Ozempic, Wegovy costs could put companies out of business: Blackstone CEO

Wegovy injection pen
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  • Executives at a health care conference debated whether employers should pay for workers’ diet pills.
  • A Blackstone executive warns that the expensive GLP-1 drug could put some employers out of business.
  • Panelists agreed that companies providing drugs should do so as part of a broader support program.

As more and more people seek expensive drugs to help them lose weight, their companies are facing difficult decisions about whether to pay for them.

For some companies, it doesn’t make financial sense, an executive at private equity giant Blackstone said Tuesday during a panel discussion at the HLTH conference in Las Vegas.

Spending on these diabetes and weight loss drugs, known as GLP-1 agonists, has increased 600% across the category, said Andreas Mang, CEO of Equity Healthcare, a division of Blackstone. Blackstone’s investment over the past 4 years. Bearing those huge costs is impractical for companies operating in industries like hospitality, where employees don’t stick around for the long haul.

“The cost side of the equation is real. It will put pressure on companies. And if this continues, companies will go bankrupt because there will literally be nothing they can do other than paying for GLP-1,” he said.

GLP-1s, such as Ozempic, Wegovy and Mounjaro, have become more popular. The drugs are effective, they can help people lose 15% to 20% of their weight, more than previous prescription drugs.

But they are also expensive. The value of these injections in a month can amount to about $1,000 or more. And because more than 40% of Americans are considered obese, the costs to those who typically pay for health care, such as employers and state governments, could be enormous. . Benefits company Aon recently predicted employer health insurance costs will increase 8.5% next year, partly due to weight-loss drugs. These dynamics have led to a heated debate about who should use these drugs and who should be responsible.

Ro promoted its new Ro Body Program with this design.
Ro

Dr. Melynda Barnes, chief medical officer of digital health startup Ro, which prescribes weight loss drugs, argued during the panel that the conversation around these drugs should focus less on bottom line for employers and health plans. Whether or not someone takes a GLP-1 drug should be a conversation between the patient and their doctor, she said.

“What’s really scary is that we’re using the cost of drugs that won’t be prohibitive in our lifetime as a reason to influence what drugs people can access,” she said.

She continued: “There’s a negative stigma attached to obesity and now they feel like they actually have a chance in life, whether it’s having children, playing with them, going on vacation, meeting flights to Europe without having to buy a second”. chair.”

However, panelists generally agreed that if employers decide to cover drugs, they should do so as part of a broader program to help those workers develop active lifestyle habits. Better mobility and nutrition or support for side effects.

“When applied in a system that provides ongoing support to employees, this makes a lot of sense, but just liberating them, releasing them without any form of support, I think is a recipe for disaster. And I also believe it’s wasteful.” said Lucia Guillory, chief human resources officer at Virta Health, which helps people reverse Type 2 diabetes through nutrition and coaching.

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Wei-Li Shao, president of Omada Health, said employers should cover the drug along with a support program to ensure patients taking the drug get the best results.

Omada, a diabetes management company, launched a program earlier this year to help companies manage their employees’ use of weight-loss medications and provide additional lifestyle support even when they take them. medication use and when they stop using it. Shao said some companies that work with Omada have chosen to cover drugs for a limited period, such as one or two years.

“We have to build solutions that can go hand in hand with GLP-1,” Shao said. “They’re not going away. Pharmaceutical companies are going to spend billions, tens of billions of dollars to make these products commercially successful. So how do we create companion programs and support program that not only enhances the effectiveness of these products but also makes them affordable.” in the long term?”

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