A 60 Minutes dud

Last Sunday's segment on the latest weight-loss drug misses the mark on pricing and savings

You know 60 Minutes has hit its sweet spot when tears start welling up in your eyes. On Sunday night, that moment came near the end of the last segment, which touted a new drug that leads to “dramatic weight loss.”

Correspondent Lesley Stahl had introduced her piece by noting Wegovy, manufactured by Novo Nordisk, is “wildly expensive.” It costs more than $15,000 a year and many insurers are balking at covering it. Thus, the insurance industry became the target of the piece.

Stahl never asked the company, which, as she disclosed, is a major advertiser on 60 Minutes, to justify that price. Instead, Stahl gave extensive airtime to two physicians from Harvard Medical School, Dr. Fatima Stanford and Dr. Caroline Apovian, who are paid advisers to Novo Nordisk, which she also disclosed.

The physicians’ extensive comments focused on the brain signaling science behind the new drug. They claimed the primary cause of obesity is genetics, not over-eating, sedentary lifestyles, carbohydrate overloading, or, any other explanations for an obesity rate that has grown to 42% from 13% over the last 50 years, a period when, presumably, our genetic make-up hasn’t changed.

They also attacked the stigma attached to obesity, including among physicians, which prevents people from seeking treatment (fair enough). And, in their enthusiasm for Wegovy, they concluded that changing diet and exercise patterns on their own will never make a dent in the obesity epidemic, which if left unaddressed will exponentially increase incidence of Type 2 diabetes, cardiovascular disease and some cancers over the next several decades.

“Don’t you think people walking down the street, stigmatized and shunned, would lose weight if they could?” Dr. Apovian asked. “We have this fabulous, robust medication that is very effective and safe, and we can’t give it to them because insurance won’t cover it.”

Stahl closed the piece by informing Nicole S., one of the two obese patients featured in the segment, that her insurance company announced it will begin covering Wegovy this year, a turnaround that came only after 60 Minutes sought comment. Nicole responds: “This is great. This is great.” Tears of joy flowed as she hugged a fellow patient, who had lost 50 pounds on the drug. “Wow. Wow,” Nicole said.

Price is the issue

Wegovy, approved by the Food and Drug Administration in June 2021, is without doubt the most successful weight loss drug ever to hit the U.S. market. After one year, when compared to placebo, it lowers total weight by at least 10% in two-thirds to three-quarters of the obese patients who enrolled in its four clinical trials. Patients in both arms of the trials also received regular counseling to modify their diet and exercise routines.

Another drug in its class (liraglutide) performed less well in its FDA approval trials. And the generic combination of phentermine and topiramate accomplished at least 10% weight loss in just under half its obese users. Its upside: The combined price is one-tenth of Wegovy’s.

Are insurers really the bad guys here? Or is Wegovy way overpriced?

With 41.9% of the U.S. adult population considered obese, the potential market for a highly effective drug for losing weight is huge. But Novo Nordisk isn’t interested in treating the 8 million Americans who are severely obese with the drug. Nor is it interested in tapping into the 72 million who are “merely” obese.

That would require targeting poor people in both urban and rural areas (where the obesity epidemic is most intense); are without access to healthy foods; whose poverty leads to unhealthy eating habits and lifestyles; and who are disproportionately Black and Hispanic. In other words, it would require targeting populations that are un- or under-insured and cannot afford the price or the co-pays attached to a $1,300-per-month drug.

Instead, the company is aiming for the well-insured. And 60 Minutes is allowing itself to be used to browbeat insurers into covering the medication.

The tactic seems to be working. Demand for the drug was so high last year that doctors who wanted to prescribe found it in short supply. Novo Nordisk recently postponed the rollout of the drug in Europe, where it has also been approved, in order supply the more lucrative U.S. market. It will need less than a half million users to generate its projected $3.7 billion in sales by 2025 at its current U.S. price tag.

Well, insurers should cover the medication. The issue that 60 Minutes should have addressed is it price. Why is it so high?

Accidental discovery

Novo Nordisk didn’t set out to create a weight loss drug when it began clinical trials for semaglutide, which was initially developed as a new medication for treating Type 2 diabetes.  While conducting approval trials for what became Ozempic in 2017 after approval by the FDA, it discovered that one of the side effects of the drug was a sharp drop in weight among many of its users.

It then ran a second set of trials in a few thousand patients, mostly women, few of them minority, with weight loss as its endpoint. That led to its 2021 approval as a weight-loss drug – same drug, slightly higher dose, a new set of patents, and a new name: Wegovy.

After the clinical trial results became known, Novo Nordisk paid Sean Sullivan, a professor in the school of pharmacy at the University of Washington and a former member of the Medicare Evidence Development and Coverage Advisory Committee, to organize a cost-effectiveness study of semaglutide for weight loss. The lead author of the study, which was published last July in the Journal of Managed Care & Specialty Pharmacy, was a Novo Nordisk employee. The eight other listed authors were also either employees or paid consultants for the company. The study was written by an outside consulting firm hired by Novo Nordisk.

In cost-effectiveness studies, researchers use data from FDA approval trials and other studies to measure the health benefits of new medical interventions, including extended life, reduced morbidity, and improvements in quality of life. The results are expressed as the number of “quality-adjusted life years,” or QALYs, gained by an innovation. The researchers then measure the economic cost of the new intervention compared to the existing standard-of-care, including the cost of the treatments, doctor visits and future hospitalizations for both. The additional cost of the new intervention is then compared to the added health benefits with the resulting ratio expressed as dollars-per-QALY.

Payers, providers, and patients can use these ratios to compare the value of competing health care interventions by calculating the additional cost per QALY for new drugs, devices or surgeries over the existing standard of care. In Europe, many countries refuse to pay for interventions that exceed $50,000 per added QALY. In the U.S., the federal government is prohibited by law from using it to set prices.

The Novo Nordisk-funded study estimated the cost for Wegovy at its current price tag at anywhere from $23,556 to $144,296 per QALY gained. The paper concluded that Wegovy was cost-effective under a “willingness to pay” threshold of $150,000 per QALY.

That’s not the conclusion reached by the independent Institute for Clinical and Economic Review (ICER), a Boston-based non-profit that conducts cost-effectiveness studies of drugs, medical devices, and other health care interventions. Their comprehensive study of all weight-loss drugs, released last August, showed Wegovy at its current price racked up $236,000 in costs for every QALY gained.

ICER’s conclusions, which are often used by insurance companies when setting formularies and reimbursements, are that Wegovy’s price would have to come down substantially to reach standard benchmarks for “willingness to pay.” At $150,000/QALY, that would require lowering the price to $9,700 per year; at $100,000/QALY, that would be $7,500 per year; and at $50,000/QALY – the standard often used in Europe – the price would need to be reduced to $5,300.

One intervention does save money

It's important to point out that there was no difference between the two reports on one vital question: Wegovy does not save the health care system money. Every QALY gained through weight reduction will cost payers and patients more money than they will save by reducing other health care costs.

Indeed, all of the weight reduction drugs cost the system more, according to ICER, with one exception. Because the generic phentermine/topiramate is substantially less expensive than Wegovy, it not only meets the commonly-accepted cost-effectiveness threshold of $50,000 per QALY, it “is actually cost-saving when prescribed generically.”

Unfortunately, that is not what 60 Minutes, the most watched news program on television, informed its viewers on New Year’s Day. “If they (insurers) covered it, overall health care spending would probably come down,” Stahl said.

No it won’t. It will go up. By a lot. And if her researcher-reporters and producers had done their homework, she would have known that.

This post was updated on January 6, 2023 to include an accurate description of cost-effectiveness research.

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