Currently, only 50% of Cigna’s clients provide coverage for the widely-used GLP-1 weight loss medications, Wegovy and Zepbound, primarily due to their high price tags. However, Cigna’s pharmacy benefits division, Evernorth, has successfully negotiated an agreement with pharmaceutical companies Eli Lilly and Novo Nordisk, aimed at reducing costs for both employers and their employees.
Harold Carter, senior vice president of pharmacy relations at Evernorth, explained, “This solution is really focused towards clients that aren’t covering it today. It permits us to introduce the medications at a lower price point for the plan sponsor while also capping the cost for members at $200 per month.”
Presently, many of Evernorth’s clients offer these weight loss drugs with co-pays as low as $25 each month. By implementing a cap on out-of-pocket expenses for employees at $200, the cost becomes significantly lower than the cash price consumers would pay when purchasing these drugs directly from Eli Lilly or Novo Nordisk’s websites.
The newly brokered deal entails a streamlined pre-authorization process for the medications, allowing patients access to them at the same price whether they choose retail pharmacies or Evernorth’s home delivery service, according to company representatives.
Additionally, these enhancements will extend to existing Evernorth clients already providing coverage for the weight loss medications.
Carter noted, “Clients that currently cover weight loss medications can expect to see cost reductions of nearly 20% with this updated agreement we’ve secured with Lilly and Novo.” He emphasized that Evernorth was successful in negotiating better pricing while ensuring continued coverage for both drugs.
Recently, CVS Caremark announced a partnership to make Novo’s Wegovy its primary weight loss drug starting later this year, which may alter the preferred status of Eli Lilly’s Zepbound.
While Novo Nordisk refrained from commenting on the new pharmacy benefit arrangements, a spokesperson for Eli Lilly stated, “Lilly will continue collaborating with healthcare providers, government bodies, and industry stakeholders to devise innovative solutions that enhance access to Zepbound for individuals struggling with obesity.”
Net prices coming down
Though Cigna has kept details of the discounts achieved through its Evernorth strategy under wraps, analysts suggest that larger employers and insurers are securing discounts ranging from 30% to 50% below the official list price of the drugs.
Novo’s Wegovy is listed at $1,350 per month, though the average net price dropped to $616 as of March, according to an evaluation by the Institute for Clinical and Economic Review. For Zepbound, which has a list price of approximately $1,100, the net price stands at around $725.
The adjustments made by Evernorth and CVS Caremark could potentially further lower these net prices for employers, coinciding with ongoing government negotiations to secure discounts under Medicare for Novo Nordisk’s Ozempic and Wegovy in line with the Inflation Reduction Act.
The negotiated Medicare rates are set to take effect in 2027, thereby establishing Novo Nordisk’s products as preferred medications within the program. This scenario could lead to even further price reductions, as observed by Ben Ippolito, a senior fellow in health economics at the American Enterprise Institute.
Ippolito added, “Once a drug is negotiated, it must be included on Medicare formulary. Consequently, if you’re Eli Lilly, you’ll need to compete in the Medicare sector with a product that carries an artificially lower price. This will inevitably impact Eli Lilly’s strategy.”
Evernorth’s new pricing program for weight loss medications is scheduled to launch on July 1, aligning with employer decisions regarding coverage for the upcoming year.
— Finance Newso’s Angelica Peebles contributed to this report.
