The eye-popping projections for weight-loss drug sales depend on insurers agreeing to provide coverage for the expensive treatments, and momentum appears to be building on that front. But Bank of America analyst Allen Lutz is wondering whether employers know how much risk they’re taking. The hope is that spending today on GLP-1 drugs like Ozempic, which can cost $1,300 a month or more, will yield health care savings tomorrow. “We wonder whether employers adding coverage to GLP-1 in 2024 will fully consider off-label drug use (paraphrasing),” Lutz wrote in a research note Monday. outside the scope of benefits) and the ability to have additional members or not. . Lutz’s comments come after a survey found that the number of employers planning to offer coverage for these drugs nearly doubled. The poll was conducted by market researcher Savanta on behalf of Accolade, a healthcare benefits navigator, and questioned 500 human resources officials in August and September. survey, 43% said they plan to offer GLP-1 coverage by 2024, up from 25% of employers currently offering it. Accolade also said 81% of HR representatives felt employees would care about medication access. The drug GLP-1 was first approved to treat Type 2 diabetes but is now being used for obesity and overweight. These drugs include Novo Nordisk’s semaglutide, sold under the names Ozempic for diabetes control, and Wegovy for weight loss. Eli Lilly produces Mounjaro, also known as tirzepatide. It received approval from the US Food and Drug Administration to treat Type 2 diabetes last year and could be approved for obesity later this year. Both of these drugs can help patients lose 15% or more of their initial weight. Unlike previous generations of weight loss pills, their side effects are largely mild and include diarrhea, constipation, and nausea. Wegovy’s label also includes warnings about pancreatitis and certain types of intestinal obstruction. Although designed to treat overweight and obesity, the drug has been used off-label by people wanting to lose weight for cosmetic reasons, a concern Lutz raised. The healthcare services industry said: “Separately, employers continue to grapple with how to encourage patients to make longer-term behavioral and lifestyle changes to support permanent weight loss, considering potential long-term side effects, while managing the higher costs associated with insurance.” said the analyst. Higher hospital labor costs as well as the GLP-1 drug are contributing to the spike in health insurance costs since 2012, Lutz said. He cited a recent estimate from consulting firms Mercer and Willis Towers Watson predict insurance costs will increase 6.5% from 2023 to 2024. Insurers are already feeling the pinch even though it’s still early days for these drugs. In a research note Wednesday, Citi analyst Peter Verdult estimated that GLP-1 sales could reach $30 billion for diabetes and $6 billion for obesity this year. “Penetration remains modest,” Verdult said. He expects 10% fewer diabetics to be on medication and one million fewer obese patients to be on treatment. But those numbers will increase, especially as ongoing research continues to demonstrate benefits beyond blood sugar control and weight loss. For example, these drugs have shown cardiovascular benefits as well as potential benefits for the kidneys and liver. Novo Nordisk and Eli Lilly are also testing whether the drug GLP-1 can help people with alcoholism, sleep apnea and other conditions. According to the Centers for Disease Control and Prevention, more than 40% of adults in the US are obese. Factoring in overweight individuals would increase the potential population of drug users to more than 70% of adults. Doctors consider obesity a chronic condition. Many patients who successfully lost weight using the drug GLP-1 found they gained the weight back after stopping the drug. That’s led some analysts to predict these drugs will have peak sales of more than $100 billion when they become widely prescribed as anti-cholesterol statin drugs. CNBC’s Michael Bloom contributed to this report.
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