High Medication Cost Leads State Health Plan to Consider Removing GLP-1 Drugs from Coverage
RALEIGH – NC Treasurer Dale R. Folwell, CPA, is calling today for the State Health Plan Board of Trustees to end coverage of popular GLP-1 drugs like Wegovy and Saxenda for the purpose of weight loss until the drugs’ manufacturer, Danish multinational Novo Nordisk, prices the drugs fairly.
“It defies logic that Novo Nordisk can sell the exact same product in the Netherlands for $296 per month and in the United States for more than $800 per month,” Treasurer Folwell said. “They should be investigated by the Federal Trade Commission for unfair and deceptive business practices.”
Because of financial pressures, the State Health Plan’s Board of Trustees is considering removing coverage for the popular drugs. Currently, the Plan faces a $4.2 billion budget gap over the next five years. The recently enacted budget from the state legislature funded the Plan by $240 million less than was requested over the next two years.
The Plan has attempted to remain financially solvent by capping or reducing its costs as much as possible and by implementing strategic initiatives that seek to maintain or lower dependent premiums to attract younger members and families.
The weight-loss medications are currently used by more than 23,000 members on the Plan with a net cost of more than $800 per member per month. Plan spending on the two medications is projected to exceed $170 million in 2024 jumping to more than $1 billion over the next six years.
Novo Nordisk recently reported a 32% increase in global operating profit for the first six months of 2023 relative to the first six months of 2022. Within that report, Novo Nordisk said Wegovy sales in North America increased by 344% during the same period while Saxenda increased by 27%. Total North American sales for both products were reported as 14,159 million Danish kroners or $2.02 billion U.S. dollars.
The Plan spent $52.3 million on these two medications during the first half of 2022 accounting for 2.6% of the manufacturer’s entire North American profits on these products. During those same six months, Plan members in North Carolina accounted for approximately 2% of the prescriptions filled each month for these medications in the United States.
The Plan’s staff estimates that continuing to cover this class of drugs for weight loss will result in a premium increase of $48.50 per subscriber per month doubling the premium for individual subscribers. Additionally, the cost of these drugs alone equates to a .5% pay raise for every state employee. Maintaining the current benefit structure for these medications will significantly impact the Plan’s strategic financial goals, reduce its solvency, and halt the Plan’s ability to lower member and family premiums.
“We are not questioning the efficacy of the drugs, but we simply can’t afford these medications at the manufacturer’s current price point,” said Treasurer Folwell. “It’s price gouging. We just want to pay the same price that Novo Nordisk charges its customers in their home region.”
The State Health Plan, a division of the Department of State Treasurer, provides health care coverage to more than 740,000 teachers, state employees, retirees, current and former lawmakers, state university and community college personnel, and their dependents.
AMEN AMEN AMEN!!! It’s about time. Just what does NOVO contribute to Johnston County? Most of their employees do not live here. Most of their employees don’t eat here except for executives. We get NO deals on their products. Their philanthropy is PATHETIC. Just what do they do for Johnston County? Good job, Dale Folwell!
Once again, Big Government is butting in where it doesn’t belong. Here in AMERICA we let the FREE MARKET dictate prices. Having the government set and dictate prices is one step away from SOCIALISM. Folwell is letting his true SNOWFLAKE, LIB, DEM, SOCIALIST face shine. Where are the true conservatives of the GOP? They’re obviously not in the office of the State Treasurer. #VoteOutIncumbents
I don’t see that as the case. It is a free market, but a company who is in NC shouldn’t be charging that much more than in another country for the same drug. The free market can dictate prices, but it doesn’t dictate what insurance will cover. The problem is the patents which allow ONLY these companies to produce them for a set amount of time. That is not in line with a free market. That is a monopoly! It will cost everyone (even people who don’t use the drug) more for healthcare coverage. That’s the issue!