With the advent of amazingly effective weight loss drugs, America’s high obesity rates and its uniquely astronomical prescription drug pricing appear to be set on a catastrophic collision course that could threaten to disrupt our health care system. There is a risk that it will cause the entire company to go bankrupt. new senate report This modeled the economic impact of the drug under different intake scenarios.
If just half of obese adults in the United States started taking new weight-loss drugs such as Wegoby, the total cost would be an estimated $411 billion a year, the analysis found. This is more than the $406 billion that Americans spent on all prescription drugs in 2022.
While most spending on weight loss drugs occurs in the commercial market, which tends to lead to higher health insurance premiums, it also places an extraordinary financial burden on the taxpayer-funded Medicare and Medicaid programs. In a scenario in which half of obese adults take drugs, these federal programs would cost a total of $166 billion annually, comparable to the program’s total drug costs of $175 billion in 2022.
Thanks to weight loss drugs, total prescription drug spending in the United States is expected to exceed $1 trillion annually by 2031. Without these, the underlying projected spending on all prescription drugs would be just under $600 billion.
The analysis was compiled by the Senate Health, Education, Labor, and Pensions Committee (HELP), chaired by hard-core drug price critic Bernie Sanders (I-Vermont). And it quickly negates the common argument that the blockbuster weight loss drug is expensive. This means that due to its high efficacy, this drug has the potential to improve people’s health in a wide range of ways, including controlling diabetes and improving cardiovascular health. And with these improvements, people won’t need as much medical care, reducing health care costs overall.
However, while these drugs appear to have far-reaching and life-changing effects on overall health, their prices remain too high to be fully offset by savings in healthcare costs. The HELP Committee’s analysis cited a March Congressional Budget Office (CBO) report and found that: “At current prices, [anti-obesity medicines] Cutting other health spending would cost the federal government more money than it would save, leading to an overall increase in the budget deficit over the next decade. “Additionally, in April, the CBO Director will reduce the price of weight-loss drugs by 90 percent for drug companies.”enter the stadium“Do not increase the national deficit.
The HELP Committee’s report offered a relatively simple solution to this problem. Pharmaceutical companies must set prices in the United States to match the relatively low prices they set in other countries. The report focused on Wegovy because it currently accounts for the majority of U.S. prescriptions for a new class of weight loss drugs (GLP-1 drugs). Wegovy is manufactured by Denmark-based Novo Nordisk.
Wegovy’s estimated net price (after rebates) in the US is $809 per month. In Denmark it costs $186 per month. A study by researchers at Yale University estimates that drugs like Wegoby could be produced profitably for less than $5 a month.
If Novo Nordisk set the U.S. price of Wegoby to match the Danish price, spending to treat obesity in half of U.S. adults would fall from $411 billion to $94.5 billion, a savings of approximately $316.5 billion. becomes.
Without significant price reductions, Americans are likely to lose access to medicines, face increased overall health care costs, or both. The HELP Committee report highlights how this has recently played out in North Carolina. In January, the State Employees Health Plan’s Board of Trustees voted to end all coverage of Wegovy and other GLP-1 drugs, citing cost. Estimates found that if the plan continued to cover drugs, the state would have to nearly double health insurance premiums to offset the cost.
