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Home » How Much Should Weight Loss Drugs Like Wegovy and Zepbound Cost?

How Much Should Weight Loss Drugs Like Wegovy and Zepbound Cost?

March 15, 20254 Mins Read Business
How Much Should Weight Loss Drugs Like Wegovy and Zepbound Cost?
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It’s easy to make a medical case for blockbuster weight loss drugs like Wegovy and Zepbound, which have been shown to prevent heart attacks and strokes and save lives.

But for the employers and government programs being asked to pay for the medications, the financial case for them is less clear. Are the drugs’ benefits worth their enormous cost?

The answer right now is no, according to a new study published on Friday in the journal JAMA Health Forum, by researchers at the University of Chicago.

To be considered cost effective by a common measure used by health economists, the price of Novo Nordisk’s Wegovy would need to be cut by over 80 percent, to $127 per month, the researchers concluded. And Eli Lilly’s Zepbound would be cost effective only if its price fell by nearly a third, to $361 per month. (Zepbound warranted a higher price, the researchers said, because it produced greater benefits in clinical trials.)

“There’s no doubt that the drugs are demonstrating tremendous health benefits,” said David Kim, a health economist at the University of Chicago and the senior author of the study, which was funded by government grants. “The problem is the price is too high.”

There’s widespread hope that the drugs will effectively pay for themselves in the long run, by making patients healthier and preventing expensive medical bills. It’s not clear yet whether that will turn out to be true.

Eli Lilly rejected the new study’s findings, arguing that it ignored the results of several clinical trials in which the company’s drug had shown benefit. It instead used “a limited data set to draw sweeping conclusions,” said Courtney Kasinger, a spokeswoman for the company. And Liz Skrbkova, a spokeswoman for Novo Nordisk, said there are “no universally accepted thresholds for what determines a drug to be cost-effective.”

Employers and government programs pay different prices for the drugs, and those numbers are almost always kept a secret. The University of Chicago researchers estimated the price for Wegovy to be $700 per month, on average, compared with $520 for Zepbound.

Huge demand for the drugs has caused employers’ drug costs to balloon, prompting some companies to impose restrictions on who can get them, or stop covering the medications altogether. Con Edison, the energy utility that serves New York City and Westchester County, recently said it needed to raise rates to offset increased expenses that included a surge in spending on weight loss drugs.

Medicare covers the drugs for patients with diabetes, and a much smaller subset of people who contend with both obesity and another health condition, like a heart problem, or sleep apnea. Congress has resisted expanding coverage for millions more older people who are overweight or obese, because it would be so expensive.

Patients who pay for the drugs using their own money instead of going through insurance face varying prices; some pay more than $1,300 per month. But for a low dose of Zepbound, patients can pay $350 out of pocket, a price the University of Chicago researchers considered cost-effective.

To come up with their estimates, researchers ran computer simulations of what might happen if people who were overweight or obese took one of the weight loss drugs for the remainder of their lives. Based on the results from clinical trials, the model projected benefits that might accrue over the long run. Many overweight patients would never become obese, for example. Other patients would avert diabetes or heart disease. They would stay productive, and out of the hospital.

These benefits added up to many years of good health — so-called quality-adjusted life years. Many health economists think it’s reasonable for society to pay $100,000 for each such healthy year. But in the model, the years of good health provided by Wegovy and Zepbound cost much more.

Drug companies often push back fiercely against such cost-effectiveness analyses, saying they fail to capture the true value medications can bring to patients and societies. Still, they sometimes fund such studies. An analysis financed by Novo Nordisk, similar to that by the University of Chicago researchers, found the company’s weight loss drug to be cost-effective.

Drugs (Pharmaceuticals) Economics (Theory and Philosophy) Fees and Rates) GLP-1 RAs (Drug) Health Insurance and Managed Care Obesity Prices (Fares Research Weight
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