Small group of prescribers led to millions in weight-loss drug costs to NC health plan

Luciana Perez Uribe Guinassi
·4 min read
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The top 25 prescribers of costly and popular weight-loss medications accounted for a significant chunk of last year’s spending on those drugs by the North Carolina State Health Plan, which covers hundreds of thousands of state employees and retirees.

Obesity GLP-1 medications, largely Wegovy and Saxenda, which have exploded in popularity in recent years, represented a projected $102 million of approximately $1 billion of the State Health Plan’s net pharmacy spending for 2023, according to Sam Watts, the SHP director.

This means these medications accounted for about 10%, or 10 cents of every dollar, spent by the plan on medications after any rebates provided by pharmaceutical manufacturers.

And according to an analysis of State Health Plan data by The News & Observer, just 25 of over 6,200 prescribers accounted for a disproportionate amount of weight-loss medication prescriptions and costs.

Here’s the breakdown:

  • Taking the rebate into account, the estimated net cost for the plan for weight loss drugs prescribed by these 25 providers in 2023 is over $8 million, or about 8% of all weight-loss medication costs.

Lowering costs on Wegovy and Saxenda

Last year, State Health Plan staff proposed several ideas to rein in what it dubs unsustainable spending on these drugs while keeping them available to members.

But CVS Caremark, the company that negotiates drug prices with manufacturers on behalf of the health plan, shot them down, as previously reported by The N&O.

In October, the State Health Plan board voted to impose a moratorium on new prescriptions of Wegovy, for solely weight loss purposes, effective Jan 1. Members seeking this drug for diabetes and certain other conditions can still get it covered. A final decision on what to do about the drugs is expected to come at the next meeting of the health plan’s board, on Jan. 25.

The moratorium led to the plan being informed by CVS Caremark, the plan’s pharmacy benefit manager or PBM, that it had violated terms and conditions for discounts.

PBMs negotiate discounts with manufacturers and establish agreements and terms for these drug discounts. These agreements are secret even to the State Health Plan.

The violation led to the plan losing its discount for the tens of thousands of its members already taking the medications.

“The board took the action they took because we were going to spend $170 million on GLP-1s in 2024 … and had we been able to keep the rebates the cost would have been about $85 million,” Watts said in an interview with The N&O.

Without the rebates for the grandfathered plan members, the costs are now projected at $135 million in 2024, Watts said.

In an interview about the new data on prescribers, state Treasurer Dale Folwell, who oversees the plan, told The N&O, “We are doing exactly what we told the board of trustees and the taxpayers that we would do on this topic, and that is investigate best practices that other states might be using” to address this issue and to understand why the manufacturers are charging such high costs, especially in comparison to other countries.

He said that more importantly, the plan is investigating why so many prescriptions are coming through the State Health Plan, with 2.6% of all Novo Nordisk’s North American profits on these coming through the plan.

An independent analysis from the Institute for Clinical and Economic Review, a nonprofit that reviews U.S. prescription drug pricing, found Wegovy is not cost-effective at its current price, The N&O previously reported.

But 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 Type 2 diabetes, heart disease and other conditions, The N&O reported. And some doctors and obesity specialists have cautioned against only thinking about these medications in terms of dollars.

Staff writer Teddy Rosenbluth contributed.