Elevance, CVS Health Are First Medicare Insurers To Cover Novo Nordisk's Weight Loss Sensation Wegovy

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Elevance Health, Inc. Common Stock




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Some major U.S. health insurers, including CVS Health Inc (NYSE:CVS), Elevance Health Inc (NYSE:ELV) and Kaiser Permanente, will start reimbursing for Novo Nordisk A/S’s (NYSE:NVO) Wegovy, a popular anti-obesity drug, for specific individuals on Medicare who have heart-related conditions

These insurers have committed to covering Wegovy for individuals meeting specific criteria, including those with cardiovascular disease and meeting body-weight standards under Medicare drug-benefit plans.

Additionally, Elevance Health has extended coverage to individuals insured by commercial plans.

This move marks a significant shift as weight-loss drugs, including Wegovy, had previously been excluded from Medicare coverage due to U.S. legislation, and private health plans had been reluctant to reimburse them due to their high costs, according to The Wall Street Journal.

The decisions by these insurers aim to alleviate the financial burden on individuals who were previously paying over $1,000 out of pocket monthly due to lack of coverage, potentially increasing access to those unable or unwilling to bear the hefty expense.

The broader coverage of Wegovy by these insurers may prompt other Medicare and commercial health plans to follow suit, the Wall Street Journal noted, potentially leading to a substantial increase in drug spending for insurers already grappling with escalating healthcare costs. 

Wegovy, priced at around $1,349 per patient per month, presents a significant financial consideration for insurers.

The insurers’ decisions come following new guidance issued by the Centers for Medicare and Medicaid Services (CMS), permitting coverage of anti-obesity medications like Wegovy for additional medically accepted uses, such as reducing the risk of heart attacks and strokes in individuals with a history of heart disease and elevated body mass index. 

Earlier this month, the FDA approved Wegovy for expanded use in obesity and cardiovascular disease management.

In August 2023, Novo Nordisk released the headline results from the SELECT cardiovascular outcomes trial.

The trial achieved its primary objective by demonstrating a statistically significant and superior reduction in MACE of 20% for people treated with semaglutide 2.4 mg compared to placebo

As coverage expands, Elevance Health’s CarelonRx unit, responsible for managing pharmacy benefits, has approved Wegovy to reduce the risk of major cardiovascular events, with plans to roll out coverage to commercial and Medicare Part D plans. 

Similarly, Kaiser Permanente and CVS Health have announced their plans to offer Part D coverage of Wegovy in alignment with CMS guidance, with Humana Inc (NYSE:HUM) reviewing the new guidelines.

NVO Price Action: NVO shares are up 0.83% at $129.11 on the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image Via Shutterstock.

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