Medicare Expansion for GLP-1 Agonists Balances Clinical Gains and Cost Risks

Expanding Medicare coverage for glucagon-like peptide 1 (GLP-1) receptor agonists, key medications for obesity management, could substantially decrease obesity-related health complications but may result in significant increases in Medicare spending over the next decade.

The American Medical Association recognized obesity as a disease in 2013, paving the way for advanced treatments like GLP-1 RAs that demonstrate considerable efficacy in weight loss and improvement of comorbidities such as diabetes and cardiovascular disease.

However, current Medicare policies limit coverage due to longstanding exclusions of weight loss medications under Part D. This study used a microsimulation model with nationally representative data to project the fiscal impact of broader GLP-1 RA coverage for Medicare beneficiaries over 10, 20, and 30 years, including individuals newly eligible due to age and obesity criteria. Initial findings indicate that with a 10% uptake rate, drug spending could reach nearly $66 billion over 10 years, offset by approximately $18 billion in savings from reduced obesity-related comorbidities, leading to a net increase in Medicare costs of about $47.7 billion.

Sensitivity analyses reflected a wide range of financial outcomes dependent on uptake rates, adherence, and negotiated drug prices, emphasizing the challenge of balancing clinical benefits with budgetary constraints.

The long-term projections show growing medication costs outpacing health care savings, suggesting ongoing net increases in Medicare expenditures. Policy recommendations highlight the necessity of comprehensive strategies to maintain affordability and equitable access, including enhancing adherence, fostering competition to reduce prices, prioritizing reductions in low-value care, and exploring alternative weight maintenance interventions post-treatment. The study also raises concerns that expanded coverage might require resource reallocation from other Medicare services and could incentivize initial price increases by pharmaceutical manufacturers anticipating future price negotiations.