Spending on GLP-1s is expected to continue growing in 2024 and beyond
BOSTON — Today, the Massachusetts Health Policy Commission (HPC) reviewed new HPC research analyzing the use and spending impacts of blockbuster GLP-1 weight-loss drugs in Massachusetts.
A new cause of concern for pharmaceutical spending in Massachusetts is one class of medications that are increasingly being prescribed – Glucagon-like peptide 1 (GLP-1) drugs, such as Ozempic and Wegovy. Originally indicated for treatment of type 2 diabetes, GLP-1 drugs have been prescribed off-label for weight loss, and some newer drugs in the class now have an FDA-approved indication for chronic weight management.
While all GLP-1 drugs in Massachusetts increased in price between January 2018 and September 2023, average gross commercial prices were highest for drugs indicated for weight loss (Wegovy and Saxenda). The price for a one-month supply of Wegovy averaged about $1,300. Between January 2018 and September 2023, the average gross price for a one-month supply of medication increased the most for Victoza (25.7%), followed by Trulicity (25.4%) and Ozempic (20.9%).
Alongside increasing prices for these drugs are increasing prescriptions. The HPC analyzed trends in GLP-1 prescriptions in Massachusetts through September 2023 and found that in just the first nine months of 2023, 3.2% of Massachusetts commercial members were prescribed a GLP-1 drug, a 7-fold increase compared to 2018. There were an estimated 313,000 GLP-1 prescriptions among commercially-insured members in Massachusetts in 2023.
Use of GLP-1 drugs for weight loss is a large driver of the increase in both prescriptions and spending. The composition of GLP-1 prescriptions has shifted toward products indicated for chronic weight management – from 6% in 2018 to 40% in the first nine months of 2023. The share of patients primarily using GLP-1 drugs for weight loss is likely even higher due to newer products indicated for type 2 diabetes being prescribed off-label for weight loss.
Average cost-sharing for a one-month supply of GLP-1 drugs ranged from $61 to $93 in 2023, raising concerns about affordability for a chronic medication. Cost-sharing was highest for drugs indicated for weight loss (Wegovy at $85, Saxenda at $93).
The number of potentially eligible patients for GLP-1s in Massachusetts is significant and expanding. According to the CDC, one in four adults in Massachusetts have obesity, representing approximately 1.5 million residents. In addition, earlier this year, the FDA approved a new cardiovascular indication for Wegovy based on evidence that it may reduce the risk of cardiovascular death, heart attack, and stroke, further expanding the eligible patient population.
“With trends of increasing GLP-1 prescription cost and volume, policymakers must grapple with the question of whether the Commonwealth can handle these costs in the short term,” said Dr. David Cutler, HPC Commissioner and Otto Eckstein Professor of Applied Economics, Department of Economics and Kennedy School of Government, Harvard University. “But we must also consider possible long-term health benefits and cost savings as an important part of this equation, and the value of these drugs to patients’ health outcomes.”
Total gross commercial spending on GLP-1 drugs was nearly $125 million in 2022, and spending on GLP-1 drugs among commercially-insured members accounted for 5% of pharmacy spending among commercially-insured members overall in 2022. Total gross commercial spending on GLP-1 drugs in Massachusetts is projected to surpass $270 million in 2023, more than doubling the spending in 2022.
“The HPC has recommended for nine years in a row that the Commonwealth should authorize strengthened oversight and transparency for pharmaceutical spending,” said David Seltz, HPC Executive Director. “In recent years, retail drug spending has become one of the fastest areas for spending growth in the Commonwealth, with accompanying effects on patient affordability through increases in cost-sharing. As we look to the future, we need to develop new tools and policies that balance considerations of equitable access, affordability, and innovation.”
Key Findings: Health Care and Pharmaceutical Cost and Spending Trends in Massachusetts
- In Massachusetts, prescription drug commercial spending (net of rebates) grew 10 times faster from 2019 to 2022 than it did from 2017 to 2019. Above-benchmark growth in pharmacy spending from 2019-2022 added 1 percentage point to overall commercial spending growth.
- Growth in drug spending was mostly driven by higher prices but also by new entrants and expanding indications (such as in the immunosuppressants class). Immunosuppressant drugs, including Humira, accounted for more than 60% of overall gross commercial prescription drug spending growth from 2018 to 2022. Given current trends, GLP-1s are likely to drive further spending growth in 2023 and in future years.
Key Findings: GLP-1 Usage and Spending Trends in Massachusetts
- The number of GLP-1 prescriptions among Massachusetts commercial members has increased from approximately 3,000 per 100,000 members to 22,000 per 100,000 commercial members from 2018 to 2023, a more than 7-fold increase. In 2023, this amounted to 3.2% of all commercial members. Among these, almost two-thirds were prescribed a semaglutide drug.
- The HPC estimates that during 2023, more than 310,000 GLP-1 prescriptions were filled among commercially-insured members in Massachusetts.
- Commercial members prescribed Wegovy and Saxenda (the two drugs approved for weight loss) were more likely to be younger, female, living in higher income areas, living in metro areas, and with a prior diagnosis of overweight/obesity.
- By the first nine months of 2023, approximately half of members prescribed a GLP-1 had a previous diagnosis of diabetes, a significant shift from 2018 when over 90% of members had a history of that diagnosis.
- While all GLP-1 drugs increased in price between January 2018 and September 2023, average gross commercial prices were highest for drugs indicated for weight loss (Wegovy and Saxenda), at $1,303 and $1,279 per one-month supply during the first nine months of 2023, respectively. Between January 2018 and September 2023, the average gross price for a one-month supply of medication increased the most for Victoza (25.7%), followed by Trulicity (25.4%) and Ozempic (20.9%). Rybelsus had the lowest price, at $905 per one-month supply during the same time period.
- Total gross commercial spending on GLP-1 medications was approximately $270 million in 2023, more than doubling from nearly $125 million in 2022.
Dr. Rena Conti, Associate Professor and Dean’s Scholar, Department of Markets, Public Policy, and Law, Questrom School of Business, Boston University, also provided a national perspective on trends and projections for drug spending, including the entry to market of new gene therapies and other high-priced clinically impactful products. Dr. Conti discussed considerations for cost containment options, in the context of goals for both access and affordability. Dr. Conti’s presentation, “National Trends in Innovation and Spending on Prescription Drugs and Policy Considerations” is available on the HPC’s website.
Market Oversight and Steward Healthcare
Also at today’s meeting, HPC staff updated commissioners on the pending review of the proposed Stewardship-Optum transaction, which was submitted by Stewardship Health at the end of March 2024.
Bankruptcy law expert Katie Catanese of Foley & Lardner, LLC provided an overview of the Chapter 11 process, including the sale of assets in a bankruptcy proceeding as they relate to Steward Health Care and related timelines as approved by the bankruptcy court. The presentation is available on the HPC’s website.
HEART-BP Investment Program Request for Proposals
The HPC is making $1.5 million available for a new maternal health investment program, Hypertensive disorders Equitably Addressed with Remote Technology for Birthing People (HEART-BP).
Through remote blood pressure monitoring, HEART-BP will support birthing hospitals seeking to improve outcomes, lower costs and address maternal health inequities. The HPC intends to fund up to 5 awards of up to $300,0000 each for providers eligible for the Distressed Hospital Trust Fund (up to 4 total awards) and the Payment Reform Trust Fund (1 award).
Interested applicants are encouraged to register for the informational session webinar on June 27, 2024 at 12 pm EDT, or submit questions by email to [email protected]. The proposal submission deadline is September 6, 2024.
Executive Director’s Report
The meeting concluded with a review of notices of material change (MCNs) since the last Board meeting, as well as the current status of the Dana Farber Cancer Institute (DFCI) and Beth Israel Deaconess Medical Center (BIDMC) Cost and Market Impact Review (CMIR), a recap of the Health Equity Compact’s Health Equity Trends Summit held on Thursday, June 6, 2024, and a review of the HPC’s recent and upcoming publications.
A recording of the board meeting is available on the HPC’s YouTube page. Presentations and HEART-BP Investment program details are available on the HPC’s website.
