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Cigna will cap how much insurance can spend on weight loss drugs as it tries to expand coverage

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Cigna will cap how much insurance can spend on weight loss drugs as it tries to expand coverage

Injection pens of Novo Nordisk’s weight-loss drug Wegovy are shown in this photo illustration in Oslo, Norway, Nov. 21, 2023.

Victoria Klesty | Reuters

Cigna on Thursday said it will limit how much health plans and employers spend on weight loss drugs each year in a bid to expand insurance coverage for those highly popular treatments.

The move comes as many insurers mull whether they should cover those drugs or drop them from their plans altogether due to their high costs. Americans have flocked to the treatments, along with similar diabetes drugs, despite their hefty list prices of roughly $1,000 per month or up to $15,000 per year.

The effort by insurance giant Cigna could make weight loss treatments more accessible. Most insurance plans cover diabetes treatments.

Cigna’s pharmacy benefits management unit will limit spending increases for weight loss and diabetes drugs to a maximum of 15% annually, a company spokesperson told CNBC. Currently, some health plans are seeing spending on the drugs rise 40% to 50% annually, according to the spokesperson. 

As part of that effort, Cigna’s Evernorth unit struck agreements with drugmakers Novo Nordisk and Eli Lilly, the spokesperson said. Cigna did not provide further details on what those agreements look like.

A spokesperson for Eli Lilly said employers should “prioritize solutions that facilitate access to comprehensive and patient-centered” obesity care, given how the condition affects people around the world.

Novo Nordisk did not immediately respond to requests for comment on the agreement with Cigna’s Evernorth.

The company called the effort the health-care industry’s “first financial guarantee” for coverage of the drugs, which are also known as GLP-1s. Those medicines treat weight loss and diabetes by mimicking one or more hormones produced in the gut to suppress appetite and regulate blood sugar.

Cigna said providing “financial predictability” through a cost cap will allow health plans and employers to better plan to manage GLP-1 spending. That, in turn, would help ensure broader access for eligible patients.

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Adam Kautzner, president of pharmacy benefits manager Express Scripts, said during the company’s investor day that the market for GLP-1s could grow to $100 billion by the end of the decade. Express scripts is owned by the Evernorth division. He called that a “completely unsustainable number” and said that Cigna’s insurance clients are “continuing to look to us for help.”

“Many of them want to preserve access for patients or expand access for patients to treat diabetes. But at the same time, you are seeing some that are pulling back as well,” Kautzner said during the event.

An October survey of 205 companies by the International Foundation of Employee Benefit Plans found 76% of respondents provided GLP-1 drug coverage for diabetes, versus only 27% that provided coverage for weight loss. But 13% of plan sponsors indicated they were considering coverage for weight loss.

The effort expands an existing program under the Evernorth unit called EncircleRx, which targets patients with diabetes, obesity and cardiovascular disease. 

Health plans and employers pay Cigna a separate monthly fee for that program. The program includes support for patients on the drugs, which are supposed to be accompanied by lifestyle changes such as diet and increased exercise.

Cigna is also working with Omada Health on services to help patients with behavior changes.

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