NC state health plan votes to end all coverage for Wegovy and other weight-loss drugs

NC state health plan votes to end all coverage for Wegovy and other weight-loss drugs The North Carolina State Health Plan will phase out coverage of existing prescriptions for popular weight-loss drugs, including Wegovy, as of April 1, 2024. That was the 4-3 decision of the plan’s governing board at its quarterly meeting Thursday. The NC State Health Plan covers more than 700,000 state employees, retirees and their family members. Over the past year, Wegovy became the drug it spends the most on – about 10 cents on every dollar it pays for prescriptions. Demand for weight-loss drugs, also called GLP-1 drugs, has surged in recent years due in part to a surge in advertising and celebrity testimonials. The state health plan covered 5,000 prescriptions for the drugs at the beginning of 2023. By the end of the year, that number had quintupled, and plan administrator Sam Watts said the exponential growth in usage was predicted to continue in 2024 unless the plan took steps to limit it. The board voted in October 2023 to drop coverage for new prescriptions of Wegovy, Saxenda and Zepbound as of Jan. 1, 2024, but to continue to cover prescriptions written before that date. Nearly 25,000 members were grandfathered in. But the decision to cut coverage caused the state to lose a 40% rebate offered by Wegovy and Saxenda’s manufacturer, Novo Nordisk, through its contract with the plan’s pharmacy benefits manager, CVS/Caremark. That contract says the plan is ineligible for the rebate if it limits utilization in any way. The loss of the rebate means that, instead of paying $85 million for the grandfathered prescriptions, the state health plan would have to pay full price – $139 million – in 2024. That’s a difference of $54 million. “But that is less than the $170 million that we would have spent otherwise” if they continued to cover new prescriptions, state health plan administrator Sam Watts said. Watts predicted that cost would have necessitated a hefty monthly surcharge of around $48.50 on every plan member, whether they used the drugs or not. During the public comment period, one state employee asked the board not to phase out coverage. Maghae Ray said she has two chronic conditions that will become worse if she gains weight, and Wegovy is the only thing that’s worked to help her keep it off. Watts put the blame squarely on Novo Nordisk. He said they had tried to negotiate to limit coverage only to those who needed it most, or tighten requirements for prior authorization of the drugs, but Novo Nordisk refused to allow the plan to keep its rebate if it imposes any limitations. With the rebate, the state was paying $800 for a month of Wegovy. Without the rebate, it costs $1,350. “We either have to cover it for everyone with no restrictions or we simply cannot afford it,” Watts said. “It comes down to almost extortion to say, if you won’t do this, we won’t give you the rebate for your existing prescriptions,” said board member Wayne Fish. “That’s like getting held up at gunpoint in a back alleyway.” On Tuesday, a Novo Nordisk spokesperson issued a statement. “Denying patients insurance coverage for important and effective FDA approved treatments for obesity is irresponsible,” the Novo Nordisk’s statement reads in part. The statement also says Novo Nordisk opposes “creating new hurdles for patient access to care.” “We urge Treasurer Dale R. Folwell and the [North Carolina State Health Plan] to reconsider this decision and put patients first,” Novo Nordisk’s statement reads. “These are hard decisions,” Fish added. “I’ve never liked the idea of cutting someone off cold turkey, but again, if we don’t do something, where will this plan be in a couple of years?” Board member Dr. Pete Robie pointed out that the cost of Wegovy in the U.S. is nearly four times its cost in Europe. “What are we really paying for?” Robie asked. “Stock options? Dividends?” “I agree that what Novo Nordisk is doing and what CVS/Caremark is doing is unconscionable,” said board member Dr. Melanie Bush, “but I don’t feel like state employees should have to pay the price.” Bush argued that the plan should maintain coverage of the existing prescriptions while negotiations continue. “This is a life-saving drug, and we’re talking about denying it.” Board member Rusty Dukes moved to end all coverage April 1, even grandfathered prescriptions. “This will let [Novo Nordisk] know we’re serious,” Duke said. “Has anything changed since October? Nothing.” Board members agreed the vote could be reconsidered if Novo Nordisk and CVS/Caremark come to a compromise. On Thursday, Caremark spokesman Phil Blando provided WRAL News with a statement. “CVS Caremark’s sole priority is negotiating the lowest net cost of weight-loss drugs, based on the State Health Plan’s coverage choices, for North Carolina’s teachers and public servants,” Blando wrote. “Our negotiations with the drug manufacturers, including Novo Nordisk and Eli Lilly, have been underway for several months. “Drug manufacturers need to stop dragging their feet and agree to offer their medicines at a fair price to North Carolina’s public servants.” Blando said he believes drug manufacturers can chose to lower the cost of weight-loss drugs and offer relief to the state health plan . “We pass through 100% of any rebates the manufacturer offers to the North Carolina State Health Plan,” Blando wrote. “Our clients receive manufacturer rebates when coverage for a drug meets certain terms and conditions, including inclusion on the formulary. “If the terms and conditions are not met, CVS Caremark is not able to collect a rebate for its client.” Watts said negotiations with Novo Nordisk and the pharmacy benefit manager continue. “We have seen movement, but not enough movement to say, ‘Yes we have a solution,'” he said. The decision will put a dent in Novo Nordisk’s bottom line. The state health plan is one of its larger North American customers. A spokesman for Novo Nordisk did not immediately respond to a request for comment.

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