Why is There So Much Attention on Obesity Drugs?

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Today, Sen. Bernie Sanders and other members of the Senate HELP Committee will question the President and CEO of Novo Nordisk, the maker of Ozempic and Wegovy, about the drugs’ high U.S. prices.

These drugs have been making headlines in part because demand has risen for Ozempic, Wegovy, and other GLP-1 drugs, which have shown promise in treating people with diabetes, obesity, and other weight-related health issues. And, at their current prices, the drugs are expected to drive up insurer costs and premiums as well as Medicaid and Medicare costs.

ACA Marketplace plans cited the growing demand for GLP-1 drugs as a key driver of premium growth in 2025. Much like Medicare, which does not currently cover these drugs when used only for weight loss, most Marketplace plans only want to cover GLP-1 drugs when indicated for diabetes treatment. While private plans frequently employ utilization management strategies (like prior authorization or step therapy) in an attempt to limit costs to the plan, the growing demand is nonetheless contributing to premium growth.

While many large and wealthy nations are also grappling with growing demand for GLP-1 drugs, the list prices for Ozempic and Wegovy are significantly higher in the U.S. It is difficult to know exactly how much private insurers, employers, and health plan enrollees pay for these drugs after rebates or coupons. But even if an American took advantage of a monthly Wegovy coupon of several hundred dollars, the net price could still far exceed the price of Wegovy in Germany. GLP-1 drugs may soon be subject to Medicare price negotiations under the Inflation Reduction Act, but it is not yet clear how or whether those negotiations would affect prices for other payers.

The U.S. also has a significantly higher rate of obesity than peer countries, suggesting utilization of these drugs could further contribute to higher total spending. More than two in five adults (42%) who are under age 65 and have private insurance could be eligible for GLP-1 drugs under clinical criteria. Only about three percent of adults with employer coverage had a prescription that was paid for through their health plan in 2022 (the most recent year of claims data), but the share has been growing in recent years and is likely to continue.

The high price for GLP-1 drugs in the U.S. compared to its peers is not an anomaly. Americans often pay higher prices for other name-brand prescription drugs as well as physician and hospital services. But it’s hard to think of another type of drug that is so expensive and has the potential for so much demand as GLP-1 drugs do. It’s this combination of high prices and high potential demand for these drugs – and the implications for insurance premiums, public program costs, and affordability – that is garnering so much attention.