UnitedHealth Group Inc.’s chief executive officer said makers of popular drugs used to control weight and diabetes must cut their prices before employers will widely agree to cover them.
(Bloomberg) — UnitedHealth Group Inc.’s chief executive officer said makers of popular drugs used to control weight and diabetes must cut their prices before employers will widely agree to cover them.
“We’re struggling, and frankly our clients are struggling, with the list prices which have been demanded of these products in the US,” UnitedHealth CEO Andrew Witty said on a call with analysts Friday, noting that US prices are about 10 times higher than those in Western Europe. The treatments generally cost more than $1,000 a month in the US.
UnitedHealth covers about 47 million Americans in medical plans and is the third-largest prescription benefit manager. Most employers who fund their benefits directly can decide whether to cover drugs such as Novo Nordisk A/S’s Ozempic and Wegovy or Eli Lilly & Co.’s Mounjaro.
The drugs, initially approved for diabetes, are increasingly being used for weight loss and have been successful in reducing obesity. There are early signs that they also help prevent health problems such as heart attacks and strokes, sparking speculation about the medications’ potential to transform industries from snack foods to airlines to dialysis.
Witty said it’s “way too early” to see any impact on broader medical costs from health improvements from the drugs, called GLP-1s.
UnitedHealth has seen some employers expand coverage while others retreat. About 80% of prescriptions are for diabetes, said Brian Thompson, who leads the company’s UnitedHealthcare insurance unit. “Are our customers considering to cover more or less? I would say it’s a mixed bag,” he said.
The company has approached drugmakers about payment arrangements that would link the cost to patient adherence, health outcomes, or other measures, Thompson said. It’s also exploring approaches that would “put less reliance on lifelong adherence” so people don’t need to stay on the drugs forever. “Clearly, price point is a key barrier,” he said.
Patients often regain weight once they’ve stopped taking the drugs, and experts say they may need to be on the medications for the rest of their lives to keep weight off permanently.
How health insurers and pharmacy benefit managers’ own businesses will ultimately be affected by the drugs remains unclear. They price the cost of care into premiums charged to clients. Cigna Group, which operates the second-largest pharmacy benefit manager, said in August that rising use of GLP-1s boosted earnings.
Witty said the company is waiting on drugmakers to agree to new payment models.
“We need the manufacturers to move,” he said. “It’s as simple as that.”
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