Insurance Companies Crack Down on Off-Label Prescriptions of Ozempic for Weight Loss
Insurance companies are warning health care providers about prescribing Ozempic, a diabetes drug that has gained popularity as a weight-loss treatment. The insurers are concerned about the lack of “sufficient evidence” of diabetes for more than 60% of patients prescribed Ozempic, its Food and Drug Administration-approved use. The insurers have sent “education letters” warning that prescribing the drug for other conditions could put patients at risk and that they would refer “suspected inappropriate or fraudulent activity … to the state licensure board, federal and/or state law enforcement.” The letters have gone out to clinicians in Missouri, New York, and North Carolina, signaling a coming clash over new drugs that are upending treatment for obesity.
GLPs Fueling a Frenzy Among Patients and a Gold Rush Within the Pharmaceutical Industry
GLPs, often called glucagon-like peptides, are fueling a frenzy among patients and a gold rush within the pharmaceutical industry. They are being popularized by celebrities, going viral on social media, and transforming the lives of people who’ve tried everything over decades to lose weight. They are also generating windfalls for pharmaceutical firms big and small, shaking up the fortunes of some conventional weight-loss companies and creating growth for companies that manufacture parts needed to inject the medication. Pfizer has estimated the GLP market could be worth more than $90 billion a year by 2030, up from $25 billion.
Insurers Tightening Rules to Prevent Off-Label Prescriptions for Now
Insurers appear to be tightening rules to prevent off-label prescriptions for now, but that could change if Ozempic and similar drugs are shown to have broader health benefits associated with losing weight — benefits that could save insurers money. The results of the first such major study are expected later this summer. Ozempic only has regulatory approval for diabetes, but it contains the same active compound, semaglutide, as another drug approved for obesity, Wegovy. Because many insurers do not cover weight-loss medications, doctors have ordered Ozempic to treat obesity, a practice known as prescribing “off label” that is common across health care.
GLPs That Have Been Approved by the FDA Have Quickly Become Engines of Cash for Their Developers
GLPs that have been approved by the Food and Drug Administration have quickly become engines of cash for their developers. Eli Lilly brought in $568.5 million of revenue in the first three months of 2023 from Mounjaro, its new diabetes drug. Novo Nordisk, a Danish company, reported the equivalent of about $3.5 billion in sales from Ozempic and Wegovy combined over the same period. Developing a drug that can meaningfully and safely help people shed pounds has been a “holy grail” for the pharmaceutical industry for decades, analysts say. The new drugs are man-made versions of Glucagon-like peptide 1, a hormone naturally produced by the body that helps regulate blood-sugar levels, make food pass more slowly through the stomach, and suppress appetite.
Insurance Companies Concerned About Side-Effects and Cost of GLPs
America’s Health Insurance Plans, a trade group, has noted concerns about side-effects and cost of GLPs. “The evidence is still evolving related to how these medications may impact complications related to obesity such as heart disease and diabetes,” said David Allen, a spokesperson. The cost and difficulty of finding GLPs has spawned a wide range of marketing efforts by companies seeking to capitalize on the drugs’ popularity. Shed Rx, an Arizona-based telehealth firm that launched in January, is advertising “affordable tirzepatide” for an initial $499 a month — half the cost of the list price for Mounjaro, the only FDA-approved tirzepatide drug.