Medicare Can’t Afford Not To Cover Ozempic

“The question before Dr. Oz and his fellow CMS officials is whether Medicare should make an exception for GLP-1s,” says health expert Sally Pipes. “By any honest assessment, the answer is yes.”

Peter Dazeley

The Trump administration has yet to decide whether Medicare will cover a revolutionary new class of weight-loss treatments, which include drugs like Zepbound and Wegovy. But a decision could be imminent, according to Dr. Mehmet Oz, head of the Centers for Medicare and Medicaid Services.

Speaking at an event at the Aspen Institute earlier this month, Oz remarked that “These are market moving discussions,” and that “the best thing to say is, everybody is looking at it… We just got to find the right way to do it.”

At issue is whether these breakthrough medications—known as glucagon-like peptide-1, or GLP-1, inhibitors—are worth their $700 to $800 monthly list price. But the cost of denying seniors access to these remarkable treatments is far higher.

Historically, Medicare has refused to cover weight-loss treatments, instead categorizing them as “lifestyle drugs.” The question before Oz and his fellow CMS officials is whether the program should make an exception for GLP-1s.

By any honest assessment, the answer is yes.

America’s ongoing obesity epidemic costs an estimated $173 billion in medical spending each year. After accounting for obesity’s larger economic and social effects, the annual cost to our nation is now near $1.4 trillion, according to the Milken Institute.

Then consider the mounting bill for diseases related to obesity. Cardiovascular conditions like heart disease and stroke cost our country over $233 billion a year in medical spending and another $184.6 billion in lost productivity. If current trends continue, the economic burden from cardiovascular illnesses is expected to reach $2 trillion in 2050.

Seniors are hardly immune to this epidemic. On the contrary, about two-thirds of Medicare beneficiaries are either obese or overweight. GLP-1s are among the most powerful tools ever invented for helping people lose weight—and thus avoid the personal, social, and healthcare-related costs of obesity.

How effective are these medicines really? In one trial published in the New England Journal of Medicine, a version of the GLP-1 known as semaglutide—which is marketed in different doses and delivery mechanisms as Wegovy, Ozempic, and Rybelsus—helped patients lose 10% to 15% or even more of their body weight over the course of 68 weeks.

A separate placebo-controlled study found that patients given tirzepatide, another GLP-1 sold under the brand names Zepbound and Mounjaro, saw “reductions in body weight of 10% or more, 15% or more, and 20% or more from baseline than participants in the placebo group.”

These are astounding results. Failing to offer the benefits of these therapies with the millions of Medicare seniors with obesity would represent an unforgivable missed opportunity.

Some people argue that covering GLP-1s through Medicare would bust the federal government’s budget—to the tune of $35 billion between 2026 and 2034, according to the Congressional Budget Office.

That same report found that health-related savings from taking these medicines would total only $650 per patient in 2034—considerably less than the $4,300 per-patient cost of covering them.

But this kind of analysis underestimates the positive ripple effects of lowering the obesity rate—and particularly the potential improvements in people’s quality of life. After accounting for these factors, it’s clear that the benefits of covering GLP-1s vastly outweigh the costs.

A recent study by researchers at the University of Southern California’s Leonard D. Schaeffer Institute for Public Policy and Government Service estimates that the cumulative social benefits accruing from Medicare coverage of GLP-1s would total nearly $1 trillion over the next decade alone, or roughly $100 billion a year.

This kind of social benefit is hardly unprecedented in the world of drug innovation. As the authors of the USC study note, statins have proven so effective at fighting cardiovascular disease that, in just two decades, they’ve provided over $1.2 trillion in social benefits.

Those opposed to Medicare coverage for GLP-1s also tend to assume they’ll remain costly indefinitely. In reality, prices are certain to fall precipitously as competing products enter the market and the branded versions that currently dominate the market give way to low-cost generics.

Medicare should not treat GLP-1s as just another “lifestyle” drug. They represent a historic advance in treating one of our nation’s most pervasive and expensive chronic conditions.