RALEIGH, N.C. – In a bid to tackle rising costs, the North Carolina State Health Plan trustees board has decided to exclude coverage for popular but expensive anti-obesity drugs, effective April 1. The move comes after a price dispute with the manufacturer of two brand-name medications. The decision, made with a narrow majority vote of 4-3, will impact the coverage of GLP-1 medications specifically used for weight loss, while prescriptions for diabetes treatment will remain unaffected.
The State Health Plan, which provides health insurance for over 700,000 people, has been grappling with the soaring costs associated with the increased use of these weight-loss medications. Plan officials estimate that the GLP-1 medications amounted to approximately $102 million in expenses in 2023, accounting for around 10% of the total prescription costs.
Previously, the board had allowed nearly 25,000 individuals with prescriptions for Wegovy, Saxenda, or Zepbound to continue receiving these medications for weight loss until the end of 2023. However, no new prescriptions would be permitted moving forward. This change in drug utilization also meant that the State Health Plan would lose a 40% rebate on the cost of Wegovy and Saxenda offered by the manufacturer Novo Nordisk through their contract with plan pharmacy benefits manager CVS/Caremark. Without the rebate, the plan’s expenses for the grandfathered prescriptions would have increased from $84 million to $139 million.
By discontinuing coverage for weight-loss drugs after April 1, the State Health Plan anticipates saving nearly $100 million this year. Dr. Pete Robie, a board member, emphasized the need to prioritize fiscal responsibility, stating, “We can’t spend money we don’t have, we just can’t.”
The decision to end coverage for these medications also prevents the plan from potentially spending an estimated $170 million on weight-loss drugs by 2025. This could have led to a monthly surcharge of $48.50 on each plan member, regardless of whether they were using the drugs or not.
However, board member Melanie Bush expressed concerns about the discontinuation of coverage and urged the plan to maintain coverage for existing prescriptions while negotiations continue with manufacturers and CVS/Caremark. Bush argued, “This is a life-saving drug, and we’re talking about denying it.” The board acknowledged that the vote could be revisited if a compromise is reached.
The State Health Plan remains hopeful that ongoing negotiations will lead to a solution that balances cost-saving measures with the need to provide access to necessary medications. The decision to discontinue coverage for anti-obesity drugs reflects the plan’s commitment to fiscal prudence while exploring alternatives to address rising healthcare costs.
