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Good afternoon and happy Tuesday! It’s no surprise that expanding Medicare coverage of expensive weight loss drugs could have significant financial implications for the federal government.
According to an analysis by the U.S. Congressional Budget Office released last week, allowing Medicare to cover obesity medications could raise federal spending by approximately $35 billion from 2026 to 2034. The federal costs for covering these drugs would escalate from $1.6 billion in 2026 to $7.1 billion in 2034.
The analysis, though speculative, emerges as drug manufacturers and advocacy groups advocate for broader government coverage and increased access for seniors to popular treatments like GLP-1s for obesity, such as Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound, which come with high price tags of around $1,000 per month before insurance and rebates.
Currently, Medicare does not cover weight loss treatments unless they are approved and prescribed for another health condition. For instance, Medicare covers Wegovy for reducing the risk of severe cardiovascular complications in individuals with heart disease and obesity but does not cover the drug for weight loss.
The CBO anticipates that savings from enhanced health outcomes among patients, primarily through reducing obesity-related conditions, will increase over time. However, it notes that these savings could be relatively modest, totaling less than $50 million in 2026 and about $1 billion in 2034.
The CBO stated in the report, “Even though net federal savings per user are projected to be larger over the longer term, they would still be less than the cost of the medications.”
The CBO also suggests that drug costs may decrease over time. It foresees that generic versions of popular weight loss injections will enter the market, leading to price reductions. Additionally, the CBO expects average net prices for obesity medications to decline in 2027 due to Medicare drug price negotiations with manufacturers.
Semaglutide, the active ingredient in Wegovy and Novo Nordisk’s diabetes drug Ozempic, could be among the 15 prescription drugs chosen for the next round of price negotiations, set to commence in 2025 and take effect in 2027.
The impact of Medicare coverage of these treatments on access is a key consideration. The CBO estimates that over 12.5 million beneficiaries would become eligible for weight loss drugs starting in 2026 if Medicare covers these medications. The analysis suggests that around 2% of these patients are likely to use the treatments in the first year.
More than two-thirds of Medicare beneficiaries are classified as either obese or overweight based on their body mass index, according to the CBO.
Looking beyond 2034, spending patterns may shift. The CBO projects that Medicare spending on weight loss drugs would likely decrease on a per-user basis due to lower drug costs and increasing savings. Nevertheless, Medicare coverage of these treatments would still raise net federal costs from 2034 to 2044, as noted by the CBO.
A Novo Nordisk spokesperson mentioned on Tuesday that the medical and societal costs of obesity are substantial, with some estimates exceeding $1.7 trillion annually in the U.S. The spokesperson emphasized that obesity treatment is linked to improved medical outcomes, even if the savings are not fully recognized, expressing hope that Medicare will begin offering coverage for weight loss drugs.
Eli Lilly did not immediately respond to CNBC’s request for comment.
For any tips, suggestions, story ideas, or data, feel free to reach out to Annika at annikakim.constantino@nbcuni.com.
I’ve been testing Abbott Laboratories’ user-friendly continuous glucose monitor for the past few weeks, and it’s a valuable new tool for individuals seeking a detailed understanding of their metabolism.
The device, called Lingo, is a small sensor that penetrates the skin to provide real-time glucose measurements. It is comfortable and simple to use. I have it on the back of my right arm, and most of the time, I forget it’s there.
I’ve used continuous glucose monitors in the past, but this was my first experience with Abbott’s Lingo. The company launched Lingo in September, shortly after its competitor Dexcom introduced its consumer-oriented monitor, Stelo, in late August. I reviewed Stelo for CNBC before its launch.
While there are similarities between Lingo and Stelo, Abbott’s app offers a more comprehensive analysis of your glucose data over time compared to Dexcom’s. If you are interested in delving into your metabolism at a granular level, Abbott’s system is likely the better choice for you.
Glucose, a sugar molecule derived from food, serves as the primary energy source for our bodies. While glucose levels vary among individuals, consistently high levels can lead to serious health issues like metabolic disease, insulin resistance, and heart disease. Lingo aims to educate users about their habits and help them manage their glucose levels in healthier ways, according to Abbott.
Continuous glucose monitors have traditionally been prescribed to diabetes patients, but Lingo is designed for adults without the disease. It is available without a prescription, allowing you to purchase one sensor online for $49, two for $89, or six for $249.
Dexcom’s Stelo is also available over the counter, with a monthly subscription for two sensors priced at $89. Stelo sensors last up to 15 days before replacement, while Lingo sensors last up to 14 days.
Setting up and using Lingo sensors is straightforward. After downloading the Lingo app and entering basic biological information, applying the sensor to your arm is guided step by step in the app.
The sensor takes an hour to initialize and then starts transmitting real-time glucose levels to the Lingo app. Abbott’s primary objective is to help users understand glucose spikes, with the app excelling in this area.
Glucose spikes occur when blood sugar levels rapidly rise and fall, often after meals but also due to stress, exercise, and other factors. Managing spikes and improving glucose control can enhance sleep, mood, weight management, and proactive health measures, according to Abbott.
To help users grasp the impact of spikes, Abbott introduced the “Lingo Count,” an algorithm assigning a numeric value to each spike to indicate its significance. Users aim to keep their daily Lingo Count below a target value, which adjusts over time based on individual responses. Initially, my Lingo Count target was 60, which has now decreased to 44.
The Lingo Count provides a practical way to understand how dietary choices affect the body. For example, consuming a vanilla Greek yogurt added 5 points to my Lingo Count, while a few pieces of candy added 14 points. It reinforces healthy habits and offers insights into areas for improvement.
Users can delve deeper into their Lingo Count data, viewing it over a day, week, month, or all-time. The app also highlights the times of day when users typically experience significant spikes, often in the evening.
For optimal use of the Lingo Count, logging meals and exercise in the app is recommended. While straightforward, the app may experience occasional glitches, requiring multiple taps before functioning correctly.
The Lingo Count is a standout feature of the Lingo experience, complemented by other useful features in the app. Abbott offers challenges to educate and engage users throughout the day, suggesting small changes to reduce glucose spikes. Users can customize the duration of each challenge, such as closing the kitchen after dinner or increasing water intake.
Additionally, Abbott provides a wealth of articles, videos, and recipes in the app’s discover tab, particularly beneficial for those new to glucose management. The company effectively explains glucose concepts in simple terms.
Personally, I found Abbott’s recipes for omelets and overnight oats helpful, especially as I struggle with balanced breakfasts. I intend to revisit many of these recipes in the future.
Overall, my experience with Lingo has been positive, and I would recommend it to friends and family. It is user-friendly, and the Lingo Count has enhanced my understanding of how dietary choices impact my body over time.
For any tips, suggestions, story ideas, or data, you can contact Ashley at ashley.capoot@nbcuni.com.
