Obesity drugs like Ozempic are costly, but here’s how we’ll save money down the line | Opinion
New weight loss drugs powerful enough to help obese patients lose up to a fifth of their total body weight might become the highest-selling medication class ever.
The previous record was set by Humira, an injectable medication that dramatically improves the lives of people suffering from autoimmune disorders such as ulcerative colitis. But the number of Americans with obesity far exceeds those with serious autoimmune issues.
The price tag for these treatments? About $1,000 a month.
Translation: It’s a gargantuan revenue opportunity for drug makers and the Americans who own these companies, vast new corporate tax revenues for all three levels of government, and, of course, new cost headaches for commercial insurers, Medicare and Medicaid, and American taxpayers who pick up the tab for those programs.
The drugs are tirzepatide and semaglutide, marketed as Mounjaro and Ozempic/Wygovy, respectively. Both lower sugar levels in people with diabetes. They also decrease all-cause mortality in diabetics and people with cardiovascular disease. That’s powerful.
And their weight-loss effect is remarkable. Only bariatric surgery achieves better outcomes. The downstream cost savings to the health industry could be billions of dollars a year.
Insurance adjusters have determined that the diagnosis of obesity adds about $2,600 a year to the cost of taking care of one patient. And that difference doesn’t include lost productivity costs estimated to be between $15 and $30 billion a year.
As a conservative, I’m particularly interested in American productivity. From it we derive the wealth, income and tax revenue that pay our bills, develop new products and fund the research and development that makes our lives better.
A family of four pays on average $22,000 a year in health insurance premiums. If just one of the four takes one of these drugs, their insurers’ short-term costs will increase dramatically. That family shouldn’t be surprised when their health premiums rise the following year.
Because these medications are so effective, lawmakers may reverse Medicare’s ban on paying for weight loss therapy. And their popularity will give elected officials cover if they approve them for Medicare’s formulary.
In 2021, Medicare spent $2.6 billion on Ozempic, about 0.2% of its overall budget. With the United States obesity rate stuck at around 40%, it isn’t difficult to foresee that Medicare and Medicaid costs are going to increase as more people ask their physicians for these treatments.
Medicare and other insurers will reap downstream cost savings from fewer hospitalizations for cardiovascular disease and orthopedic procedures. But the return on investment will not reach even half of the upfront costs, and even that will take years to recover.
While I believe that there is a genetic component to obesity, I am a constant proponent of health and wellness with my patients. That’s important because there is societal pressure against using tax dollars to pay for a disease that most people believe can be controlled with diet and exercise.
All of this pushing to expand Medicare coverage must be set against the reality that Medicare will run out of money in less than 10 years — unless we make adjustments.
In all likelihood, that means more federal borrowing, the miserable solution that our system favors.
Creating enough savings isn’t feasible. The 65-and-older crowd votes, and they dislike Medicare benefit cutbacks. Elected officials won’t risk their ire.
Medicare should pay for these new medications but require patients to pay for a third or more of the cost. Why? Weight loss, for the treatment of obesity, requires energetic and long-term effort from the patient even with the assistance of these remarkable drugs.
We Americans need to have some skin in the game when we are trying to get skinny.
Brian Byrd, a former City Council member, is a physician in Fort Worth.
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