All of Uma Gunasekaran’s patients have diabetes, and most are uninsured. The most severe cases might end up with amputated limbs or on dialysis. Gunasekaran, an endocrinologist who runs Parkland Health’s Global Diabetes Program, in Dallas, relies on the benevolence of multibillion-dollar pharmaceutical companies to supply her patients with medicines at no cost.
Among the array of diabetes treatments, those in greatest demand are part of a relatively new class of drugs. These are sometimes referred to broadly as Ozempic, after the brand name of the best-known drug of its kind on the market. They work by mimicking the effects of a hormone produced in the gut, glucagon-like peptide-1, or GLP-1, which regulates blood sugar, slows the stomach’s emptying process, and fosters a sensation of fullness that, in turn, curbs appetite. “We’ve never had anything like it,” Gunasekaran said. “Unfortunately it’s not something I’m able to offer to my patients here, because it’s too expensive.”
Of the many diseases that afflict Americans, diabetes is the costliest. The most recent data available, from 2012, found that Texans received close to $26 billion worth of diabetes care. That figure is almost certainly higher today. Over the past decade, the rate of diabetes has nearly doubled in the state, to 12.3 percent, and in some areas, such as along the Mexican border, more than 30 percent of the population has the disease. Another 34 percent of Texans are on the verge of developing diabetes.
Meanwhile, clinical studies have shown that GLP-1 medications can not only prevent the onset of diabetes, but also reduce the risk of heart failure, kidney damage, nonalcoholic fatty liver disease, and a host of other deadly conditions. Doctors have taken to describing the drugs as game-changing—or even miracle drugs. So, given the high costs of diabetes care, could health systems and insurers save money by making GLP-1 medications available for free, or at exceedingly low costs, to all patients with the condition or at risk of developing it?
Three economists from the Massachusetts Institute of Technology and Stanford sought to answer that question. They crunched the numbers on providing Ozempic for free to all Americans with obesity, a chronic disease linked to a host of health issues, as well as 53 percent of new cases of type 2 diabetes each year.
The total cost to state and federal governments at current prices, according to their analysis, would top $1 trillion per year. That figure doesn’t account for providing Ozempic to diabetics who aren’t considered obese, and it far exceeds the more than $307 billion spent on medical care for diabetes and the estimated $106 billion more lost to reduced productivity because of the disease nationwide in 2022. In other words, “it would be budget busting,” said Jonathan Gruber, coauthor of the study and chairman of the economics department at MIT.
But the study’s numbers assume the government hasn’t negotiated for a better deal and is stuck paying the full retail price for the drugs. Medicare Part D spent $5.7 billion in 2022 on the GLP-1 drugs Ozempic and Rybelsus—both made by Danish pharmaceutical giant Novo Nordisk—and Mounjaro, made by Eli Lilly. At such costs, it is little wonder that the market for these medications is valued at more than $47 billion in 2024, and at least one projection expects it to grow to more than $471 billion by 2032.
Today Ozempic’s list price is a smidge under $1,000 per month per patient, while Wegovy runs $1,350. At least one analysis, however, suggests that insurers are paying significantly less than that, between one-half and two-thirds lower, while Mounjaro may be going for 80 percent less than its $1,015 per month list price. There are also efforts to bring prices for the uninsured down as well, including a U.S. Senate committee investigation into how much is charged by Novo Nordisk for Ozempic and Wegovy, both of which can reportedly be made for less than $5 a month.
As similar drugs enter the market, competition likely will reduce costs as well. And the eventual introduction of inexpensive versions of GLP-1 medications could transform the market entirely. Pharmaceutical companies in China and India are readying biosimilars for when patent protections expire there in a couple of years. Made from living organisms, such as bacteria or yeast, biosimilars are nearly indistinguishable from their reference drugs. Importantly, they’re also inexpensive, which might compel the likes of Novo Nordisk and Eli Lilly to lower prices. That’s unlikely to happen in the United States until at least 2031, when the patent for the active ingredient in Ozempic expires.
Though GLP-1 drugs were designed to treat diabetes, it is their dramatic effect on weight loss that has most captured public attention. Patients shed between 15 and 20 percent of their body mass, sometimes more. That’s a big deal, especially in Texas, where more than 35 percent of the population is obese. “What we see is that this is now kind of lifesaving-type medication therapies that are also obesity treatments,” said Jaime Almandoz, medical director of the Weight Wellness Program at UT Southwestern Medical Center and an associate professor of internal medicine.
Yet even as Medicaid, Medicare, and some employer-sponsored insurance plans now pay for some GLP-1 medicines to treat diabetes or reduce cardiovascular risk, by one estimate, a mere one percent of patients who need these drugs manage to get them. In deciding which medications to cover, Almandoz says, insurers fail to recognize that addressing obesity, a significant risk factor for type 2 diabetes, can also mean treating or even preventing that disease. But it could become easier for doctors to prescribe these medications to obese patients since GLP-1 drugs received FDA approval in March to reduce the risk of cardiovascular death, heart attack, and stroke. Overweight Americans are at higher risk for these medical emergencies.
Even so, the state’s largest employers are reluctant to insure employees for weight loss, according to Leah Whigham, director of the Center for Community Health Impact and the El Paso Nutrition and Healthy Weight Clinic, at the El Paso campus of the UTHealth Houston School of Public Health. “They are thinking, ‘Should these people with obesity deserve to have these medications covered?’ ” said Whigham, adding that it’s because of a misunderstanding that obesity is a lifestyle choice rather than a chronic disease. “It’s now getting to the point where one could argue it’s unethical not to cover these medications.”
The demographics of who does and doesn’t have access to GLP-1 medicines adds another layer of complication to the conversation. “The people that are currently on these drugs are 85 percent white,” said Simon Haeder, a professor of public health at Texas A&M University. “If you talk about Medicaid and the people that don’t have access to it right now, that’s disproportionately a different group.” As long as prices for the likes of Ozempic remain sky-high, a push to get Medicaid to cover these drugs specifically to address obesity may be a hard sell in fiscally conservative Texas.
Instead, in a state where nearly five million residents are uninsured—the worst rate in the nation—the Texas Diabetes Council found that many simply can’t afford the rising costs of diabetes medications, so they forgo treatment. Some of these patients turn to Gunasekaran’s clinic for help, where until recently, they might have had access to GLP-1 medications in the diabetes-assistance program. But Gunasekaran has been unable to offer the drugs to new patients as demand for appetite-suppressing medications has soared and the supply of free GLP-1 drugs to her clinic has sputtered. Sometimes she doesn’t have enough for her existing patients. Novo Nordisk and Eli Lilly have stepped up production in response to nationwide shortages.
Lost in the discussion over whether to supply all diabetes patients with these medications is that the drugs do nothing to address the economic or social factors that contribute to new cases. Though intrinsic biological factors play a part in obesity, it is also true that an increasingly large number of Texans are born into situations that health experts say conspire against healthy living. It is more difficult, for example, for someone predisposed to obesity to maintain a healthy weight while living in a food desert or an impoverished environment.
All the while, our health-care systems operate as though more medication is the answer, as long as you can afford to pay for it. “We’re hoping there’s gonna be some miracle drug that’s going to erase everything bad,” Gunasekaran said, “but your patients still live in that same environment with all of those bad things.”
