State Health Plan considers cutting weight loss drug coverage for state employees, retirees

The North Carolina State Health Plan, which covers more than 700,000 state employees, retirees and their family members, is considering whether to drop coverage for weight loss drugs that have exploded in popularity over the past few years.

The plan’s Board of Trustees, which makes decisions for the insurance plan, is scheduled to debate the issue next week. Plan staff has recommended the change, citing cost concerns with the antiobesity medications.

Those costs went from $3 million per month two years ago to more than $14 million per month this year, plan consultants said earlier this year. About 20,000 plan members use the drugs.

That costs the health plan $168 million a year “with minimal savings on medical costs” to offset the spending, plan consultant The Segal Group said in an August memorandum on the issue.

This class of drugs, known as GLP-1, would still be covered for diabetics, according to State Health Plan Administrator Sam Watts. But drugs such as Saxenda and Wegovy wouldn’t be covered for people who simply use them for weight loss.

Wegovy costs $1,349 for a month’s supply. And although a 40% rebate cuts the price significantly, the drug is still much more expensive in the United States than it is in Denmark, where drugmaker Novo Nordisk is headquartered, Watts said.

“It’s financially unsustainable at the current price point,” Watts said.

A spokesperson for Novo Nordisk, which also makes Saxenda, ticked off statistics on obesity's financial toll in the United States, saying weight issues cost the country $1.72 trillion a year in healthcare costs and lost economic productivity.

"Clearly, inaction addressing the serious chronic disease of obesity, including inaccessibility to available treatment options, is a major cost driver in our economy," spokeswoman Nicole Ferreira said in an email.

The State Health Plan change would be part of a string of efforts to reduce costs in a health plan struggling to recruit young, healthy people due to the high cost of family premiums. A staff presentation on the issue says the plan faces a $4.2 billion budget gap over the next five years, which the presentation calls “an existential threat to the plan.”

“Maintaining the current benefit structure for [the drugs] when used for the purpose of weight loss directly impairs the Plan’s strategic goals, including improving Plan solvency and reducing member and family premiums,” the presentation states.

The plan’s board meets Thursday at 1:30 p.m. Meeting materials are posted online.