A Deep Dive on Ozempic
Ozempic- it’s a Type-2 diabetes drug with a secondary function that is going viral – weight loss. There are reports of it being a miracle tool for losing unwanted weight and if you google news articles just the number in the past week is astonishing. The growth in claims for Ozempic is just as staggering. Total claims are up 145% compared to 2019. Between 2019-2021 the dollar amount reimbursed for Ozempic jumped 257%.
It’s not the first time an existing medication has found life beyond its original purpose. Viagra was originally developed to combat hypertension and cardiovascular disease. What makes Ozempic unique are a few things- one of them being its price tag. Patients using Ozempic can expect to pay over $10,000 a year. The virality of how people are becoming interested is something of a new phenomena. It seems that celebrities and influencers on TikTok and Instagram are doing the legwork of the marketing of the drug.
For employee benefit plan sponsors already dealing with a rise in costs associated with Diabetes (Ozempic now represents 18% of diabetes medication costs) the prospect of an influx of member claims for weight loss could pose a significant challenge to benefits budgets.
Inside a plan, as a diabetes drug most plans have mechanisms such as linkstep-therapy which first try patients on less expensive therapies before approving big ticket medications. When used for weight loss, Ozempic shifts into a different part of your drug plan – lifestyle drugs, which not all plans even cover.
The Role of a Benefit Plan
Plans don’t need to cover everything and many plans exclude lifestyle drugs. Which years ago would have most commonly referred to Viagra for example. The science on Ozempic as a weight loss drug appears to be fairly categorized at this point as early. In Australia, regulators have taken down 1900 ads for improperly describing the medication.
With many potential side effects employers choosing to have these drugs covered might be risking increased claims related to treating other conditions as a result. Studies suggest that a large number of patients regained lost weight after ending treatment and were then at an increased rate of actually developing Diabetes.
The drugs also come with a warning that they may increase the risk of thyroid cancer, acute pancreatitis, gallbladder disease, low blood sugar, kidney injury, damage to the eye’s retina and suicidal thinking or behavior.
Work Place Standards Considerations
The potential grey area here between coverage limitations and discrimination is worth being aware of. Chronic diseases that are apparent are a common source of workplace discrimination. This one, poses a particular nuance for employers to navigate as the definition of obesity as a medical condition continues to evolve.
It may not be as simple as an employer deciding whether or not to cover a prescription like this. According to Benefits Canada, we may see insurance carriers redefining lifestyle drugs to help benefits plan sponsors tackle issues related to workplace discrimination and support diversity, equity and inclusion efforts.
“According to the 2022 Benefits Canada Healthcare Survey, chronic diseases that are apparent or may result in a physical disability appeared to be a factor in workplace discrimination. Indeed, 42 percent of plan members with asthma/lung disease, 41 per cent with obesity and 38 per cent with chronic pain said they’ve experienced discrimination in the workplace.”1
Review Your Plan Contract
There are lots of examples of medications where new development creates a wonder drug effect, helping people deal with an affliction where they may have already given up hope for improvement. One obvious example of this is biologic drugs like Remicade which treat among other conditions – Rheumatoid Arthritis. Remicade is a high cost medication that exploded onto the scene in the 2010s creating inspiring results for some RA sufferers, adding a new cost consideration for plan sponsors.
This wave of GLP-1 Agonist weight loss drugs seems unlikely to be a fad as more competitors in the space compete for what could be a 100 billion dollar market. Mounjaro is considered to be a potential blockbuster in the space with a similar price tag, according to a recent New York Times article is set to hit mainstream this year. In the US there are 40 million employees identifying as obese who have employer sponsored drug coverage.
Innovations in pharmacy have been inextricably linked with benefit plan design and employer considerations in coverage strategies.
If you’re a plan sponsor and this is the first time you’ve heard the word Ozempic the link is a short video that CBC ran a few days ago that is worth a watch. If you are wondering what mechanisms your workplace plan has in place today, it’s probably worth looking at your contract parameters.
If you would like to have conversation about your plan parameters, you can book an appointment here: