NC State Health Plan board delays decision on weight-loss drugs, imposes moratorium

After weeks of consideration leading up to a highly anticipated vote, the NC State Health Plan trustees decided Thursday to delay a decision on whether the plan will continue covering popular anti-obesity medications.

State Health Plan staff and state Treasurer Dale Folwell, who oversees the plan, had recommended ending coverage of obesity GLP-1 medications, like Wegovy, due to unsustainable spending on the drugs. The plan has spent more on Wegovy than any other medication this year, the plan’s pharmacy benefit manager told the board of trustees in August.

Trustees said they needed time to gather more evidence about the cost-effectiveness of GLP-1 medications and consider additional options for curtailing spending on the drugs. They instituted a temporary moratorium on new users, which would prevent members from starting the weight loss drug starting on Jan. 1.

“There’s got to be a better way than an indiscriminate ‘we’re not going to cover it at all’,” said Dr. Kerry Willis, a board Member. “I’ve just got some more questions.”

The board will reconvene to discuss coverage of these drugs in January.

In a statement issued before the board vote, Novo Nordisk, the manufacturer of Wegovy, said the plan’s recommendation to deny insurance coverage for these drugs is “simply irresponsible.”

“We stand committed to finding meaningful, workable solutions to manage costs, but we steadfastly oppose leaving patients without coverage,” the company statement read.

The board’s decision does not affect the coverage of similar drugs prescribed for diabetes, like Ozempic, nor does it affect other types of weight-loss drugs, like Orlistat.

“A new lease on life”

Pam Van Emden, an NC State University employee, said these obesity drugs have granted her a “new lease on life.”

She said she had tried to lose weight for years with gym memberships, over-the-counter medications, and state-sponsored nutrition and exercise programs.

The most she ever lost that way was 45 pounds, which she regained shortly after.

In 2021, her doctor suggested she try Wegovy.

Within two years, she lost more than 100 pounds. She said she is no longer pre-diabetic and her blood pressure is the lowest it has been in years.

At Thursday’s meeting, she begged health plan leaders to maintain coverage of the medication. Van Emden said she makes just above $40,000 a year and could not afford to pay for the weekly injections without help from insurance.

She showed the Board of Trustees headshots from before and after she started the medication.

“What I cannot physically show you is how much healthier I am, how much less I have to see a doctor and how much stronger my immune system is,” she said. “For me, if you take away the benefit of weight loss drugs, it is equitable to taking insulin coverage from a Type 1 diabetic.”

Emily Weaver, a nurse practitioner who specializes in obesity medicine, said a decision to end coverage of these medications would be a “giant step back” in treating obesity, which affects nearly 40% of North Carolinians.

At her practice in Cary, which focuses on weight-loss treatments, she said she sees State Health Plan members who have greatly benefited from GLP-1s.

For one NC high school teacher, Wegovy was the only way she was able to effectively lose weight, even after trying bariatric procedures and oral medications, Weaver said.

“State employees like teachers are expected to invest decades into their careers,” she said. “They deserve a health plan that invests in them in a similar manner.”

Weight loss drugs draining the State Health Plan

Earlier this month, The News & Observer reported that the rising popularity of these pricey weight loss drugs was putting the health plan “financially under siege.”

Wegovy and Saxenda have a $1,350 list price, though manufacturer rebates and negotiated discounts can reduce that cost. At this pace, the State Health Plan would have to raise monthly premiums by $50 for 570,000 members in order to cover the projected costs of the medications, according to an analysis from NCSHP’s actuary.

“We are not questioning the efficacy of the drugs, but we simply can’t afford these medications at the manufacturer’s current price point,” Folwell wrote in a press release announcing his recommendation to end coverage.

Novo Nordisk, which is based in Denmark, charges about $330 for Wegovy in Germany and $300 in the Netherlands, according to the Peterson-KFF Health System Tracker.

Flint Benson, a representative from the State Employees Association of North Carolina, praised Folwell for pushing back against Novo Nordisk’s prices, but said that benefits should not change for state employees.

“These drugs have provided hope and a better life for many members,” he said. “They should not be penalized by ‘Big Pharma.’”

Other public employee health plans have already pulled back coverage of pricey anti-obesity drugs.

The health insurance plan for University of Michigan employees announced earlier this year that it would raise copays for the drugs in order to incentivize members to pick cheaper, although less effective, medications instead.

The plan for the University of Texas employees removed coverage for Wegovy and Saxenda on Sept. 1, citing “unsustainable costs” without a meaningful reduction in health care spending from obesity-related complications.

This summer, Connecticut’s state health plan announced it would only cover weight-loss prescriptions written by doctors from a single, approved obesity treatment company.

Several other state health plans have maintained their coverage of these obesity drugs.

Does covering the obesity drugs pay off in the long run?

Lobbyists for Novo Nordisk have argued that the upfront cost of their drugs pays off in the long run because patients on the medications are less likely to develop other costly chronic conditions like Type 2 diabetes and heart disease.

But NCSHP staff push back against that claim. They argue the longer-term savings aren’t nearly enough to offset the cost, especially given that members would have to take the expensive drugs in perpetuity in order to maintain the health benefits.

Their own analysis of current research found there were “no studies that show a positive return on investment.”

An independent analysis from the Institute for Clinical and Economic Review, a nonprofit that reviews US prescription drug pricing, found Wegovy is not cost-effective at its current price.

However, obesity medicine specialists have cautioned against only thinking about these medications in terms of dollars.

The medications have shown to be remarkably effective — people taking Wegovy lost about 15% of their body weight and clinical trials have shown weekly injections could stave off diabetes and severe heart disease.

“It’s very short-sighted to cut off or reduce access to these effective anti-obesity medications,” one doctor said. “It makes thousands of your employees sicker.”

The potential coverage options

The Board of Trustees was considering five coverage options:

• Maintaining the current coverage of weight loss drugs, which they wrote would require the plan to increase premiums substantially for all members.

• Moving all the weight loss drugs to a lower tier. This would cause members to pay more out of pocket and would only slightly reduce the plan’s spending on these drugs, according to the plan’s projections.

• Creating an entirely new tier for GLP-1s. This would increase out-of-pocket costs for members and reduce the number of people using weight loss drugs. This moderately reduces costs to NCSHP.

• Ending coverage of GLP-1s for weight loss, with an exception process. This would dramatically reduce the number of people taking the medications, which substantially reduces costs for the plan. They wrote that allowing for exceptions “increases litigation risk.”

• Ending coverage of GLP-1s for weight loss drugs with no path for exceptions.

Teddy Rosenbluth covers science and health care for The News & Observer in a position funded by Duke Health and the Burroughs Wellcome Fund. The N&O maintains full editorial control of the work.

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