Medicare Spending On Ozempic Sees Huge Spikes

Spending on GLP-1 drugs under the Medicare Part D program has increased dramatically in recent years, and the annual cost of these drugs in the United States  – upwards of $11,000 at recent list prices – has raised concerns about the fiscal impact of broad coverage of GLP-1 drugs on Medicare, other health insurers and patients, a KFF analysis finds.

GLP-1 drugs such as Ozempic, Wegovy and Mounjaro were initially developed to treat type 2 diabetes, but have demonstrated effectiveness in treating obesity and their popularity has grown as a result. These drugs are also being tested to treat other conditions, and the FDA has just approved a new use for Wegovy to reduce the risk of adverse cardiovascular events.

Medicare is prohibited under current law from covering drugs used for weight loss, but Medicare Part D plans can cover GLP-1s for their other medically-accepted indications, including to treat diabetes, and now to cut cardiovascular risk, based on a recent memo from the Centers for Medicare and Medicaid Services.

While the potential cost of authorizing Medicare coverage of anti-obesity drugs has presented a barrier to enacting legislation to lift the prohibition, covering these drugs under Medicare for authorized uses has already caused the medications to rank among the top-selling drugs covered by Part D, Medicare’s outpatient drug benefit program, the analysis found.

The analysis of new Medicare Part D spending data from CMS shows that total gross Medicare spending on Ozempic, Rybelsus and Mounjaro has skyrocketed in recent years, rising from $57 million in 2018 to $5.7 billion in 2022.


Spending on Ozempic alone increased substantially between 2021 and 2022, rising from a tenth-place ranking among the 10 top-selling Part D drugs in 2021, with gross spending of $2.6 billion, to sixth place in 2022, with spending of $4.6 billion.

In total, gross spending under Medicare Part D was $240 billion in 2022; Ozempic accounted for 2% of this amount. This is before taking into account rebates, which Medicare’s actuaries estimated to be 31.5% overall in 2022 but could be as high as 69% for Ozempic.

Because of the high level of gross Medicare Part D spending for Ozempic and Rybelsus combined as of 2022, the analysis said it’s possible that Medicare could select this product for drug price negotiation as early as 2025, which would be just over seven years past its earliest FDA approval in late 2017. If that happens, a negotiated Medicare price would be available beginning in 2027. This could lower total Medicare spending on the drugs in question.

Covering GLP-1s under Medicare Part D for authorized uses is already making a mark on total Part D program spending, and authors said this could be a sign of even higher spending to come as Part D plans are now able to cover Wegovy for its heart health benefits; as other uses for GLP-1s are approved; and as policymakers consider legislation that would authorize Medicare to cover obesity drugs.

Competition among GLP-1 drugs could have a moderating effect on launch prices and lead to higher rebates negotiated between manufacturers and pharmacy benefit managers, KFF posited.

While the drugs can offer tangible benefits, the combination of intense demand, new uses and high prices for these treatments is likely to place tremendous pressure on Medicare spending, Part D plan costs and premiums for Part D coverage.


A survey last fall from Accolade found that, while 81% of human resource decision-makers feel their employees would be interested in GLP-1 weight-loss medications, only 25% cover GLP-1s currently – but that figure is expected to double next year.

According to a recent study in the New England Journal of Medicine, if 10% of Medicare beneficiaries with obesity used Wegovy, the annual cost to Medicare could range from $13.6 billion – based on a 19% obesity rate from traditional Medicare diagnoses in 2021 – to $26.8 billion, based on a 41.5% obesity rate from survey data for adults ages 60 and older. Higher take-up rates would mean higher Medicare spending.


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