As of June 2021, the North Carolina State Employees’ Insurance Plan is paying 2,800 people take weight loss medications.
Last year, it cost nearly 25,000. Drugs like Wegovy cost the North Carolina state health plan 100 million dollars last year, appearing seemingly out of nowhere to account for 10 percent of their prescription drug spending.
“This is something we never anticipated,” said Dale Folwell, the state treasurer, whose office manages the health plan.
Alarmed by skyrocketing costs, the health plan’s board voted Thursday terminate all coverage of weight loss drugs, including Wegovy, which accounts for the vast majority of its spending on obesity drugs. The plan will continue to cover versions of the drugs intended for people with diabetes.
In recent years, appetite suppressant medications have gained popularity because they are extraordinarily effective in helping patients lose weight. Research suggests the drugs can pay for themselves or even save money in the long run, preventing heart attacks and strokes that lead to huge hospital bills.
But for employers and health insurance plans that cover most of the cost of prescription drugs, the bill for these drugs is crushing — and now coming due. These last months, the University of Texas system and the hospital chain Ascent they stopped paying for their workers’ medications. Those that continue to cover drugs are imposing new restrictions intended to reduce costs. The Mayo Clinic, for example, will now offer a lifetime benefit of just $20,000 for medications intended for its employees.
Medicare, in comparison, does not cover medications prescribed for weight loss, but does cover bariatric surgery.
In North Carolina, Thursday’s vote to end health coverage appears to be the first in the nation by a state health plan. The plan uses state funds to pay most of the prescription drug costs of 740,000 government workers, teachers, retirees and their family members.
The state health plan is in financial trouble. Last year, its cash flow decreased by $250 million. Trustees who voted to end coverage said they had a duty to do the most good for the most people.
“Our responsibility as trustees is to the state health plan,” said Rusty Duke, a trustee. “We are talking about a small number of people compared to the total membership.”
Coverage for weight-loss drugs will end April 1 unless a last-ditch deal can be reached to reduce costs.
To continue taking the weight loss medications, patients will have to pay out of pocket. Drugs can cost more than $16,000 a year without insurance coverage – a daunting prospect for workers whose average annual salary is $56,000. Most patients regain the weight they lost if they stop taking the medications.
In recent weeks, state health care officials have sought to see if they could cut costs by placing restrictions on who can get the drugs, but were told they could not. do without losing $54 million in rebates from drug manufacturers this year.
Jessica Uhrick-Rieger, a 44-year-old state employee, started taking Wegovy in October 2022. She has since lost 250 pounds and no longer has prediabetes. But she won’t be able to afford Wegovy’s $1,349 monthly price.
“It’s more than my mortgage,” she said.
Mr. Folwell, the health plan’s board chairman, who did not vote Thursday, was outspoken about the plan’s unsustainable spending on weight-loss drugs. (Aside from his day job, he is running as a Republican for governor of North Carolina on a political platform focused on substance over style.)
He talks about the dilemma facing the health insurance plan in easy-to-understand terms: for example, if the plan had covered drugs without limits this year, the cost would be enough to pay for a Salary increase of 0.5 percent for all state employees. and he has strongly criticized Novo Nordisk, the maker of Wegovy, for what it calls predatory pricing. The plan spends about $800 per month per patient on Wegovy, while patients are responsible for an average monthly copay of $37.
“I do not question the effectiveness of this measure,” he said. “I wonder what we’re being charged.”
Novo Nordisk advocate Allison Schneider called administrators’ decision to end coverage “irresponsible,” adding that the company had worked with state health plan officials to address concerns about costs. . “We do not support insurers or bureaucrats inserting their judgment into these medical decisions,” she said.
Some in North Carolina see a bitter irony in the fact that Novo Nordisk manufactures and packages Wegovy in Clayton, North Carolina, a short drive from government offices where state health plan officials are trying to figure out how to pay for medications.
Critics of the company have drawn attention to the tens of millions of dollars in incentives Novo Nordisk has received from the state as well as the county where its factories are located.
“It certainly adds insult to injury,” said Ardis Watkins, executive director of the North Carolina State Employees Association, a group that lobbies on behalf of state health plan members. ‘State. “Our economic climate, which has been made so attractive to companies locating here, is being used to make a hugely overpriced drug.”
Ms. Schneider said Novo Nordisk employs more than 2,500 North Carolinians and has invested more than $5 billion in capital expenditures in the state.
State health plan staff are closely monitoring Wegovy’s spending growth. About a year ago, it became the health plan’s most expensive drug, surpassing the plan’s top expense, the blockbuster anti-inflammatory Humira.
“All of a sudden, Wegovy went on a rampage,” said Sonya Dunn, a health plan official who regularly reviews reports showing the plan’s prescription drug spending is reaching new heights.
The North Carolina State Health Plan was more lax than other employers and insurance programs in how it covered obesity medications. Until recently, patients could receive coverage without providing documentation that they had the body mass index or certain medical conditions approved by the Food and Drug Administration to be eligible for the drugs.
Employees participating in the plan pay monthly premiums ranging from $25 for an individual to $720 for a family. The plan has not increased member dues in seven years — a priority, Mr. Folwell said, of recruiting young workers to join and stay in state government. If coverage for weight-loss drugs had continued without limits, health plan officials had projected that premiums would increase by $50 a month next year.
Meghan Ray, a state employee who takes Wegovy, said she was disappointed by the trustees’ vote. She started Wegovy two years ago because of a health problem that could compromise her eyesight if she weighed too much. She has since lost 32 pounds and stopped taking blood pressure medication.
Ms. Ray, 41, who spoke at the board meeting Thursday, said she feared she would eventually have to undergo another stomach reduction operation that would be costly for the health plan. the state, because she did not have the money to pay out of pocket. for Wegovy.
“The state doesn’t pay me enough to afford it,” she said in an interview. “It’s more important that I can afford gas to get to work or food to feed my family. »
The board voted 4-3 in favor of ending drug coverage.
Wayne Fish, an administrator who voted against ending the coverage, is himself a state employee who works in the corrections food service. He said he was nervous about the compromises.
“These are difficult decisions,” he said. “We see the solvency of the regime and so on, but it’s also about people’s lives. I don’t know if there is a way to balance this.