Presentation (CTI)

OBJECTIVES: Glucagon-like peptide-1 receptor agonists (GLP-1RAs) have demonstrated robust and sustained clinical efficacy in weight loss and are recommended for pharmacologic treatment of obesity. Despite proven efficacy and the potential to prevent additional comorbidities, Medicare coverage of GLP-1RAs for obesity remains limited. Recent policies such as the Inflation Reduction Act (IRA), introduce drug pricing mechanisms such as Medicare price negotiation and Most Favored Nation (MFN) pricing that may affect Medicare spending. This study estimated the 1-year pharmacy budget impact of expanding Medicare coverage for GLP-1RAs for weight loss under alternative pricing scenarios.
METHODS: A pharmacy budget impact analysis was conducted from the Medicare perspective over a 1-year time horizon. The target population included Medicare beneficiaries (69.0 million), of whom 7% were estimated to have obesity (BMI ≥30 kg/m²) without comorbid conditions already eligible for GLP-1RA treatment, as derived from Centers for Medicare & Medicaid Services (CMS) data. Annual drug costs were estimated using CMS Part D spending data adjusted to 2025 USD. Alternative prices, GLP-1RA uptake (10%), and market shares (56% for semaglutide [Wegovy], 39% for tirzepatide [Zepbound], and 5% for liraglutide [Saxenda]) were derived from publicly available sources.
RESULTS: Under current pricing, total projected annual Medicare GLP-1RA pharmacy spend was $2.5 billion (per member per month [PMPM]: $3.02; per patient per month [PPPM]: $431). Under IRA-negotiated pricing, the total cost lowered to $2.2 billion (PMPM: $2.67; PPPM: $382.00), and the total cost with MFN pricing lowered to $1.4 billion (PMPM: $1.67; PPPM: $237.88).
CONCLUSIONS: Expanding Medicare coverage of GLP-1RAs for obesity would increase short-term pharmacy spend. However, alternative pricing mechanisms, IRA and MFN, could mitigate these costs while potentially increasing patient access. While downstream cost offsets from effective obesity treatment still need to be investigated, this analysis provides important insight into the magnitude of drug-related costs to Medicare under expanded coverage scenarios.