Big snag with GLP-1 program

Jay Goldberg

Submitted photo/InsideSources

The bridge, it turns out, is quite narrow. The vast majority of Americans who want or need GLP-1 medications won’t qualify for the $50 price they expected. All of this shows that government subsidies are not the answer to lowering GLP-1 medication costs. The GLP-1 Bridge Program will benefit a small subset of Americans in need, but to bring prices down for everyone, we need real healthcare reforms coupled with simple market solutions.”

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OPINION — When President Trump and Centers for Medicare and Medicaid Services Administrator Mehmet Oz announced the creation of the GLP-1 Bridge Program last year, many Americans might have thought the administration had cut a deal that would drop the price of GLP-1 medications to $50 per month for anyone looking to lose weight.  

They’d also be wrong to assume a prescription for GLP-1 medications would qualify for the bridge discount at most pharmacies. Something got lost in the mix. 

In reality, the $50-per-month co-pay applies only to Medicare patients, with taxpayers subsidizing the remaining $245 negotiated cost. Those on commercial insurance plans, employer-sponsored plans and most Medicaid programs were not included in the deal the federal government signed with Eli Lilly and Novo Nordisk. 

Even with Medicare, not everyone qualifies. To qualify, one must have a BMI of 27 or higher with a metabolic risk factor; a BMI of 30 or higher with kidney disease, heart failure or uncontrolled blood pressure; or a BMI of 35 or higher regardless of other conditions. In other words, not everyone on Medicare and who gets prescribed a GLP-1 by their doctor will automatically qualify for the $50-per-month co-pay. 

The bridge, it turns out, is quite narrow. The vast majority of Americans who want or need GLP-1 medications won’t qualify for the $50 price they expected. 

All of this shows that government subsidies are not the answer to lowering GLP-1 medication costs. The GLP-1 Bridge Program will benefit a small subset of Americans in need, but to bring prices down for everyone, we need real healthcare reforms coupled with simple market solutions. 

One major problem to tackle is the role of pharmacy benefit managers, firms that manage prescription-drug benefits for health insurers and large employers. 

PBMs act as middlemen who build the lists of drugs covered by insurance. The issue here is that their motivation to cover a specific drug is not driven by a commitment to ensuring that patients pay the lowest final price. Instead, they want to pocket the biggest rebate they can, which comes from the difference between a drug’s often high list price and the manufacturer’s discounts offered.  

These discounts are meant to be passed on to patients but instead end up in PBMs’ pockets. In fact, one estimate suggests that PBMs capture as much as 40% of gross drug revenue through rebate arrangements with drug manufacturers. If PBMs were paid under a fixed-payment model rather than through rebates, experts estimate this could lower drug prices for Americans at the pharmacy counter by up to 15%. 

The second avenue for savings is competition. Drug manufacturers and retailers have been in a race to the bottom on drug prices, including when it comes to GLP-1 medications. For example, Novo Nordisk launched its own NovoCare Pharmacy operation last year, lowering prices to $499 per month and saving customers $150.  

Eli Lilly also launched a self-pay channel for Zepbound single-dose vials to eliminate third-party supply chain costs, which helped cut prices. 

These market-based moves, driven by simple competition, led to durable lower prices. Within one year, Ozempic prices dropped by nearly $1,000 per month. It’s a remarkable summary of what a “free market” looks like in practice. 

Politicians always want to get involved and take credit for the lowering of drug prices, like bystanders who jump in front of an active parade. All we need from politicians is for them to set fair-market rules and then stand aside while prices come down for patients. 

If the government really wants to help Americans get lower drug prices at the pharmacy and lose weight with GLP-1s, tackle PBM reform. Free markets, not new government subsidies, are the best long-term solution to lowering drug costs and boosting public health.  

Jay Goldberg is the North American affairs manager at the Consumer Choice Center. He wrote this for InsideSources.com. Please submit comments at yourvalley.net/letters or email them to AzOpinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.