Russell Wooten of Hendersonville, North Carolina, has spent most of his life struggling with obesity, often carrying 260 pounds on his 5-foot-10 frame. He repeatedly starved himself to lose weight and then gained weight by gorging on comfort foods. The cycle left him feeling “depressed and distraught”.
In February 2023, Wooten began taking Wegovy, one of a class of drugs called GLP-1. These drugs, long prescribed to patients with type 2 diabetes and cardiovascular disease, balance blood sugar levels but also reduce hunger signals and may lend a hand people lose weight.
Wegovy helped Wooten, a custodian at a local public school, lose 40 pounds. But his joy was short-lived: Last April, North Carolina’s health plan for teachers and other public employees stopped covering the weight-loss drug. Wegovy’s list price is $1,300 a month – much more than Wooten can afford on his $45,000 salary.
“It worked for me. I was exercising. “I felt better than I had in a long time,” Wooten, 54, said. “It’s like someone gave you a Ferrari and then took it away.”
The rapid escalate in the popularity of weight loss drugs is quickly becoming a problem for the state budget. When deciding whether to cover drug costs, policymakers must choose between the long-term benefits of reducing obesity among public sector workers and their families – which could reduce spending on treating chronic diseases – and the short-term costs.
Separately, 13 state Medicaid programs, including North Carolina’s, have chosen to cover GLP-1 for the treatment of obesity. However, Medicaid is funded jointly by the federal government and states, and drugmakers are required to offer significant discounts on these programs in exchange for covering the cost of their products. Insurance plans covering public sector employees largely have to cover the costs themselves.
About a dozen states last year, legislation was considered that would add GLP-1 weight loss drugs to state health plans, Medicaid or policies offered in markets covered by the Affordable Care Act. Most didn’t make it or didn’t advance. West Virginia, like North Carolina, used to sell drugs to state employees but has stopped doing so. However, his move affected far fewer people because his initiative had a confined pilot program.
Meanwhile, Illinois last year approved insurance for its public employees, and Connecticut officials say they will continue to insure drugs despite the high price tag, which they started doing in 2023.
“North Carolina is wrong because when workers are healthy, they are more productive,” said Connecticut State Controller Sean Scanlon, a Democrat.
Costs and benefits
Nicholas Pennings, M.D., chair of family medicine at Campbell University in Buies Creek, North Carolina, noted that many patients on a public health plan regained the weight they had lost after discontinuing GLP-1 coverage. That’s because obesity is a chronic disease that can be caused by genetic factors, emotional dependence and lack of access to vigorous foods, Pennings said.
In North Carolina, where 70% of residents are overweight or obese, foods like barbecue pork and peach cobbler are part of the local culture. Pennings said he has patients, including children of government workers, who are doing well on GLP-1 but are now at risk for diabetes.
North Carolina’s health plan, which covers nearly 750,000 employees, retirees and their dependents, began paying for GLP-1 weight loss drugs in 2015. By 2023, 23,215 beneficiaries were using drugs, up from 2,795 in 2021, an escalate of 731%. With various health plan discounts and rebates, it was projected that $170 million would be spent on drugs in 2024.
The state health plan spends a total of about $4.13 billion annually to provide coverage to people who work for state agencies, universities, local colleges and local school systems. Of that total, state taxpayer dollars cover approximately 84% the rest is covered by employee contributions.
Researchers say that in the long run, coverage of weight-loss medications could result in lower spending on obesity-related chronic diseases such as diabetes, heart disease and some types of cancer. But Dale Folwell, a former North Carolina state treasurer who was in office when the plan stopped covering the drugs, said it’s an investment the state can’t afford.
“The whole issue of weight-loss drugs and their prices hit us like a top-of-the-line gas-powered dragster going 500 miles an hour,” Folwell said. “It’s not an emotional thing, it’s not political, it’s mathematical.”
State health plan currently has a deficit of $507 million. Pharmacy benefit managers, intermediaries in the drug supply chain, should utilize their bargaining power to negotiate lower drug prices, and Folwell said the state’s PBM has secured rebates on weight-loss drugs. But it wasn’t enough.
Brad Briner, who replaced Folwell as treasurer earlier this month, said the state is considering cutting costs by limiting coverage to the highest-risk patients, but the state’s current contract with the PBM does not allow it. He hopes the next PBM contract will provide more flexibility and that the state will resume drug funding for at least some patients next year.
Meanwhile, Briner said eliminating insurance was the right decision.
“We need to balance the books before we add GLP-1 again,” said Briner, also a Republican.
As in North Carolina, more than 70% of West Virginians are overweight or obese. The state Employment Insurance Agency, which oversees the state’s health care plan, ended its diminutive pilot program of about 1,100 people in March 2024 because of cost and supply concerns.
The agency said in an email that the program costs $1.3 million per month. If it expanded coverage to all potential eligible members, or about 70,000 people, the projected cost would be more than $1 billion a year.
Dr. Laura Davisson, director of the Medical Weight Management program at West Virginia University, one of the sites in the obesity treatment pilot program, wrote in an email to Stateline that her patients experienced an average 15% weight loss, which is “three times more weight than purely lifestyle-based programs.”
“The challenge is that the benefits of treating obesity, such as preventing long-term complications, may not become apparent for several years,” Davisson wrote to Stateline.
Staying the course
In Illinois, Democratic Gov. J.B. Pritzker pushed to provide public sector workers with coverage on weight-loss drugs. The Pritzker administration estimates it will cost the state $210 million in the first year, but some economists say the cost will likely be just as high as three times higher.
In Connecticut, the cost of weight loss drugs for public sector workers has skyrocketed from $7.7 million in 2020. last year it was estimated at $40 million. There are approximately 270,000 beneficiaries of Connecticut’s health care plan.
In an attempt to control costs, in 2023 the state began requiring patients seeking a GLP-1 prescription for weight loss to first enroll in telehealth program to lend a hand them make lifestyle changes instead of using medications.
Scanlon, the state comptroller, said the program has reduced its utilize of GLP-1, but enrollment is growing. Now the state is looking for another solution, he said.
“Our North Star is always there to care for people who want to get the help they need and deserve,” he said.
One thing Scanlon isn’t counting on is that GLP-1 drug prices will drop in the near future, Scanlon said.
“Trying to convince the manufacturers of these drugs to make them cheaper is like trying to convince my 2-year-old and 5-year-old not to want to eat candy in a candy store,” Scanlon said.
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