Delaware is grappling with the soaring costs of new weight-loss drugs like Ozempic, Wegovy, Mounjaro, and Zepbound, prompting state officials to consider significant changes to coverage for state employees, retirees, and their families. The State Employee Benefits Committee (SEBC) met on Friday, , to discuss options ranging from increased co-pays to complete elimination of coverage for these medications.
These glucagon-like peptide-1 (GLP-1) receptor agonists have gained widespread popularity for their effectiveness in aiding weight loss and offering both short- and long-term health benefits. However, their high cost – approximately $1,000 for a 30-day supply of Ozempic without manufacturer rebates – has made them a substantial pharmaceutical expense for the state’s Group Health Insurance Plan.
Currently, members of the state health plan pay $32 for a 30-day supply or $64 for a 90-day supply. Proposed changes could dramatically increase these co-pays to $120 and $200 respectively. A more drastic option under consideration is to eliminate coverage altogether for weight loss, a move estimated to save the state $179 million over the next three years. Continuing current coverage levels, however, is projected to cost nearly $211 million by .
The debate highlights a growing national challenge as states and insurers struggle to balance access to these potentially beneficial medications with budgetary constraints. Delaware began covering these drugs in , but claims have skyrocketed since then, putting significant strain on the state’s health plan.
Jeff Taschner, executive director of the Delaware State Education Association and a member of the SEBC, expressed concern over the potential for increased co-pays, stating that they could add $1,000 to $2,000 annually for some state employees earning as little as $25,000 per year. He questioned whether increasing costs for employees was the appropriate response to pharmaceutical pricing practices.
Brian Maxwell, chair of the SEBC and director of the Delaware Office of Management and Budget, voiced reservations about removing prior-authorization requirements for the drugs, fearing they would be “given out like Tic Tacs.” Removing these requirements, while potentially leading to increased rebates from pharmaceutical companies, could also allow individuals who are not clinically appropriate candidates to access the medications without oversight.
The discussion also touched upon the role of pharmaceutical companies and pharmacy benefit managers (PBMs). Delaware recently filed a lawsuit against multiple pharmaceutical manufacturers and PBMs, alleging they conspired to artificially inflate the prices of insulin and GLP-1 drugs. The lawsuit claims that manufacturers have dramatically increased prices despite decreasing production costs, and that PBMs prioritize profits over affordability by excluding cheaper alternatives from coverage.
Christina Tarabicos, a member of the public who addressed the committee, argued against adjusting coverage, emphasizing that eliminating coverage would delay treatment for a chronic disease and potentially lead to higher costs associated with related health complications. She questioned whether the committee was considering whether to treat a chronic disease early or pay more for its complications later.
Delaware Health Secretary Christen Linke Young suggested exploring opportunities to negotiate supplemental rebates from drug companies, citing the impending expiration of a key patent for a key ingredient in Ozempic and Wegovy in Canada, which could open the door for increased competition.
Interestingly, data from Delaware’s commercial insurance plans show that the cost of GLP-1s has remained relatively flat, with increased spending driven primarily by increased utilization. Insurance Commissioner Trinidad Navarro reported late last year that rebates from pharmaceutical manufacturers largely offset the cost of these drugs for those plans. However, his office lacks access to complete data from the state’s pharmacy benefit manager, hindering a full assessment of the impact on the state’s budget.
The situation in Delaware reflects a broader national trend. States across the country are re-evaluating their coverage policies for these drugs as demand and costs continue to rise. The SEBC is scheduled to make a decision on new coverage levels at 9 a.m. On , at the Delaware Department of Human Resources in Dover. Information about virtual attendance is available online.
The core of the issue isn’t necessarily the price of the drugs themselves, but the sheer volume of prescriptions being filled. As more individuals seek treatment for obesity and related conditions, the financial burden on state and private health plans continues to grow, forcing difficult decisions about access and affordability.
