Oct. 23, 2023

Economic Impact of Obesity Meds

Economic Impact of Obesity Meds

As the popularity of weight-loss drugs continues to rise, the Congressional Budget Office is looking for new research on anti-obesity medications to see what the impacts could be. Ike Brannon, a Senior Fellow at the Jack Kemp Foundation, joins us to...

As the popularity of weight-loss drugs continues to rise, the Congressional Budget Office is looking for new research on anti-obesity medications to see what the impacts could be. Ike Brannon, a Senior Fellow at the Jack Kemp Foundation, joins us to chat about the potential drugs, what they mean for Americans, and how it would impact the congressional budget.

We also talk about a major Cigna settlement due to violations of the False Claims Act. 


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Ike Brannon  0:00  
So we need to think more broadly about societal benefits and not think about it in terms of the narrow impacts on the budget. So I think the problem with helping CBO trying to figure this out is there's just a little research on the potential health impact of these drugs assess impacts, health care costs and Medicare costs. But we've just begun thinking about all the other types of benefits that might be out there for society.

Terry Wilcox  0:29  
This week on the Patient's Rising Podcast, the Congressional Budget Office is calling for new research in the area of obesity. Why? We'll tell you, welcome to the patients rising podcast. I'm your host, Terry Wilcox, CEO of Patients Rising. I'm joined by my co host, who sat through nine straight screenings of Taylor Swift's new movie. I didn't even know she had a movie. Oh, come on. He's Bob Goldberg, co founder of the Center for medicine in the public interest, Bob, I focus on healthcare all the time. I don't I don't know anything about Taylor Swift and I don't care.

Bob Goldberg  1:06  
Well, I was a Swifty before she started dating Travis Kelce. I hope you know who Travis Kelce is.

Terry Wilcox  1:13  
I do. I do. I do. I know a little bit about it. I don't live under a rock. I just it's not these things don't interest me celebrities. You know,

Bob Goldberg  1:21  
However, Terry, I love your voice more. And talk about the new transition, I'd rather usher in a new era. That's the name of a movie for patients rights with you, and be with you on the podcast. And how about that?

Terry Wilcox  1:38  
Ah, Bob. That's very sweet. So today, speaking of patients, we're going to look at an interesting story that's developing slowly but surely, that could affect many of our patient listeners. The Congressional Budget Office, or CBO, which supplies Congress with cost estimates for many things, is looking for new research on obesity. The CBO is Director Phil Swagel posted a blog article asking for more research into the area of obesity, because they're taking a look at certain GLP1 drugs, which contain anti obesity medications. Now, Bob, those are called AOMs, and I was wondering if you could briefly tell us what those are and why they're being discussed right now.

Bob Goldberg  2:26  
So AOMs are part of the class of those GLP1 drugs that were originally developed to treat diabetes. It just so happens that many people realize that some of these drugs, such as Ozempic, and Rybelsus, which you may have heard of, also can help a person lose a lot of weight. However, these drugs are extremely expensive for a person paying out of pocket. As of September 2023, the list price for a four week supply of one of these drugs is nearly $1,500.

Terry Wilcox  3:05  
Well, that's terrific information, Bob, we managed to catch up with Ike Brannon. Now Mike is a senior fellow at the Jack Kemp Foundation, which aims to advance the American idea. Now I tells us what he thought of the recent blog post from CBO.

Ike Brannon  3:21  
The Congressional Budget Office is tasked with scoring legislation before it gets considered. And they don't have to do it right away. Right. Normally, they wait until a bill is had a hearing or being marked up. And so none of the bills that with mandate coverage of semi ___ or any of these other ones have made it through yet. But Phil Swagel, head of CBO felt like he needed to weigh in. So they issue not not a formal score, but they issued, I think they call it a blog post about a week ago. And he just laid out some of the issues. And the first thing he said, is this clear that 10s of millions of people would benefit from this, and we lose weight. And he said, Look, it's very difficult for us to score.

Bob Goldberg  4:02  
Like says that comes down to one simple question.

Ike Brannon  4:05  
The question is, if these drugs cost $1,000 or more, how much would that cost the government and the potential given the number of people who are clinically obese in the country? The potential costs could be enormous. So, you know, there have been some estimates that at the end of the decade, total money spent on these drugs could exceed $100 billion a year with a good proportion of that coming from the federal government.

Bob Goldberg  4:32  
Well, that sounds simple, right? But honestly, you know, understanding the impact of balancing of costs right now versus how much money would be saved is a tricky one. 

Ike Brannon  4:43  
There's a notion that if you were to help people lose a lot of weight, especially with clinically obese, a lot of their health problems would go away and would save Medicare and Medicaid money. And all he said was, you know, given the limited amount of data they have on this particular drug, they don't think that that would happen. If we looked at what happens when people have bariatric surgery or just lost weight, you know, through their own willpower, and they do see their healthcare costs go down, but not as much as you think. And so he said, but we just don't have any relevant data. So that's why he didn't do anything, we can't do a score, he said, basically it was a plea for more data.

Terry Wilcox  5:23  
Wow, I mean, it's pretty obvious why they need more information and input. I mean, the second quarter, Bob, the second quarter of this year, the net sales of these anti obesity medications or AOMs, in the United States amounted to $1.1 billion. Now, that's 65%, higher than in just the previous quarter, not the previous year, but the previous quarter. So these drugs are becoming popular in anybody, I don't know, anybody who's struggling with weight, who if you could give them a pill to help them along wouldn't want that? 

Bob Goldberg  6:01  
Yeah, in context, you know, we're spending, you know, much more on hypertension, drugs, and much more on anti cholesterol drugs, talking about, you know, for chronic illnesses. So, you know, in terms of how to consider its impact, we have to sort of apply, I think, the same metric that we've applied to other medicines in terms of their long term downstream benefit to patients.

Terry Wilcox  6:27  
Because a lot of these patients, I would guess, now, I am totally guessing, because again, like the CBO, I have no data, I need more. But a lot of the people who would be on these medications, to your point, Bob are probably on hypertension, medications and things like that. So potentially, this medication could allow them to go off some of those other medications, but also to his point, it may not like, it may just help a little bit. So there is a lot to really be discovered here, which is why you and I are constantly beating the drum about real world evidence, and, you know, just constantly continuing to gather this data because of all the different things they're trying to do to control cost of health care, and it's not just medications, but everything, most of that can be found in the real world evidence patient reported outcome data, right. So normally, the CBO weighs in with a score as legislation has passed, or is very close to passing. But that really isn't the case here. So why do we think the CBO is weighing in at all? Listen to Ike:

Ike Brannon  7:33  
I think they don't know what they should be doing right now. I think, they feel some pressure to weigh in on this. But they're not required to because there's no bill that's far enough along the process that it makes sense for them to score. But I'm sure Phil Swagel was feeling some pressure to indicate to members and others what, you know how they're treating it, what he put out there was not even close to scoring, I think he was just describing what he thinks they had to score today, based on the imprecise data that's out there, what they would likely come up with that it would not be a cost saver the way he does, it would probably end up costing the government some money.

Bob Goldberg  8:11  
So Ike adds that even when we are far enough down line for the CBO to give a score, there will always be things that are reflected that should still be taken into account.

Ike Brannon  8:22  
There are going to be big economic impacts some way and they have to think about that because those economic impacts affect the economy, they affect economic growth, they're going to ultimately affect revenue. We haven't even begun to think about what those might be. And those could be significant. And it might be even though we have significant economic effects, that those don't have big tax consequences. But nevertheless, it's something that our members of Congress need to take into account. If this thing ends up meaning the average person can work an extra year or two of their lives before they become infirm, like that would be tremendous for the economy and also for the well being of millions of people. Even if that doesn't show up in the tax scores. That's something that we need to think about. And I think that's one of my frustrations when the members rely on CBO is they think about it very narrowly in terms of its impact on the budget, and they're not thinking more wholly about how this benefits the economy or society writ large.

Bob Goldberg  9:20  
Well, that was well said. And I think it's a theme that we've woven into many of our shows over the last few years, Terry. 

Terry Wilcox  9:29  
I agree. 

Bob Goldberg  9:30  
So thanks to Ike Brannon for coming on the show and making sure we understand this important subject. And for more information on Ike and the Jack Kemp foundation, you can use the link in the show notes.

Terry Wilcox  9:48  
This episode of the patient's rising podcast is brought to you by the Patient Helpline. Have a question about medical transportation? On the search for resources to help you as a caregiver? Our helpline has answers. This free service will connect you with the solutions, information, and resources you need for your healthcare journey. Navigating the healthcare space can be daunting, and that's why we're here to help. To connect to the patient's rising helpline, head to the link in the show notes.

Bob Goldberg  10:21  
Now, before we go today, an important story from the news that we wanted to share with all of you, because it deals exactly with what we are all about here in Patients Rising: transparency, and transformation of healthcare.

Terry Wilcox  10:36  
Now Cigna for those of you don't know, Cigna is one of the top insurance companies, or what they like to call the BUCAs, which is Blue Cross, United, Cigna, and Aetna. They're the big conglomerate health care what Cigna is one of them, it may or may not be yours. Now Cigna is going to have to cough up $172 million to settle allegations that it violated the False Claims Act. Now allegedly, they did this by submitting false and inaccurate Medicare Advantage diagnostic codes to reduce reimbursements. Now, are we really surprised about this?

Bob Goldberg  11:21  
Come on, guys. Can't you think of a better way to steal money from the government? Just stick to the PBM markups.

Terry Wilcox  11:31  
I mean, it is just, it's insane. And it all came through a whistleblower lawsuit, which many of these things do and the lawsuit allege that Cygna's home care visit program, submitted inaccurate and untruthful patient diagnosis data to CMS in order to inflate the payments it received from CMS. Shock? What else would it be for? And it failed to withdraw the inaccurate and untruthful diagnosis data and repay CMS and falsely certified in writing to CMS that the data was accurate and truthful. Hence $172 million later, which they probably made a lot more than $172 million doing that. Maybe they didn't? I don't know. I have no idea. So I can't really speak to that. But I'm just knowing what I know about the things that can go on in supply chains or claims. It could be significantly more than that. And I'm sure it probably is, but they settled it. And they have to, you know, sign a bunch of documents and say they're not going to do it again.

Bob Goldberg  12:35  
Yea, write it 100 times on a chalkboard.

Terry Wilcox  12:37  
It's Bart Simpson: "I will not submit false claims, I will not submit those claims." You know, one of the questions you often ask when you hear stories like this is, you know, how can we fix these types of things. And I really think, you know, and Bob you may have a different take on this. But the only way to fix these types of things is to stop doing them and to have everything be more transparent. And part of it has to do with maybe, you know, you and I both know, sometimes maybe things are transparent, but the average person can't understand them. Since the average person can't understand them, then they're not that transparent.

Bob Goldberg  13:13  
I mean, if it's been going on for years, then it was a lot more than 172 million in the fact that people were either not getting care or they were using the plan members as their pawns to keep the scam going. So in terms of fixing wrongdoing, like you said, it's really in the hearts and minds of the people that are running these companies.

Terry Wilcox  13:39  
Well, I also think I agree with that not also, I think it just, you know, CMS has the authority to have a great deal of oversight over these plans, Medicare Advantage, all of them, even though they're being run by outside entities, they have full authority to provide oversight, and perhaps more of that should be instituted for these things. So yeah, that's that. I mean, that's the story of Cigna. We're not shocked by it. These things happen and wanted you folks to be aware of it. So we will link to that story in the show notes. And finally today, I wanted to let you all know that Patient's Rising is working on its latest report. This one is about formulary practices. The report goes through the history of formularies how formulary practices are harming patients and current reform efforts. So for those of you who don't know, when we're talking about a formulary, we're talking about like, we often tell you when you're searching for a new plan, find out what medications are covered on your plan, what tiers they're in how they're covered. That's what a formulary is a formulary is a tells you like "oh, if you're on this medication, for your arthritis, you will pay this. If you're on this medication, you'll pay this or these medications for arthritis aren't covered at all." If yours falls into that bucket, you might want to look for another plan. So formularies are sort of the makeup of what's covered and what's not covered in formulary spots. specifically speaks to medications, generally speaking. So that's what we're talking about in this document. There's a lot of what we feel are discriminatory formulary practices, meaning they take the more expensive drugs and put them on higher tiers and make patients pay more for them. They put them through arduous step therapy protocols, and other things like that implement copay, accumulators, or carve out plans for certain drugs. So it's just a document of sort of the beginning of a conversation for us as an organization. Bob, what are your thoughts on formulary practices and where they've come over the past week?

Bob Goldberg  15:38  
Do we have another three hours on the show? You know, this formulary management should transition away from all the garbage  we're talking about to right drug, right patient, let's look at the total impact on well being. We've got a long way to go. But that's the north star as far as I'm concerned. So Terry, that's all for today. But we have another episode right here next Monday. So follow us on your favorite podcast player so you can be notified as soon as a new episode is live.

Terry Wilcox  16:14  
Until next week for Dr. Bob and everyone at patients rising. I'm Terry Wilcox, stay healthy.

Transcribed by https://otter.ai