Treasurer Folwell Seeks Help To Lower Costs Of Expensive Weight-Loss Drugs

RALEIGH – State Treasurer Dale R. Folwell, CPA, and the State Health Plan (Plan) have issued a Request for Information (RFI) asking the public for help in lowering the cost of GLP-1 drugs for treating obesity. In January, the State Health Plan Board of Trustees (Board) voted to end coverage of popular GLP-1 drugs like Wegovy and Saxenda for the purpose of weight loss starting on April 1, 2024, citing their high cost. Treasurer Folwell and members of the Board have implored the drugs’ manufacturer, Danish multinational Novo Nordisk, to price the drugs fairly. To date, they have refused.

Also during the meeting, the Board directed Plan staff to explore options that would allow members who most need these medications to obtain them under a fiscally sustainable model informed by medical necessity and long-term cost-effectiveness. To that end, the Plan is issuing the RFI to gather ideas and solutions from the marketplace.

The RFI is the latest attempt by the Plan to find a way to provide these obesity medications for its members in a financially sustainable way. Currently, the Plan faces a $4.2 billion budget gap over the next five years. The most recently enacted budget from the state legislature funded the Plan by $240 million less than was requested over the budget period.

Prior to excluding coverage of the drugs for weight loss, the medications were used by more than 23,000 members on the Plan with a net cost of more than $800 per member per month after rebates. Plan spending on the two medications was projected to exceed $170 million in 2024, jumping to more than $1 billion over the next six years.

“We are trying everything we can to be able to provide these drugs to the members of the Plan that need them the most,” Treasurer Folwell said. “All we are asking is to be treated fairly and not to be price-gouged by the manufacturers.”

Treasurer Folwell further noted that Novo Nordisk sells the exact same product in the Netherlands for $296 per month and in the United States for more than $1,000 per month. A recent study published by the JAMA Network provides a reasonable analysis of the cost of producing these medications, placing the monthly production cost of the GLP-1s like Wegovy at $72. The State Health Plan was paying 11 times the estimated production cost.

The RFI is intended to collect information, recommendations and potential solutions for the Plan to consider regarding the feasibility of providing benefit coverage to Plan members to use GLP-1, GIP-GLP-1 agonists, and other similar new molecular entities, for the purpose of weight loss in a manner that is financially sustainable for the Plan.

“We are hopeful that someone or some company will help us find an affordable way to offer these drugs to our members,” said Treasurer Folwell. “Our attempts to get the manufacturers to lower the cost for those that teach, protect and serve have, to date, been unproductive.”

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.