💉💊 A Quick Q&A on weight-loss drugs ... with health economist Ben Ippolito

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Q&A

💉💊 A quick chat on weight-loss drugs ... with health economist Ben Ippolito

Ben Ippolito is a colleague of mine at the American Enterprise Institute where he researches health economics and policy issues, including the pharmaceuticals market, Medicare, and the effect of health care costs on American households. No surprise: Ippolito has also been closely tracking the rising popularity of drugs like Ozempic and Wegovy to treat obesity and diabetes. I thought I would ask him a few quick questions about those weight-loss drugs from an economist’s perspective:

1/ Are these new weight-loss drugs cost-effective, meaning that their value in terms of a better quality of life, a longer life and benefit to society exceeds their cost?

I think the answer is likely “yes.” I’ve done research that suggests payments to drug makers are roughly commensurate with the value of these products, based on what we know so far. And I wouldn’t be surprised if this becomes even more true. That is partly because competition between products may lower prices and because we are still learning about their clinical value. If new research confirms greater benefits to health, like fewer heart attacks or strokes, these products will be judged as even better values (or vice versa).

2/ How are insurance companies currently covering these drugs and how might that change in the future?

This is a major source of contention right now. In short, the products marketed for diabetes are often covered, but the same isn’t true for their sister products approved for obesity. The biggest coverage fight is in the Medicare program, where weight-loss products are excluded from coverage by law. Congress is sure to feel increased pressure to change that rule, but doing so could be very expensive.