:58 am Monday, January 29, 2024

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The health insurance program for North Carolina government workers, teachers, retirees and their families soon won’t cover popular but expensive anti-obesity drugs, the result of a price fight with the manufacturer of two brand-name medications.

The North Carolina State Health Plan trustees board voted 4-3 on Thursday to exclude coverage effective April 1 of what are known as GLP-1 medications when used for the purpose of weight loss, news outlets reported. GLP-1-related prescriptions for diabetes treatment aren’t affected.

The State Health Plan, which covers more than 700,000 people, has been dealing with massive growth in prescriptions of these drugs and their resulting expense. The GLP-1 weight-loss medications cost the plan an estimated $102 million in 2023, plan officials say, or about 10% of what it paid for all prescriptions.

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In October, the board had voted to permit what became nearly 25,000 people with prescriptions for Wegovy, Saxenda or Zepbound for the purpose of weight loss at the end of 2023 to continue receiving them. But no additional prescriptions would be allowed going forward.

But this shift in drug utilization meant the State Health Plan would lose a 40% rebate on the cost of Wegovy and Saxenda from their manufacturer Novo Nordisk through the contract with plan pharmacy benefits manager CVS/Caremark.

That would have resulted in the plan spending $139 million on the grandfathered prescriptions, instead of $84 million with the rebate. Even with the rebate, the state plan was paying $800 for a month of Wegovy.

By ending coverage for the weight-loss drugs after April 1, the plan said it could save nearly $100 million this year.

“We can’t spend money we don’t have, we just can’t,” said Dr. Pete Robie, a board member. Thursday’s vote ended the grandfather provision.

If no limits had been set, the State Health Plan would have spent an estimated $170 million on the weight-loss drugs, plan administrator Sam Watts said. That could have necessitated by 2025 a monthly surcharge of $48.50 on each plan member, the plan said, whether that member is using the drugs or not.

Board member Melanie Bush argued that the plan should maintain coverage of the existing prescriptions while negotiations continue with manufacturers and CVS/Caremark.

“This is a life-saving drug, and we’re talking about denying it,” said Bush, who also helps lead the state’s Medicaid program. Board members agreed the vote could be reconsidered if a compromise is reached.

“We have seen movement, but not enough movement to say, ‘Yes we have a solution,'” Watts said.