GLP-1s could become Medicare’s most expensive drugs

GLP-1 drugs could put a major strain on Medicare Part D’s budget in the future, according to a study published on August 27 in the medical journal Annals of Internal Medicine.

Many Medicare beneficiaries can’t get GLP-1 coverage because federal law currently doesn’t allow the program to cover drugs prescribed only for weight loss. But in March 2024, after clinical trial results published in November 2023 showed that semaglutide-based GLP-1s such as Novo Nordisk’s Wegovy can reduce cardiovascular incidents, Medicare announced that Part D plans could cover Wegovy for patients with an elevated body mass index (BMI) and “established cardiovascular disease.”

Medicare has yet to provide an exact definition of established cardiovascular disease, so it’s unclear how many beneficiaries would qualify for the coverage. But even conservative estimates have researchers projecting that GLP-1s such as Wegovy could become Part D’s most expensive drugs.

The study found that 3.6 million people (14.2% of Medicare beneficiaries) were “highly likely” to be eligible for Wegovy coverage if Medicare used a more conservative definition of established cardiovascular disease, and up to 15.2 million people (60.9% of beneficiaries) could be eligible if Medicare went with a more liberal definition. Researchers based the potential definitions on criteria such as prior history of cardiovascular disease or higher BMI levels.

In the more conservative estimate, maximum Part D spending could see an additional $34 billion per year, the researchers found, while spending in the more liberal estimate was calculated to reach an added $145 billion per year.

Currently, the drug that costs Part D the most money annually is a blood thinner called Eliquis, according to the Centers for Medicare and Medicaid Services. The program spent $18 million on it in 2023.

The bigger picture. Medicare Part D already covers GLP-1 drugs for use in diabetes patients, and spending on the drug class has catapulted in recent years from $57 million in 2018 to $5.7 billion in 2022, according to an analysis from health policy research firm KFF.

Employers have also expressed concerns about their ability to cover GLP-1s given the drugs’ increasing popularity. A recent survey from nonprofit Business Group on Health found that employers expect healthcare costs to rise roughly 8% in 2025, largely driven by increased spending on GLP-1 coverage, Healthcare Brew previously reported. Nearly 80% of employers reported in the survey that they’ve seen an increase in interest for GLP-1s.

“It is therefore no surprise that 96% of employers expressed concern about the long-term cost implications of GLP-1s,” the survey read.