Regulatory vs. Payer and Employer Expectations in Chronic Weight Management in the US
Regulatory vs. Payer and Employer Expectations in Chronic Weight Management in the US
Article written by Mark Kohler, Windrose Consulting Group
The FDA issued guidance for new products in chronic weight management setting a threshold for their efficacy to be at least a 5% mean change from baseline in body weight vs. placebo at 1 year. However, Wegovy and Zepbound have demonstrated significantly higher changes from baseline (15-20%). Even with their significant improvement in efficacy, US payers and employers have higher expectations for chronic weight management products in order to be included on the standard formulary. Even on self-insured or employer-sponsored plans, payers still have more stringent reauthorization criteria in comparison to the minimum expectations established by the FDA guidance.
The blockbuster products Wegovy and Zepbound surpassed $8.3 billion in sales in the first three quarters of 2024 ($5.3B for Wegovy and $3.0B for Zepbound) and will increase in 2025 [1,2]. Analysts expect the chronic weight management global market could reach ~$150 billion by the early 2030s [3]. These projections have led companies to continue to invest in developing new therapeutics in the chronic weight management setting, with over 40 novel therapeutics currently in Ph 2 and Ph3 trials [4]. However, the FDA recently issued draft guidance introducing an efficacy threshold for approving new agents as well as considerations in other comorbid populations [5].
Key Points from FDA Guidance
Demonstrate at least a 5% mean change from baseline in body weight versus placebo [6] after 1 year of treatment at the maintenance dose
Evaluate sufficient patients with type 2 diabetes to assess the efficacy and safety in this subgroup, in either dedicated trials or in adequately powered subgroups
Would “most likely require” sponsors to demonstrate that they can lower the risk of cardiovascular morbidity or mortality linked to improvements in most or all components of the metabolic syndrome, or present some other clinically meaningful benefit that outweighs the potential risks of treatment
FDA Guidance vs. Payer Coverage of Wegovy and Zepbound
Given the rapid growth and expected expansion of this market in the next five years, guidance on trial design and efficacy minimums are beneficial for manufacturers to support development requirements. However, a 5% change in body weight from baseline vs. placebo is comparable to the efficacy of older products such as Contrave (naltrexone / brupropion) and Saxenda (liraglutide) which were not considered to be clinically meaningful by payers, employers and physicians [7,8]. Moreover, Wegovy (semaglutide) and Zepbound (tirzepatide), have demonstrated a significant improvement in efficacy well above the FDA efficacy threshold.
Table 1. Overview of Recently Approved Products
Payer Coverage of Chronic Weight Management Products in the US
In Medicare, chronic weight management products are excluded from coverage as they are categorized as lifestyle treatments by CMS, despite the fact that 22% of Medicare beneficiaries [9] (11.7M) [10] are considered obese (BMI > 30). Following Medicare’s lead, nearly all commercial managed care organizations exclude these products from their standard benefit. Access is therefore currently limited to individuals whose employers opt-in to a weight-loss rider.
An employer rider is an optional add-on to an employee's health insurance policy that provides additional coverage. Riders can be selected by the employee or the employer and may be included in the base coverage.
Wegovy and Zepbound’s impressive incremental efficacy has led to a significant increase in the number of employers opting in to riders for chronic weight management compared to when only older products (that led to a ~5% change in body weight) were available. Recent primary research with commercial payers covering ~100M lives suggests that 40% of the commercially insured population (~45-50 million individuals) have access to these products. But while coverage has increased for self-insured or employer-sponsored beneficiaries, the parameters for coverage are higher than the recent FDA recommendations.
Despite having access via employer riders to the FDA approved labels for chronic weight management, ~50% of the commercially covered lives have reauthorization criteria on Wegovy and Zepbound that require a reduction in body weight from baseline of ≥5% by ~6 months, a target that is sooner than the FDA guidance of 1 year. The remaining 50% of lives have even more stringent criteria, typically requiring a 10% weight reduction from baseline. It’s clear that both commercial payers and employers expect higher levels of efficacy to continue treatment, and as such, new medications that narrowly pass the FDA standards are highly unlikely to meet the payer and employer-determined efficacy expectations for rider coverage.
Draft Guidance on Obesity and Overweight: Developing Drugs and Biological Products for Weight Reduction: https://www.fda.gov/media/71252/download
Regulatory vs. Payer and Employer Expectations in Chronic Weight Management in the US
Article written by Mark Kohler, Windrose Consulting Group
References:
Eli Lilly and Company Product Revenue Report Q3 2024. Accessed January 14, 2025. https://investor.lilly.com/financial-information/quarterly-results
Novo Nordisk Financial Report for the period 1 January 2024 to 30 September 2024. Accessed January 14, 2025. https://www.novonordisk.com/investors/financial-results.html#results2024.
Beasley, D. (2024, May 28). Weight-loss drug forecasts jump to $150 billion as supply grows. Reuters. Accessed January 14, 2025. https://www.reuters.com/business/healthcare-pharmaceuticals/weight-loss-drug-forecasts-jump-150-billion-supply-grows-2024-05-28/
Internal analysis of clinicaltrials.gov
FDA (2025, January). Obesity and Overweight: Developing Drugs and Biological Products for Weight Reduction. Accessed January 8, 2025. https://www.fda.gov/media/71252/download
Placebo would include at a minimum a standard-of-care diet and physical activity program.
Saxenda (liraglutide) [package insert]. Novo Nordisk; 2010
Contrave (naltrexone / brupropion) [package insert]. Currax Pharmaceuticals; 2014.
Centers for Medicare and Medicaid Services. Mapping Medicare Disparities by Population. Accessed January 14, 2025. https://data.cms.gov/tools/mapping-medicare-disparities-by-population
Cubanski, J. (2024, October 8). A Current Snapshot of the Medicare Part D Prescription Drug Benefit. Kaiser Family Foundation. Accessed January 14, 2025. https://www.kff.org/medicare/issue-brief/a-current-snapshot-of-the-medicare-part-d-prescription-drug-benefit/