Although GLP-1 drugs have good weight loss effects, they have become a financial and ethical test for the US government
海角七号
发表于 2024-1-6 11:12:41
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After the GLP-1 weight loss drug propelled Eli Lilly and Novo Nordisk to become the world's top two pharmaceutical companies by market value, an analyst sitting in an office building in downtown New York predicted with a big wave of his hand that the global market size of GLP-1 drugs will exceed $100 billion by 2030, and 30 million people in the United States alone will need to use this drug, accounting for 9% of the total population.
However, the problem is that the valuation of pharmaceutical stocks has always had an invisible "lid" - the affordability of government backed medical insurance and various health insurance. Faced with the pricing of over $1000 per month for Novartis and Zepbound in the US market, as well as a large number of indications, state and local governments across the country have begun to warn that health insurance budgets will face the risk of being emptied.
According to calculations conducted by JPMorgan Chase at the end of November last year, the weight loss drug market in the United States is expected to reach $44 billion by 2030, up from $5.1 billion in 2023. The question is, from whose pocket did this money come out?
(Source: JPMorgan Chase) Unsustainable burden
First of all, it needs to be emphasized that there is certainly no shortage of diabetes patients or obese people in the American market -25% of young Americans cannot join the military simply because they are overweight. Among the 330 million people in the United States, more than 10% have type 2 diabetes, and the number of obese people may be close to 100 million.
Dale Folwell, the state treasurer in charge of regulating labor health insurance in North Carolina, candidly told the media that the current situation is unsustainable and will crush healthcare plans.
This situation is not an exception in the United States. With the annual growth rate of 50% in the cost of weight loss pills since 2020, Connecticut raised the threshold for health insurance plans to apply weight loss pills in July last year; Virginia also tightened the threshold for Medicaid to use GLP-1 drugs in June last year; Delaware has been warning of a surge in demand for such drugs since last spring.
It should be emphasized that, including Medicaid, most health insurance covers GLP-1 drugs, but only covers type 2 diabetes patients, and does not reimburse for weight loss purposes.
So whether medical insurance can release GLP-1 drugs for weight loss may be a political and financial issue - are taxpayers willing to bear more of the burden for the benefits of weight loss drugs?
According to the latest available data, the US Medicaid program, which covers 85 million people, will spend a total of $7.9 billion on GLP-1 drugs in 2022 (although pharmaceutical companies will also refund some of the funds), equivalent to 8.6% of the total project funding. It is estimated that if all the patients with type 2 diabetes in the Medicaid plan receive prescriptions, this kind of medicine alone will cost 40 billion dollars, which is equal to half of the amount paid by the Medicaid plan for all prescription drugs in 2022.
Now, with the benefits of GLP-1 drug becoming more widely known, "who can use it" has become a moral problem for doctors and health insurance administrators: if a primary school teacher with type 2 diabetes can be reimbursed, can an overweight (undiagnosed diabetes) heart patient get medical insurance coverage? Should the other police officer who developed knee problems due to being overweight also receive reimbursement? Obviously, this drug is so effective, why wait until the patient changes from obesity to diabetes before reimbursement?
The consideration here involves another question: to what extent does the money spent on weight loss pills reduce expenses for other diseases?
Unclear arithmetic problems
Lilly and Novo Nordisk have put forward this logic when promoting weight loss pills: the money spent on weight loss pills now can prevent obese patients from spending more money on more expensive treatments such as heart disease in the long run, so it is worth it.
But those who calculate numbers for medical insurance hold a skeptical attitude.
The Director of the Congressional Budget Office (CBO), Phillip Swagel, has stated that the agency's "rough arithmetic" shows that the cost paid by the state for weight loss pills is not enough to offset other expenses. But Swagel acknowledges that this issue is extremely complex and publicly calls on researchers to conduct more research.
At present, the auditors and financial officers responsible for overseeing the finances of each state are the most proactive in pointing out the financial issues of weight loss pills.
In North Carolina, where Novo Nordisk's US production facilities are located, the state financial officer's office proposed at the end of last year to cancel coverage of GLP-1 drugs used for weight loss. Calculations indicate that by 2030, the state's health plan may lose $1.5 billion due to weight loss pills, while the reduced "obesity related medical expenses" during this period are only $99 million.
At a meeting of the state health planning committee discussing the issue, a woman pleading to maintain the plan stated that her increased weight had led to a medical condition that could cause her blindness. In order to lose weight, she tried diet control, exercise, and weight loss surgery - but in the end, only Novo Nord's medicine worked.
In the end, after 90 minutes of discussion, the committee voted to pass a compromise: members of the health plan who are already using these drugs to lose weight will continue to have coverage, but new patients must pay for the drugs themselves or have no access to them at all.
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