The Cost of Obesity Drugs
The cost of obesity drugs like Ozempic, Wegovy, and Mounjaro are expected to skyrocket in the coming years. Morgan Stanley projects a 166% increase in sales year over year. And in the next 7 years sales are expected to increase 1,035%.¹
For information about the science of GLP-1, check out this article. For this analysis, we will review the potential costs to payors who are going to cover these drugs.
Who is Eligible For Obesity Drugs?
With the FDA’s labeling instructions for weight-loss medications such as Saxenda, Wegovy, and potentially Mounjaro (when approved for obesity), a significant portion of the U.S. population becomes eligible for these treatments. Specifically:
- These medications are indicated for individuals with a BMI of 30 or higher, or a BMI of 27 or higher when accompanied by at least one weight-related comorbidity diagnosis. This can include conditions such as Type II diabetes (which affects an estimated 12% of adults), hypertension (over 40% prevalence), and high cholesterol.
- If we conservatively estimate that two-thirds of the 31% of adults in the BMI 25-29.99 range have a BMI of 27 or higher, and that 50-60% of this group has at least one of these weight-related diagnoses, we arrive at a startling figure:
- Approximately 55% to 60% of the average commercial age population in the U.S. is eligible for these medications per the FDA labeling instructions.
Phrased another way, an estimated 11 in 20 American adults are eligible for a Wegovy or Saxenda prescription per FDA medication guidelines.
How Much Do Obesity Drugs Cost?
At present, GLP-1 drugs cost between $1,035-$1,800/month. Broken down by brand:
- Ozempic: $900/Month
- Wegovy: $1,400/Month
- Mounjaro: $1,350/Month
- Saxenda: $1,350/Month
- Trulicity: $1,400/Month
Morgan Stanley expects more companies to enter the obesity medicine market, which will likely lead to lower prices for these drugs. For 2023, Morgan Stanley estimates that the average price for a prescription, after considering patient support programs like co-pays, will be $741. The actual price of the drug, before these support programs, is expected to be $950 per prescription.
Morgan Stanley thinks that Eli Lilly will choose a consistent pricing strategy for its drug, tirzepatide, whether it's prescribed for diabetes or obesity. Morgan Stanley anticipates that Novo will need to lower its prices to match those of tirzepatide to keep its drugs on insurance plans. They also expect Novo's Rybelsus 50mg to be available for both diabetes and obesity treatments.
Looking ahead, Morgan Stanley predicts that by 2025, the price for GLP-1 medicines will drop to $450 per prescription, and by 2030, it will further decrease to $350 per prescription.
Additionally, as big pharmaceutical companies like Pfizer, Merck, and Novartis enter the obesity medicine market, especially with new types of drugs (small molecules), Morgan Stanley expects that this could push prices down even more due to increased competition.
There are currently 23 obesity drugs in the pipeline from pre-clinical to phase iii trials².
What Are My Options?
When it comes to offering these drugs, many payors feel stuck.
On one hand, 44% of employees in a recent survey stated they would leave their job for an employer who offered these medications. The cultural and health related related factor with these drugs is unlike any other. So not offering a benefit that may be viewed as more popular that retirement benefits might put employers at a disadvantage.
On other hand covering these medications will certainly skyrocket health costs substantially in the next 5 years. And the long term benefits remain to be seen if individuals come off the drug.
BioCoach has developed a third option, which is to allow coverage - but setup the patient for success and gives payors strategies to manage costs.
Combined with our CDC recognized diabetes prevention program - BioCoach offers prevention and treatment of diseases related to metabolic health like diabetes.
What's Your GLP-1 Strategy?
The next 24 months employers are going to see skyrocketing claims cost. Enter your information here to see how BioCoach can support your employees while on the drug, and contain costs in the long run.