Radar on Drug Benefits

In a move cheered by health insurers, President Donald Trump’s administration said on April 4 that it decided not to implement the part of a proposed rule that would have significantly expanded Medicare and Medicaid coverage of weight-loss medications. But whether the administration will ever reconsider its stance is anyone’s guess, experts say. 

In its proposed Medicare Advantage and Part D rule for the 2026 contract year, issued in November 2024, former President Joe Biden’s administration sought to reinterpret the Social Security Act’s longstanding, statutory Part D coverage exclusion of drugs “used for anorexia, weight loss, or weight gain.” In doing so, drugs used to treat obesity — like the GLP-1 Wegovy (semaglutide) — would then have to be covered by Medicaid. 

Health insurers have largely resisted mandates to cover drugs for weight loss, notably opposing a now-scuttled rule that would have applied to Medicare Part D and Medicaid. But in North Dakota, the dominant Affordable Care Act exchange insurer ended up supporting the state’s effort to become the first to add GLP-1s that treat obesity to its essential health benefit (EHB) plan. 

“We’re a pretty small health insurer by national standards…we’re a nonprofit mutual. So yeah, the financial risk was daunting,” Dan Conrad, president and CEO of Blue Cross Blue Shield of North Dakota, said during a webinar hosted by Modern Healthcare on March 30.  

President Donald Trump’s administration on April 4 abandoned a proposal from Joe Biden’s administration that would have expanded Medicare and Medicaid beneficiaries’ access to obesity drugs, including the popular but costly GLP-1 medications.

Data from MMIT Analytics shows that fewer than 4% of Medicare enrollees have plans that put  Wegovy (semaglutide) and Zepbound (tirzepatide) — GLP-1s that were approved for weight loss — under the preferred/preferred (prior authorization and/or step therapy) tier and covered/covered (PA/ST) tiers, as of April 2025 (AIS Health is a division of MMIT.) While Medicare Part D plans are barred by statute from covering weight-loss medications, such plans can cover those when they are approved for other indications, like reducing the risk of stroke or heart attack in patients with obesity.

Glucagon-like peptide-1 (GLP-1) receptor agonists, particularly Novo Nordisk’s Wegovy (semaglutide) and Eli Lilly’s Zepbound (tirzepatide), have made a significant difference for patients with obesity, on top of netting blockbuster sales for the two manufacturers. But the enormous market size is proving to be unsustainable for payers, leading the Institute for Clinical and Economic Review (ICER) to suggest additional ways to handle the costs of the drugs.

The U.S. drug-pricing watchdog released a white paper on April 9 meant to examine strategies to ensure affordable access to the medications. The group has previously assessed the cost-effectiveness of the class of drugs and found them mostly overpriced. The July 2022 report found that Wegovy and Novo Nordisk’s Saxenda (liraglutide) did not meet cost-effectiveness benchmarks, while Vivus’s Qsymia (phentermine/topiramate) and Currax Pharmaceuticals’ Contrave (bupropion/naltrexone) were more cost-effective. Wegovy and Qsymia were the more effective of the four, with Qsymia having a wholesale acquisition cost that was a fraction of Wegovy’s. The review preceded the approval of Zepbound, but high costs remain a concern especially for Wegovy and Zepbound.

Since the FDA approved Journavx (suzetrigine) earlier this year for moderate to severe acute pain, a few payers have announced they would cover the medication, which offers an oral, non-opioid option for people who are at risk of developing opioid use disorder (OUD). Although Journavx’s list price is more than 20 times higher than some generic opioids, David Rind, M.D., chief medical officer at the Institute for Clinical and Economic Review (ICER), says the new medication has a “completely reasonable price” and is “almost certainly high value.”  

Rind adds that ICER “almost always” recommends that pharmaceutical companies “should discount their prices.” However, in this case Rind says that Vertex Pharmaceuticals, Journavx’s manufacturer, “should be commended for fair pricing.” Journavx has a wholesale acquisition cost of $15.50 per tablet or $232.50 for a weekly regimen of two pills per day, which is significantly below ICER’s cost-effectiveness threshold of $4,500 to $6,500 per week. Rind notes that generic opioids cost about $10 per week.