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This new class of weight loss drugs are costly - but is there a greater price to ignoring the problem?
Obesity is a complex chronic disease - and it's time we treated it as such.
If you have read the news, watched cable TV, rode the subway, or been on TikTok in the last six months, you’ve most certainly heard of weight loss drugs like Mounjaro and Ozempic. These “GLP-1” drugs which stand for glucagon-like peptides, have been hailed by celebrities and weight loss influencers as modern medical miracles and as the ultimate solution to our massive obesity epidemic. The message seems to be reaching its audience: one recent survey showed 3 in 10 Americans are interested in trying a GLP-1. (To be technically accurate here, Mounjaro is the first-of-its-kind to activate both the GLP-1 and GIP receptors, which leads to improved blood sugar control.)
It is true that this class of drugs — which are also used to treat type 2 diabetes and other weight-related conditions, versus purely cosmetic weight loss — show promising efficacy, delivering 15% average weight loss at one year with a decent safety profile. Though a list of side-effects is also well documented.
How they work:
– They make the stomach empty slower, improving the feeling of being satisfied after a meal
– They signal to the brain that there is food in the stomach, which helps decrease appetite and cravings
So, can we finally declare victory over obesity? Not so fast. We have a lot more work to do and a lot of complicated questions to answer. I wrote this piece with Virta Health’s Sami Inkinen. Despite his implicit bias towards lifestyle, we did our best to keep it honest and explore the topic with a wide range of experts. We also had a few of them review this piece prior to publication. Where we ultimately landed is we need all the tools in the toolkit to address obesity, a complex chronic disease. So let’s dig in.
First, the bear case for expanding access to this new class of meds. With more than 100 million American adults potentially eligible for weight loss drugs at a typical list price of $16,000 per patient per year, the total bill comes to about $1.6 trillion. Not over the next decade, but $1.6 trillion every year. Current published evidence from the drug companies’ trials has shown that people can regain weight rapidly when they go off the drug, indicating a need for ongoing use. As it stands today - and we’re still in the early innings - pharma companies expect to make $90 billion a year off of these medicines.
To put the $1.6 trillion into perspective, it’s more than twice as much as total public spending on K-12 schools, three times as much as total public spending on roads and water infrastructure, and almost twice as much as we spend on the military in the U.S. each year.
One of the core bear case questions here: Can we afford that - and should we, particularly when lifestyle interventions are cheaper? There’s a lot of skepticism about lifestyle treatments, which is inclusive of but not limited to diet and exercise. Sami’s company Virta has published some clinical studies on this, demonstrating both long-term weight loss in patients and reductions in A1C. Patients that engage with the program on average will lose about 30 pounds, or 12 percent of their body weight at one year and sustained past two years, with an intervention that focuses on reduced carb intake. So if these cheaper solutions exist - why not at the very least try them first or combine with the meds? In fact, there’s clear evidence that with Wegovy, the drug works best alongside a lifestyle intervention.
Well, we are in the camp of “yes and.” We need to be open to a variety of evidence-based solutions to curb this epidemic. The focus should be on what’s best for the individual patient, recommended by and administered by their care team. And these interventions should feel proactive, versus reactive. For that reason, we hope to see more tests and screening protocols to determine the sorts of interventions that are optimal. What we don’t want to see is an approach of leaving patients to constantly try and fail on their own and without support, resulting in a prolonged blame and shame cycle.
Okay, so now for the bull case.
While Virta, Omada and other evidence-based lifestyle programs exist, there are still patients that will opt for or require the medications and/or bariatric surgery. Obesity is such an expensive problem that many of the physicians we spoke to were not averse to a hefty price tag for interventions that work. We do know that for some patients, lifestyle alone isn’t always enough. For them, even if they lose weight initially, weight loss may not be sustainable with diet and exercise alone. Our own biology can make weight loss difficult. Obesity medicine experts say there’s increasing evidence that the activity of the hunger hormone increases for obese patients while the activity of the satiety hormone can decrease with weight loss. The basal metabolic rate also decreases while we lose weight, meaning these patients burn less calories at rest.
For that reason, we need to recognize obesity as a chronic disease - it’s not just a result of poor eating and not enough time at the gym. A big part of the problem is certainly Western diets and sedentary lifestyles, but researchers now believe there’s also widespread hormonal imbalances that may be contributing to the problem as well. In short, it’s complicated.
That doesn’t mean lifestyle doesn’t play a role. It’s an important intervention on its own. And it’s a powerful accompaniment to more intensive interventions. Weight loss before bariatric surgery is associated with better postoperative outcomes (one company to look at here is former bariatric surgeon Dr. Raj Aggarwal’s twenty30 health, which advocates for a surgery and medicines plus lifestyle approach). And the same is true for the GLP-1s. Making positive changes to eating habits can also have a positive effect on both GLP-1 secretion and insulin levels. And lifestyle can also be a useful tool in helping patients come off of the drugs, while sustaining initial weight loss. Omada just announced a lifestyle program to address the cost concerns with GLP-1s. We think that’s where a lot of digital health will land - not necessarily in just prescribing the medicines (hopefully not in a ‘Pill Mill’ fashion without oversight), but in supporting the patients with a program that includes exercise, counseling and healthier food. Interestingly, Noom is doing something somewhat similar although it will also prescribe the medications.
Our overarching view is that these approaches should be distributed equitably and made available to those who most need them—not just whoever can afford them. We also hope to see more innovation across all these areas, such as recent advancements in surgery to make the recovery easier for patients. A new procedure called endoscopic sleeve gastroplasty doesn’t require traditional surgery or an incision.
So let’s get back to the economic argument. So how much does the obesity epidemic currently cost us and how much is that expected to rise?
– First, let’s look at direct medical costs. The CDC estimates that its $147 billion per year and that prices are expected to balloon by 2030 when an estimated half of American adults will have obesity.
– Then there’s the indirect costs. According to a Milken Institute report from 2018, the economic cost of excess weight, including things like absenteeism from work, is an estimated $1.7 trillion. It’s likely even higher now as the problem has only gotten worse.
So it’s clear we need to invest in solving this issue, and that may mean getting these medications into the right hands. The priority is not the Instagram influencer who’s otherwise healthy but wants to lose 10 pounds before a wedding.
“You’re seeing a ballooning cost for obesity at a societal level,” Dr. Michael Albert, an internal medicine physician who’s board certified in obesity medicine, told us. Dr. Albert is the co-founder of a company called Accomplish Health, which helps patients determine the right treatment to manage their weight. “Either way, it’s an incredible economic burden.”
So if you play the long game, Dr. Albert thinks that these drugs are worth paying for - even at current prices. And ultimately, although timing is unclear, he believes the prices will come down as generic alternatives hit the market. A recent analysis supports that view. We’ve seen predictions from researchers that the drugs could be down to $350 a month in the next few decades. Anecdotally, we’ve also heard the opposite from other experts, namely biotech investors and economists—that these prices are not set to come down anytime in the next decade at least, as pharma companies have little incentive to do so and the drugs are protected with many layers of patents. And the near-term costs could be catastrophic for Medicare. How this will play out is still unknown.
It may well be worth it from a public health standpoint. Dr. Albert sent over a simulation study, which looked at the potential for broad-based prescribing for anti-obesity medicines across the Medicare and Medicaid population. It found that the government would actually save money because of the reduction in downstream costs. Overall, according to the researchers who built the model, the net benefit would be $746.6 billion over the next 75 years. The study’s authors noted that the impact would be similar to recent investments in anti-smoking campaigns.
But that still leads to another problem: Payers. Do health plans really want to pay for these drugs even if – for select patients – there’s a rational case for doing so?
Well, as with everything in our healthcare system, there’s no easy answer. One of the problems is that it’s very hard to see the economic value over a time-frame that most health plans typically provide coverage to their members. Once a weight loss intervention gets rolling, it often takes a few years to see real benefit and reduction in costs. “By 24 months, we see the economic value… certainly from a population standpoint,” said Dr. Albert.
But the problem is churn. Because we tie health insurance to employment, a lot of health plans don’t even keep members on for that long. In Virta’s case, Sami notes that one challenge to initial adoption of the lifestyle based weight loss offering has been that the major competitors’ programs like Weight Watchers, now WW, have demonstrated only mixed success with long-term weight loss outcomes, creating doubt around the feasibility and long-term effectiveness of diet-driven approaches as a whole. Another problem is calculating cash-on-cash ROI for weight loss alone. Even for payers and self-insured employers that have seen the light, it’s not easy. For Type 2 diabetes reversal, economic and clinical impact is a calculation of certain well-understood metrics like A1C levels (a calculation of a patient’s blood sugar levels) and eliminating costly medications like insulin. That allows companies to demonstrate clear cash savings based on improved outcomes. Weight loss is harder to justify based on outcomes-based savings, because health improvements may be slower to achieve and harder to show via claims based analyses.
For this reason, many of the obesity medicine physicians we talked to have found that their patients are routinely getting denied access to these drugs, even when they meet the criteria. Making matters worse, there are still sometimes shortages, particularly in the face of unprecedented demand.
Two obesity medicine physicians we talked to - Dr. Nisha Patel, a hospitalist at CPMC in San Francisco and Dr. Disha Narang, an endocrinologist and culinary medicine expert - both said that they are put in terrible positions where they see a patient who desperately needs the medications, but their insurance company denies the claim or they have to deal with an extended prior authorization process. Sometimes it’s because the patient doesn’t have diabetes (yet), or it’s related to their specific plan.
So the problem gets worse until the patient does eventually get a few blood sugars in the diabetic range, and then finally they can get them the GLP-1 medications. But if the patient gets better too quickly, both in terms of weight loss and improved blood sugars, sometimes the insurance company will abruptly pull them off. So their physicians are in the position of hoping the drug works, but not too quickly.
“Many insurance companies are going out of their way to make it more and more difficult to cover these medications because of the increased costs,” Dr. Patel shared. “On top of that, insurance companies will only initially approve coverage for a finite amount of time (like as short as 4 months) and then make you do another prior authorization to extend coverage based on the patients’ response.”
So how do we get around this?
Well all the physicians we spoke to said a starting point would be to stratify patients in terms of need. Dr. Arya Sharma, a professor emeritus at the University of Alberta, and colleagues created an important staging tool called the Edmonton Obesity Staging System to do just this. (A more widely-used alternative, of course, is Body Mass Index or BMI, but Cleveland Clinic and other groups also have their own scores).
Stage 0 is a person with no obesity-related risk factors, potentially that Kardashian sister trying to lose 10 pounds. Stage 1 would be that a person is overweight and has some subclinical risk factors, like borderline hypertension. By Stage 2, there’s clear and established co-morbidities including diabetes, cardiovascular disease, renal issues and behavioral health challenges. At Stage 3, there’s significant organ damage like heart failure. By stage 4, the patient is at a very late stage of disease and severely functionally limited.
The key will be to treat the right people at the right place. Dr. Albert sees most benefit in focusing first with Stage 2 and above, as these patients are more critical. There’s also a clearer economic case for payers to reimburse for these medicines at this stage. In most cases, they’re also the patients who will also experience the highest cost complications. There could be a huge opportunity for a clearinghouse of sorts for obesity that earmarks these specific patients and provides them access to the medications, in addition to a lifestyle program that is proven to help patients lose weight and/or maintain weight loss as they come off the GLP-1.
Dr. Patel agrees, noting that a liver transplant for a patient with Fatty Liver Disease can cost in excess of $1 million alone (obesity is associated with an increased risk of nonalcoholic fatty liver disease). So from that perspective, far lower cost interventions that work should be a no brainer.
All in all, we need to shift our thinking around obesity. It is a costly, serious and complex chronic disease. There are clear links to many health issues ranging from insulin resistance to infertility to hypertension to sleep apnea to depression, and even some cancers too. Very few medical specialties aren’t touched by this problem. And there are also indirect complications, including reduced school attendance and reduced earning potential.
And we’re already ahead of the game, relative to other areas of healthcare. We have interventions that work, ranging from medication to lifestyle. Patients should have access to the full gauntlet of solutions and work in concert with informed providers to determine what’s right for them. Otherwise, we’ll face rising and rising costs - and our health care system is overwhelmed enough as it is.
Our perspective is that obesity is a problem we must solve. If you remember anything else from this post, it’s time that we thought of it as a metabolic disorder. To improve the problem, we’ll need a full suite of solutions, with the support of stakeholders ranging from schools to food companies to public health departments, including but not limited to this new class of medications. There’s so much more to say on this topic but we’ll end it here for now! Thanks for reading.
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