It's easy to create medical cases for blockbuster weight loss pills like Wegovy and Zepbound, which have been shown to prevent heart attacks and strokes and save lives.
However, their financial cases are less clear as employers and government programs are being asked to pay for the drugs. Are the benefits of drugs worth the enormous cost?
The answer is no, according to a new study published Friday in the JAMA Health Forum by researchers at the University of Chicago.
The researchers concluded that in order for the general measures used by health economists to be considered cost-effective, the price of Wegovy at Novo Nordisk should be reduced by more than 80%. And Eli Lily's Zepbound is only cost-effective if the price falls by nearly a third, reaching $361 a month. (The Zepbound guaranteed a higher price, the researchers said, because it provided greater benefits in clinical trials.)
“There's no doubt that drugs show tremendous health benefits,” says David Kim, a health economist at the University of Chicago and a senior author of the study funded by government grants. “The problem is that the prices are too high.”
They want the medication to pay themselves effectively in the long term by making patients healthier and preventing expensive medical costs. It is not yet clear whether that will turn out to be true.
Eli Lily rejected the findings of the new study and claimed that she ignored the results of several clinical trials in which the company's drugs showed benefits. Instead, “using a limited dataset, we draw drastic conclusions,” said Courtney Kassinger, a spokesman for the company. And Liz Skrbkova, a spokesman for Novo Nordisk, said “There is no universally accepted threshold for what drugs deemed cost-effective.”
Employers and government programs pay different prices for drugs, and those numbers are almost always kept secret. Researchers at the University of Chicago estimated Wegovy's price average of $700 compared to Zepbound's $520.
The huge demand for drugs has swelled employers' drug costs, prompting some companies to limit who can get them or stop drug coverage entirely. Con Edison, an energy utility that serves New York City and Westchester County, recently said it would need to raise fees to offset increased costs, including a surge in spending on weight loss drugs.
Medicare covers drugs for diabetics and a much smaller subset of people dealing with both obesity and other health conditions, such as heart problems and sleep apnea. Congress resisted the growing expansion of millions of elderly people who are overweight or obese.
Patients who use their money to pay for drugs instead of insured, face a variety of prices. Some people pay more than $1,300 a month. However, for low-dose zepbounds, patients can pocket $350, a price that the University of Chicago researchers consider to be cost-effective.
To come up with their estimates, researchers performed computer simulations of what would happen if someone who is overweight or obese took one of their weight loss pills for the rest of their lives. Based on clinical trial results, the model predicted potential long-term benefits. For example, many overweight patients do not become obese. Other patients avoid diabetes or heart disease. They are productive and are leaving the hospital.
These benefits have made them healthy over the years. Many health economists believe it is reasonable for society to pay $100,000 for each such healthy year. However, in the model, the year of health provided by Wegovy and Zepbound is much more expensive.
Pharmaceutical companies can often push back violently against such cost-benefit analysis and bring to patients and society by saying they can't gain real value. Still, they sometimes fund such research. Similar to researchers at the University of Chicago, an analysis funded by Novo Nordisk found that the company's weight loss drugs are cost-effective.
