Medicare may cover weight loss drugs if they are used for additional health benefits

Boxes of Wegovy manufactured by Novo Nordisk in a pharmacy in London, Britain, on March 8, 2024.

Hollie Adams | Reuters

Medicare may begin covering certain weight-loss drugs for the first time as long as they are approved for an additional health benefit, the Centers for Medicare & Medicaid Services said Thursday.

This opens the door to broader coverage of some very popular weight loss medications, such as Nordisk's Wegovy, which is now approved in the US for heart health. Demand for these treatments has skyrocketed over the past year despite their high prices and spotty insurance coverage.

Under new guidance from CMS, Medicare Part D plans can cover obesity treatments that receive approval from the Food and Drug Administration for an additional health benefit. Medicare prescription drug plans run by private insurers, known as Part D, currently cannot cover those drugs alone for weight loss.

The agency's guidance means that Medicare patients could soon get coverage for Wegovy, as long as they have obesity and a history of heart disease and are prescribed the treatment to reduce their risk of heart attacks and strokes. Earlier this month, the Food and Drug Administration approved Wegovy for that purpose.

But the guidance will also open the door to future coverage of other weight-loss medications, many of which are being tested for additional health conditions.

Drug manufacturers such as Novo Nordisk, which also makes the diabetes drug Ozempic., and Eli Lilly They are studying their weight-loss medications as treatments for fatty liver disease, chronic kidney disease, sleep apnea, and more. Those drugs would have to return results from late-stage trials and then be submitted for FDA approval for those uses.

Wegovy is part of a class of medications called GLP-1, which mimic a hormone produced in the intestine to suppress a person's appetite and help regulate blood sugar. The coverage of these treatments when used for weight loss is heterogeneous.

About 110 million American adults live with obesity and about 50 million of them have insurance coverage for weight-loss medications, a Novo Nordisk spokesperson said in a statement last week.

Some of the nation's largest insurers, such as CVS Health's Aetna, also cover the treatments.

But many employers don't. An October survey of more than 200 companies by the International Foundation for Employee Benefit Plans, or IFEBP, found that only 27% provided coverage for GLP-1 for weight loss, compared to 76% that covered those. diabetes medications. Notably, 13% of employers indicated they were considering coverage for weight loss.

A provision in a 2003 law stated that Medicare Part D plans cannot cover medications used for weight loss, but the program does cover obesity screening, behavioral counseling and bariatric surgery. A bipartisan group of lawmakers has introduced legislation that would eliminate the provision, but its fate in Congress is far from certain.

A CMS spokesperson told CNBC last week that Medicaid programs should cover Wegovy specifically for its new cardiovascular use. By law, Medicaid must cover almost all FDA-approved medications, but weight loss treatments are among a small group of medications that can be excluded from coverage. About one in five state Medicaid programs currently covers GLP-1 weight loss medications.

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