The weight loss drug, Wegovy, recently received a supplemental cardiovascular indication from the FDA, allowing certain Medicare beneficiaries who meet weight and cardiovascular risk criteria to access the drug. While Medicare is currently prohibited from covering obesity medications, this new indication could open the door for coverage by health plans under Medicare Part D.
Only 20% of state Medicaid agencies currently allow coverage for weight loss drugs, but with the added cardiovascular indication on Wegovy, Medicaid plans will now be required to include the drug on their reimbursed list. However, patients may still have to go through step edits to try cheaper alternatives before being able to access Wegovy.
Despite the potential for Medicare plans to cover Wegovy, the drug may not be included in formularies due to not falling under protected drug classes. Decision-making for coverage may be cautious, with less than 50% of insurers in the commercial sector currently covering Wegovy.
The sub-population of Medicare beneficiaries eligible for coverage may be limited, as the cardiovascular indication is based on clinical trial data from participants at severe risk for cardiovascular events. However, the absolute risk reduction of major cardiovascular events with Wegovy was relatively small, potentially raising concerns for insurers considering the value proposition of covering the drug.
Payers may also be worried about low persistence rates among patients taking obesity medications, as studies have shown that only 40% of patients taking semaglutide-based products were persistent at one year. A real-world analysis demonstrated even lower persistence rates. This could raise questions about the long-term effectiveness and cost savings associated with covering Wegovy for at-risk Medicare beneficiaries.
While the addition of a cardiovascular indication on Wegovy will allow access for certain Medicare beneficiaries, it is expected that coverage by Medicare plans will come with strict restrictions. The effectiveness of the drug in reducing cardiovascular events, along with concerns about patient persistence and cost savings, may influence decision-making by insurers and lead to limited coverage for this population.
