Pricing Watchdog Ranks Weight-Loss Injections as Cost-Effective

A leading drug pricing organization has announced that GLP-1 weight-loss injections are becoming more cost-effective as their prices decline and research highlights their cardiovascular benefits. The Institute for Clinical and Economic Review (ICER) released a draft report on October 10, 2023, granting its highest cost-effectiveness rating to two prominent medications: semaglutide, marketed as Ozempic and Wegovy by Novo Nordisk, and tirzepatide, sold as Mounjaro and Zepbound by Eli Lilly.

The report underscores the growing affordability of these widely prescribed drugs, particularly in light of a previous analysis in April that called for efforts to reduce their costs. ICER’s Chief Medical Officer, Dr. David Rind, noted, “Prices have come down a ton,” but emphasized that high demand poses challenges for payers regarding affordability.

Obesity is a significant concern in the United States, with approximately 40% of adults classified as obese, according to the Centers for Disease Control and Prevention. A recent study revealed that U.S. spending on GLP-1 medications reached nearly $72 billion in 2023, reflecting their increasing popularity and financial impact on healthcare budgets.

Comparative Effectiveness of GLP-1 Drugs

ICER’s analysis suggests that while there is promising evidence that tirzepatide may be more cost-effective than semaglutide, the findings remain inconclusive. Dr. Rind stated, “We know for certain that tirzepatide has greater weight loss and strongly suspect fewer gastrointestinal side effects.” However, the long-term cardiovascular outcomes of these drugs remain uncertain, particularly their potential to reduce the risk of serious heart problems.

Clinical trials have demonstrated that semaglutide significantly lowers major cardiovascular events and mortality risk in obese patients with heart disease. In contrast, tirzepatide has been shown to lower risks associated with a common type of heart failure among obese adults.

ICER’s previous report, released before the approval of tirzepatide for weight loss, rated the cost-effectiveness of semaglutide slightly lower than its current evaluation. The organization also noted that an oral version of semaglutide, currently under regulatory review, is likely to be cost-effective compared to lifestyle modifications. However, it expressed uncertainty regarding its value compared to the injectable formulation.

Market Dynamics and Future Considerations

The estimated annual net price for Novo Nordisk’s semaglutide is currently $6,830, a significant reduction from $13,618 in 2022. Eli Lilly’s tirzepatide has a net price of approximately $7,973, with a U.S. list price near $13,000. Both companies are marketing their drugs directly to consumers for about $6,000 annually.

ICER plans to hold a public meeting to discuss the draft report in November, after which it will issue a final analysis. As the healthcare landscape evolves, more than half of large U.S. employers intend to reduce healthcare benefits in the coming year due to rising costs associated with weight-loss and specialty medications, as revealed in a recent survey by consulting firm Mercer.

Dr. Rind remarked that the cost-effectiveness of GLP-1 medications remains “a moving target,” particularly with ongoing studies and negotiations regarding their pricing under the federal government’s Medicare plan. The price for these drugs is expected to be announced in November.

For individuals without insurance coverage for GLP-1 medications, Dr. Rind noted that the direct-to-consumer option can be a wise investment for those who can afford it. Nevertheless, he highlighted the disparity in access, stating, “We’re not providing resources to many of the people who would most benefit from these therapies.” He emphasized the need for a systematic approach to improve affordability across the patient population.