Newly Approved Obesity Drug Wegovy Holds Promise, But Faces Reimbursement Challenges

On Friday, June 4th, the Food and Drug Administration (FDA) approved Novo Nordisk's obesity medication Wegovy (semaglutide), a glucagon-like peptide 1 receptor agonist, to be injected subcutaneously once-weekly. Wegovy is a higher-dose - 2.4 milligrams - variant of the diabetes medication Ozempic (semaglutide).

Newly Approved Obesity Drug Wegovy Holds Promise, But Faces Reimbursement Challenges

Wegovy is indicated for adults who are overweight (body mass indicator ≥30) or overweight (body mass index ≥27), and who have specific weight-related health conditions, such as type 2 diabetes, hypertension, and elevated cholesterol. The drug is to be used for long-term weight control in conjunction with a reduced calorie meal plan and increased physical activity.

FDA accepted Wegovy based on stage 3 data which showed that Wegovy assisted 33% of patients lose more than 20 percent of their body weight over a 68-week clinical trial period. The high-dose variant of all semaglutide is a first of its type obesity medication in that it is dosed on a once-weekly basis.

The Wegovy approval continues a trend where manufacturers of diabetes medications induce them to treat different conditions which are common in diabetic patients. So, for instance, the diabetes drugs Jardiance (empagliflozin) and Victoza (liraglutide) now have approvals for lowering the chance of heart attack, stroke and death in cardiovascular patients.

Obesity affects over one-third of adults in the U.S.. Since 1980, the obesity rate among adults has more than doubled. Reversing the trend has proven hard. Though essential to successful weight loss programs, exercise and diet often need to be supplemented by clinical interventions, such as surgery and pharmaceutical therapies.

Wegovy increases the armamentarium of pharmacologic treatments targeting weight loss, which in the past decade has enlarged to comprise Saxenda (liraglutide), Contrave (bupropion/naltrexone), and Qysmia (phentermine/topiramate).

Novo Nordisk hasn't revealed Wegovy's list price, but hinted that it will be similar to the price of its drug Saxenda, a weight reduction treatment that retails at $1,300 per month without insurance. Saxenda is said to assist patients lose 5% of the body weight on average. In research published by Novo Nordisk, participants carrying Wegovy had an average weight loss of 15% of the body weight.

Although Wegovy holds promise, it will likely have to compete with uptake challenges. Sales of weight loss drugs have disappointed for decades.

Lingering safety doubts persist following several high-profile withdrawals, for example, combination medication fenfluramine/phentermine at 1997, Meridia (sibutramine) in 2010, and Belviq (lorcaserin) in early 2020. Other once promising weight loss drugs, for example Acomplia (rimonabant), failed to gain U.S. approval because of safety concerns.

Older drugs like Xenical (orlistat) have experienced comparatively unimpressive clinical and cost-effectiveness numbers, as well as side effects which some found intolerable. And, on their own, without additional behavioral treatments, weight loss medications have historically shown limited efficacy, which has restrained physician prescribing of these products.

Beyond safety and clinical effectiveness concerns, there's the issue of how payers will see a drug like Wegovy along with the obesity condition it heals. If seen as a lifestyle medicine, Wegovy will always struggle to obtain favor with payers. From smoking cessation to weight management to alopecia (hair loss), many insurance companies restrict coverage of what they deem are lifestyle drugs. In the case of hair loss, for instance, Medicare does not cover drugs, unless they are considered medically necessary to cure a disease which has caused hair loss.

Until now, the evidence suggest that many people (Medicare, Medicaid, Affordable Care Act (ACA) exchanges) see weight loss treatments as lifestyle drugs, which they are reluctant to pay for.

Indeed, insurance coverage for obesity treatments remains quite uneven. In the non-commercial space, particularly, coverage is scant. By statute, all Medicare programs are precluded from covering weight loss medications. Further, a research examining coverage in the Medicaid and Affordable Care Act exchange markets of obesity medications, such as phentermine/topiramate (Qysmia), liraglutide (Saxenda) and bupropion/naltrexone (Contrave) found that only 7 state Medicaid programs covered any of the medications, and among 136 exchange plans merely 11% had any policy for any of those three medications mentioned.

Novo Nordisk acknowledges that for Wegovy access and compensation will be challenges. The company says it's"been laying the groundwork" for Wegovy's rollout, and has already begun to work with donors. It's unknown what"working with payers" entails. Perhaps the provider intends to pursue some sort of value-based pricing agreements. More importantly, maybe Novo Nordisk is trying to alter payer perception of obesity; changing it in a lifestyle issue to some chronic illness.

Certainly, if the clinical evidence holds up in real life and is durable over time, the clinical benefit and security profile may warrant payers reimbursing the merchandise as a medically necessary treatment for its eligible obese population. And if non refundable professionally, this would induce more insured persons to select the product as their flat-rate prices would be far lower.

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