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TooTallTom asked a great question yesterday:

There are now multiple (pricey) weight loss medications in the marketplace, but they are rarely covered by insurance.  Since weight loss helps overall wellness, and prevents onset of heart disease, diabetes, etc, when do you think the insurance industry will come around to covering these medications?

I’m going to write in fairly broad generalities.

This is a great question. We need to consider a few things from an insurer’s perspective. First, insurers usually have a contractual obligation to cover drugs that are the standard of care for known and acknowledged diseases. Insurers typically will look at Medicare for guidance/support for this determination. Medicare is not allowed by law to pay for explicit weight loss as an end in and of itself. Medicare can pay for things that aid weight loss as a means to treat something else.

So if we think that explicitly covering weight loss drugs is an optional(ish) decision, we need to think about the business case. We need to think about churn, abandonment and the number needed to treat to avoid a bad event.

We know that quite a few people will start on these drugs and stop taking them within a year. We also know that insurers routinely don’t see people for more than a few years at a time if the policy is fully insured and employers routinely see turnover in their ranks.  This limits the length of time that health gains can be internalized as reduced claims. Finally, losing weight is likely a good thing in preventing other bad events but not everyone who does or does not lose 10% of their body mass will have a negative and expensive event in the next X years.  Figuring out how many people are needed to initiate treatment and then how many months of treatment need to happen for a population to avoid one bad event is a tough challenge.

Now if these drugs were as expensive as 81mg aspirin, the insurers would be more than happy to pay for anyone with a BMI over 30 to take these drugs if they want to.  But these drugs are expensive.  So there is substantial reluctance.

However, Ben Ippolito and Jospeh Levy make a very good point in this month’s Health Affairs as they analyze the estimated costs to Medicare of covering these drugs for people with obesity:

Using Medicare claims, we also documented beneficiaries’ eligibility for nearly identical products approved for different indications…..

The marginal costs of this policy could fall by as much as 62.5 percent from baseline estimates if products were approved for additional indications in coming years because these additional conditions are common among people with obesity. This would increase Medicare spending but would occur regardless of a policy change.

People with obesity are frequently people with other health conditions. Some of those other health conditions are indicated health conditions for these drugs. We likely can apply the same logic to the commercial population where people with obesity are getting prescribed these drugs for other, approved indications and weight loss is an intended but not prescribed for effect.

Weight loss drugs and coveragePost + Comments (41)