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House Budget's new math on weight-loss drugs

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Feb 7, 2024
Illustration of a pile of paper prescriptions.

Illustration: Shoshana Gordon/Axios

With one unanimous vote, the House Budget Committee this week may have significantly boosted the prospects for legislation to extend Medicare coverage to blockbuster weight-loss drugs.

Why it matters: That could extend to GLP-1 drugs approved for weight loss like Wegovy, which can cost tens of thousands of dollars annually and currently aren't covered by Medicare.

  • The FDA says the treatments could reduce the risk of heart disease, stroke, diabetes and certain types of cancer.

Don't forget: The CBO, in an October blog post, warned that legislation like the Treat and Reduce Obesity Act to expand federal coverage of the drugs would drive up overall federal spending by adding significant costs to Medicare over the next decade.

Details: The Budget Committee's legislation would allow the CBO not only to factor in cost savings but also to score bills past its customary 1o-year window, to as much as 30 years.

  • Bigger savings over a longer period might ease some lawmakers' concerns about increasing Medicare spending and threatening the program's insolvency.
  • "It would probably save lives because we would be able to approve health care that actually prevents disease rather than the other way around," Rep. Diana DeGette, the bill's Democratic cosponsor, told Axios.

By the numbers: The Treat and Reduce Obesity Act doesn't have a CBO score yet, though lawmakers have requested a number.

  • Wegovy is estimated to have an annual net price of $13,600.
  • A recent study estimated that if 10% of Medicare beneficiaries with obesity used Wegovy, the annual cost to Medicare could be as much as $26.8 billion, based on varying estimates of obesity rates in seniors.
  • For context, Medicare spent $98 billion on all Part D prescription drug benefits in 2021, KFF noted.

The intrigue: Health policy experts say there's still not enough evidence that obesity drugs would actually result in Medicare savings.

  • "We know for sure that expanding Medicare's coverage of anti-obesity medications would increase program spending initially," said Juliette Cubanski, deputy director of the program on Medicare policy at KFF.
  • The hope, she added, is "people who take these medications would have improved health outcomes as a result, and in theory, that could reduce future health care spending,"
  • But she and others note that although the drugs have been used to control diabetes for years, they haven't been in use long enough for weight loss to calculate long-term budgetary effects.
  • In fact, questions remain about how the drugs work, including how long patients should stay on them.

Jackson Hammond, health care policy analyst at the American Action Forum, said evidence shows that in general, only about 20% of all preventive medicine measures are effective at both preventing bad health outcomes and saving money.

  • Then there's the question of how long the drugs need to be taken to continue getting health benefits and keep weight off, said Stacie Dusetzina, health policy professor at Vanderbilt University.
  • "While the clinical data on some of the outcomes is really good … having to take those chronically does put a big question mark on what that means for long-term savings," she said. "You have to continue to spend money to get those benefits."
  • What's more, preventive measures that make people live longer will also keep them on Medicare longer and cost the government more money.

Yes, but: The longer that weight loss drugs are on the market, the greater the odds their cost could go down, because of the emergence of generic options or other factors like Medicare drug price negotiations.

Of note: The Budget Committee leaders said during the legislative markup Tuesday that they were planning to rename the bill after Rep. Michael Burgess in honor of his long-standing work on the subject.

What we're watching: Lawmakers were optimistic that they can get the Preventive Savings Act to the House floor, especially since it's seen as a legacy item for Burgess, who is retiring at the end of this Congress.

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