Obesity medicines would cost US medicare $35 billion through 2034

By John Tozzi and Madison Muller

Giving older Americans access to weight-loss medicines through the US Medicare program would cost $35 billion over nine years, according to a congressional analysis. 

Expanding coverage of weight-loss drugs like blockbusters from Eli Lilly & Co. and Novo Nordisk A/S would make 12.5 million more people in the US program eligible for them by 2026, according to a long-awaited Congressional Budget Office analysis released Tuesday. The CBO estimated the drugs’ costs from 2026 through 2034. 

About 52 million older or disabled Americans get retail prescription drug coverage through Medicare, which doesn’t cover drugs specifically for weight loss. Drugmakers and advocacy groups have asked Congress to broaden coverage of wildly popular therapies including Novo’s Wegovy, which Medicare now covers only for heart disease, and Lilly’s Zepbound. 

Lilly and Novo didn’t immediately respond to a request for comment. Lilly shares rose 1.7 per cent as of 3:37 p.m. in New York. 

The CBO analysis is crucial because wider coverage would likely have to be paid for with either higher taxes or cuts to other federal spending. The total savings from the benefit of the drugs themselves would be small relative to their cost, the agency said. In 2034, according to the report, Medicare would spend $7 billion on weight-loss medications, while saving $1 billion from improved health related to the drugs. 

Price Drop
 

Over time, though, the drugs’ prices are expected to fall, while savings from averted medical costs would accumulate. The CBO expects that semaglutide, the active ingredient in Novo’s Wegovy, Ozempic and Rybelsus, will be selected for government price negotiations in 2025 because of “high cost to the Medicare Part D program.”

Still, CBO said, the government would incur added costs from the drugs through 2044. 

The office cautioned that its estimates are “highly uncertain,” given the fast-moving changes in the scientific evidence behind the drugs along with their prices.