How a state is trying to make weight loss drugs cheaper

Dale Folwell says North Carolina is under siege from drugmakers Novo Nordisk and Eli Lilly.

North Carolina’s treasurer said the high costs of popular weight-loss drugs Novo Nordisk’s Wegovy and Saxenda and Eli Lilly’s Zepbound have financially strained the health insurance plan of his more than 750,000 teachers, state employees and retirees, forcing it to stop providing drug coverage earlier this year.

Last year, North Carolina paid for weight-loss drugs for nearly 25,000 state employees, costing it more than $100 million, according to the state treasurer’s office. about 10% of their total spending on prescription drugs and more than the plan spent on all cancer treatments combined. .

Weight loss medications are projected to cost North Carolina more than $600 million more over the next five years. That ballooning spending prompted the states’ health plan’s board of directors to vote in January to stop covering them in the states’ health care plan.

This is not how Folwell wanted it to go.

Last fall, in a last-ditch effort to reduce states’ spending on weight-loss drugs, Folwell, working alongside the states’ pharmacy benefit manager CVS Caremark, began drug price negotiations with Novo Nordisk, followed later by Eli Lilly. Negotiations are ongoing.

“I can’t remember any time since I’ve been in charge of the public purse in the last eight years that we’ve tried to have direct conversations with the manufacturers of any drug,” he said.

Novo Nordisk charges a monthly list price of about $1,350 each for Wegovy and Saxenda, while Lilly charges about $1,060 a month for Zepbound. North Carolina receives a rebate from drug manufacturers that lowers those prices by a few hundred dollars; however, the state says the drugs are too expensive to afford.

This drug can cost anywhere from $10 to $70 to manufacture, and retails for more than $1,000, Folwell said. I don’t know what word in Websters dictionary would describe it better than being nailed.

Folwell also proposes that the state health plan raise the minimum body mass index, or BMI, threshold to qualify for the drugs, reserving it for people with severe obesity. The Food and Drug Administration approved the drugs for patients with a BMI of 30 or more, which is characterized as obese, not severely obese. It also wants to limit the amount of time people can stay on the drugs if they aren’t effective.

Negotiations in progress

Folwell comes to the bargaining table with one number in mind: $300. That’s around the price, he said, that people pay in Denmark, where Novo Nordisk is based.

When the price of this drug was being taxed compared to what it costs in the country of origin where this company is headquartered, we need to take action, he said.

In separate statements, Novo Nordisk and Eli Lilly said they are committed to working on possible solutions to provide coverage to patients in North Carolina.

But Nicole Ferreira, a spokeswoman for Novo Nordisk, said in the company’s statement that the state rejected multiple viable options presented to them.

Denying patients insurance coverage for important and effective FDA-approved treatments is simply irresponsible, he said.

If the state had continued to cover the drugs under the current agreement, monthly premiums for all state employees in the plan likely would have doubled, Folwell said. Depending on their plan, people typically pay a monthly premium of $25 or $50.

Ferreira said we are committed to finding meaningful solutions to manage costs.

In a statement, an Eli Lilly spokesperson said: We remain committed to expanding access and continue to explore different approaches with PBMs, health plans and employers, referring to pharmacy benefit managers, who act as intermediaries between manufacturers of medicines and insurers.

We remain cautiously optimistic that ongoing negotiations with CVS Caremark and the drug manufacturers will result in affordable costs for these drugs, a spokesman for the state treasurer’s office said.

North Carolina isn’t the only state plan that has covered weight-loss drugs and been forced to make a change.

Connecticut recently limited weight-loss drugs to state employees who also agreed to follow lifestyle changes, diet and exercise, a move that Sean Scanlon, the state comptroller, said has helped reduce costs.

When asked about negotiating with drug makers, Scanlon said he’s watching what’s happening in other states.

But in my experience, these drugmakers who do it have a lock and are making a ton of money and don’t have much incentive to do it, he said. So they weren’t sitting around waiting for the big drug companies to start being altruistic.

Patients left behind

The ongoing negotiations are of little comfort to North Carolina state employees who lost their drug coverage in early April.

Leanne Owens, a primary care provider in Hillsborough, North Carolina, treats patients enrolled in the states health plan. In recent weeks, he has received panicked calls from medication patients about what to do next.

My patients were very afraid of coming off these medications, the weight gain, their relationships with food, he said.

One of his patients, Skylar Hackney, a 26-year-old state employee who works for public schools, was prescribed Wegovy a year ago and has since lost 50 pounds.

Skylar had prediabetes and says her condition could turn into diabetes, allowing her access to semaglutide again. Semaglutide is the active ingredient in Wegovy and Novo Nordisks diabetes drug Ozempic, which is often used off-label for weight loss. North Carolina is not cutting off access to diabetes drugs.

He made his last shot of Wegovy last Thursday. If it can’t get more, Shell will be forced to give up.

I wish I didn’t have to start over, Hackney said. Just because anything you put in your body that’s new or that you’ve been off for a while, you have some side effects that aren’t great. But I like to have gotten to a point where I’m on the highest dose of the Wegovy, which I like to level out. And it’s been wonderful.

CORRECTION(April 25, 2024, 9:18 AM ET): An earlier version of this article misstated how many people are in the North Carolina state employee health insurance plan. That’s more than 750,000 people, not 700,000 people. The article also misstated what people pay as a monthly premium. It’s $25 or $50, not $37.

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