The Intersection of Drug Prices, Insurance, and Obesity

There’s an ugly accident at the intersection of U.S. drug prices, health insurance, and obesity. In a report yesterday, NPR reporter Allison Aubrey described how people living with obesity, after finding at long last that they have an option to get their medical condition under control, learn that they’re at the mercy of excessive drug prices and capricious health insurance.

In Aubrey’s report, the case of Yolanda Hamilton illustrates the problem well. After her doctor prescribed semaglutide, her high BMI, blood pressure, and blood sugar all came down. Her health insurance from Aetna covered it. But then she got a new job and her new health insurance, Blue Cross and Blue Shield of Illinois, refused to cover the semaglutide. So she can’t afford the roughly $1,350 monthly cost, has had to stop taking it, and is losing all the gains in health that she previously enjoyed. She says:

“It gave me more energy. I was surprised by how good I felt. But now, I’m very frustrated about the weight coming back in so little time. If I gain more weight, I will be on more medications.”

So Hamilton and her doctor, Robert Kushner, are appealing the denial of coverage. Time and Hamilton’s health are slipping away in the midst of a stupid bureaucratic process.

U.S. Drug Pricing Without Guardrails

This ugly intersection of obesity, drug prices, and health insurance is uniquely bad in the United States. Because drug pricing is relatively unrestrained in our healthcare system. In theory, after a time, new drugs will lose their patent protection and generics or biosimilars will come into the market to drive prices down with increased competition. Patents for liraglutide start expiring this year.

But even so, the system is wide open to exploitation. For a case in point, consider Humira, which has been on the market for more than 20 years. The New York Times reports that AbbVie made $114 billion in profits by “gaming” the U.S. patent system and blocking competition that would otherwise have started by the end of 2016. So the price just keeps going up – with 30 price increases over the past 20 years. Since 2016 alone, the price has gone up by 60 percent to the point where it now costs more than $80,000 per year.

By comparison, one might think that $1,350 monthly for semaglutide is a bargain. But as valuable as it is, it’s not a bargain. The Institute for Clinical and Economic Review recently concluded that the price would need to come down by more than a third in order to meet benchmarks for cost effectiveness.

Health Insurance Adds Further Problems

The problem is worse because of the difficulty in getting insurers to cover the cost for obesity care. They’re stuck in the past where people commonly pretended obesity could be cured for free through willpower and good character.

So indeed, we have a very messy accident at the intersection of drug prices, health insurance, and obesity. It’s time to clean it up.

Click here for the report from NPR and here for detailed insights on problems with U.S. drug pricing.

Deployment-Intersection, painting by Amadeo de Souza-Cardoso / WikiArt

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January 31, 2023