Weight-loss drug coverage ends for state employees. NC treasurer says negotiations ongoing with drugmakers

State officials are continuing to negotiate with makers of weight-loss drugs in an effort to reach a better financial deal that would allow coverage of the drugs through the State Health Plan, State Treasurer Dale Folwell said Tuesday.

The State Health Plan stopped covering weight loss drugs such as Wegovy and Zepbound on Monday. The plan’s board of trustees voted 4-3 in January to end coverage of the drugs for the more than 700,000 state employees and their family members who get their health care through the State Health Plan.

During a meeting of the Council of State, Folwell said that he and other State Health Plan leaders have been trying since late last year to reach a deal with the companies who make the drugs. The talks have gone nowhere, he said. “Every suggestion that we’ve made to Eli Lilly or Novo Nordisk, or our pharmacy benefit manager, every single one of those was rejected,” Folwell said.

Wegovy manufacturer Novo Nordisk responded that North Carolina is irresponsibly denying health care to its own state employees.

“We are surprised and disappointed North Carolina rejected multiple, workable options presented to them since the last Board meeting in January,” the company said in a statement to WRAL. “Instead, State Health Plan officials are abandoning their obligation to employees living with the chronic disease of obesity and denying them coverage for safe and effective treatments. Denying patients insurance coverage for important and effective FDA approved treatments is simply irresponsible.”

Spokespeople for Eli Lilly, which makes Zepbound, didn’t immediately respond to a request for comment.

Folwell said that even though just 22,000 members of the State Health Plan are on the drugs, a fraction of the total membership, they’re so expensive that continued coverage — and a predicted rise in demand — would’ve forced the State Health Plan to double its monthly premiums on many members.

Demand for weight-loss drugs has surged in recent years due in part to an advertising blitz by manufacturers and celebrity testimonials. Many of the drugs, which fall under the umbrella of glucagon-like peptide-1, or GLP-1 medications, are used to treat diabetes, but some have been prescribed to help patients manage weight.

“When you have one drug that was being prescribed to 22,000 people — having the potential of doubling individual premiums for everyone else on the plan from $25 to $50 — it’s something that we have to, mathematically, take seriously,” Folwell said.

Novo Nordisk, the Danish pharmaceutical company that makes Wegovy and Ozempic, has faced criticism from state officials in the past for charging significantly less for its drugs in Europe than it does in the United States.

"What are we really paying for?" State Health Plan trustee Pete Robie said in January when he voted to cut coverage of the drugs for state workers. "Stock options? Dividends?"

But another trustee, Melanie Bush, said the health plan shouldn’t punish state workers just to make a statement about corporate greed, WRAL reported at the time.

Wegovy has been costing the state more than $1,300 a month for every person on the drug, even though that same batch would cost no more than $22 to produce, Folwell said in a followup call with reporters Tuesday.

But at the same time as officials for the State Health Plan are cutting coverage of the drugs — at least, pending any breakthroughs in negotiations with the pharmaceutical companies — other state officials are looking into the possibility of expanding coverage.

For the millions of North Carolinians on Medicaid, GLP-1 drugs are covered for treatment of diabetes but not for treatment of weight loss, N.C. Department of Health and Human Services Secretary Kody Kinsley told state lawmakers last month. But he said the drugs are “are phenomenal, and their promise is huge,” so he’d like to expand coverage if possible.

Kinsley had similar complaints as Folwell, however, adding that the drugs are “stupid expensive” which makes it harder to justify the up-front cost of expanding coverage, even if they could pay off over the long term.

“It's frankly so frustrating to me that they are so incredibly expensive, relative to what we see in other countries,” Kinsley told a legislative oversight committee last month. “And I believe that they're being held back from the people of North Carolina — when they could be promoting a great deal of value here in the buckle of the ‘Barbecue Belt.’”

However, there seem to be differing estimates of just how expensive the weight loss drugs would actually be to cover.

Folwell said Tuesday that continued coverage of the popular weight-loss drugs for the 700,000 people on the State Health Plan could raise costs by $170 million per year.

But Kinsley told lawmakers in March that adding coverage for the 2.8 million North Carolinians on Medicaid would cost the state government no more than $10 million; the federal government provides the majority of Medicaid funding.