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Monthly Healthcare Insights: GLP-1 prices, vaccines

By Jeff Levin-Scherz, MD, MBA | September 19, 2024

Our population health leader weighs in on GLP-1 prices, vaccines, cancer screening and more.
Health and Benefits|Benessere integrato
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New Zepbound direct prices represent a net increase

Eli Lilly recently announced a new direct-to-consumer pricing schedule for Zepbound, which is tirzepatide labeled for the treatment of obesity. Previously, Eli Lilly had been selling Zepbound in pens for administration to those without insurance for $549 a month. Lilly announced that the two starting doses of the drug, 2.5 mg and 5 mg, would now be available in vials for $399 a month (2.5 mg) and $549 a month (5 mg). These require patients to use an insulin syringe to give themselves an injection weekly. Simultaneously, Lilly increased the prices of Zepbound 7.5 mg and higher to $649 a month, although this wasn’t stated in the press release. The price changes apply to consumers who purchase Zepbound through Lilly Direct and don’t affect prices adjudicated through insurance.

Zepbound is generally started at 2.5 mg a week, and the dose is increased monthly until side effects aren’t tolerated or the desired cadence of weight loss is achieved. Therefore, most people will be on the 2.5mg dose for the first month, the 5-mg dose for the second month and will be on a dose of 7.5 mg or more each week starting in the third month.

Many press outlets heralded this as a challenge to telemedicine firms using compounded GLP-1 medications, although this actually represents an increase in cost. Here are some examples: (1) (2) (3) (4). Some quoted the Obesity Action Coalition, an advocacy group that obtains much of its funding from pharmaceutical companies.

Implications for employers
  • Direct purchase from a pharmaceutical company of GLP-1 medications effective in obesity treatment at this point remains cost-prohibitive for most plan members with obesity who don’t have coverage in their employer-sponsored plans.
  • Beware of press releases that use only the list price for context, since very few pay the list price. The “direct” prices are similar to prices paid by employer-sponsored plans after discounts and rebates.
  • This drug, sold directly to patients without insurance coverage, is now less affordable than it was previously after the first few months of treatment.

Vaccine updates

New COVID-19 vaccines now available

The Food and Drug Administration (FDA) recently approved the updated Moderna and Pfizer 2024 COVID-19 vaccines. These vaccines were designed to be effective against the KP.2 variant, a close relation to the KP.3.1.1 variant, which is now predominant. The FDA is expected to also approve the Novavax COVID-19 vaccine soon. That vaccine is targeted at an earlier variant, JN.1, although some believe it will cause fewer adverse reactions.

People who got COVID this summer can wait three months from when they got it to get vaccinated. This could mean they will be more protected during the likely winter wave. However, current COVID-19 infection rates are still high across the country. So, vaccination in September is a good way to protect people who didn’t get a recent infection. I’m scheduled to get my COVID vaccination in early September.

Here’s a great guide to fall vaccines from Katlyn Jetelina, PhD, who writes Your Local Epidemiologist.

Implications for employers
  • COVID-19 vaccinations have been shown to decrease risk of illness, hospitalization, cardiac problems, Long COVID and some short-term mental health issues.
  • Employers can include COVID-19 vaccinations in their flu clinics this fall. Most employer-sponsored clinics will only offer one of the available vaccinations.
  • Employers can also educate their employees about adult vaccinations. Here’s a link to the Centers for Disease Control and Prevention (CDC) resource on promoting vaccination in the workplace.
  • Employers are required to offer COVID-19 vaccinations to members without cost sharing after the CDC’s Advisory Committee on Immunization Practice (ACIP) recommends them, which is expected soon. Most employers will offer these without cost sharing even before the ACIP determination.

Childhood vaccines save lives and dramatically lower medical costs

Researchers at the CDC published an economic analysis of pediatric vaccines showing that on average each dollar spent on vaccination saved over $3 in medical costs, and over $11 in total societal costs. Pediatric vaccinations prevented 508 million illnesses (four per child), 32 million hospitalizations and 1.1 million deaths over the cohort of children born over the two decades from 1994 to 2023.

The researchers evaluated vaccination costs (both direct, including the cost of vaccinations, and indirect, including time for parents to go to get their children vaccinated) and illnesses prevented based on projections if vaccinations hadn’t been available. They evaluated costs and benefits for vaccinations for childhood diseases including diphtheria, tetanus, pertussis, Hib, poliomyelitis, measles, mumps, rubella, varicella, hepatitis A, rotavirus, pneumococcus and hepatitis B.

Vaccinations shaved $540 billion from medical costs. Considering additional societal costs (including death and productivity), vaccinations were responsible for $2.7 trillion in savings compared to these vaccines not being available.

This research comes out even as nationwide polling shows fewer parents regard vaccination as extremely important. This polling shows the public health challenge of maintaining the high vaccination rates necessary for health and productivity.

Implications for employers
  • Childhood vaccinations prevent illness and death.
  • Childhood vaccinations also decrease total medical costs even after considering the total cost of vaccinations (including both medical costs and administrative and opportunity costs of taking the time to vaccinate children).
  • The social benefits of vaccination include benefits to employers such as increased parental productivity and decreased time away from work.
  • Employers can ask their carriers to report on childhood immunization rates and educate their employees about the importance of childhood vaccination.
  • Employers can use materials from this CDC site to promote vaccinations (materials are available in English and Spanish).

FDA approves new colorectal cancer screening test

The FDA approved a new blood test for colon cancer screening (Shield from Guardant) in late July. The test detects cell-free DNA from colorectal cancers (CRC) and has been approved for use in those ages 45 and older. This new test has been covered widely in the media (1) (2) (3), and I’ve heard from several companies wondering whether and how to cover this test.

The New England Journal published results of a validation study with over 7,800 participants with stage I – III colorectal cancer and found that the test has an 83% sensitivity (meaning that 83 out of 100 with colorectal cancer will be positive on the test) and a 90% specificity (meaning that 90 out of 100 who don’t have colorectal cancer will have a negative test). The test has only a 13% sensitivity in detecting colonic polyps that are precursors to cancer.

With an 83% sensitivity, we’d expect to find five out of six true cases of new CRC. With a 90% specificity, we’d expect to see 1,000 false positives out of 10,000 members. This means that negative tests are highly accurate (only one case of cancer among 9,000 negative test results). However, 99.5% of the positive tests (1,000 out of 1,005) will be false positives.

The cost of this test is $895. If all 10,000 members were evaluated with this test, the cost would be about $9 million, or $1.8 million per cancer found. This represents just the cost of this blood test, not the cost of colonoscopies or other CRC tests.

Implications for employers
  • This test is approved by the FDA, but there is not yet data to determine whether the test leads to decreased premature death or better quality of life. Colonoscopies and FIT test screening have each already been shown to decrease deaths from colorectal cancer.
  • This test has not yet been evaluated by the U.S. Preventive Services Task Force (USPSTF), and it’s not clear how it’d fit into current screening recommendations. FIT tests for colonoscopies could detect worrisome precancerous lesions earlier.
  • Employers should review the technology assessment findings of their carriers when these are available, and not rush to provide coverage for this newly approved test.

The U.S. enjoys low generic drug prices

We often talk about the high cost of pharmaceuticals in the U.S. Costs of brand-name drugs in the U.S. are over four times higher than in other high-resource countries. However, the U.S. often has lower-priced generic drugs than other high-resource countries.

Research published in JAMA Health Forum used drug pricing data from eight high-resource countries (Australia, Canada, France, Germany, Japan, Switzerland, U.K. and U.S.) to simulate whether ignoring the lower prices of drugs when they become available as biosimilars or generics leads to an underestimation of the value of pharmaceutical products in pharmacoeconomic research. They found that for drugs that have years left on their patents, future price drops had little impact on cost effectiveness. However, considering future generic prices helped increase the calculated cost effectiveness of medications for drugs that were close to the end of their patent exclusivity.

Generic medications are an extremely “good deal” in the U.S., based on the much higher prices paid here for brand-name medications. Eleven states have laws that encourage pharmacists to dispense generic medications, and generic use is higher in these states.

Implications for employers
  • Generic medications represent a good value, and employers should design plans to encourage generic prescribing when available.
  • Employers and consultants can be alert that in some cases, “spread pricing,” when the pharmacy benefits manager charges employer clients more than what it pays to the pharmacy for an inexpensive generic drug, can erase some of the generic drug price advantage.
  • Efforts to enforce patent law, such as the Federal Trade Commission initiative to invalidate inappropriate patents for delivery devices, can help plan sponsors benefit from an earlier introduction of generic medications.
Author

Managing Director and Population Health Leader

Jeff is an internal medicine physician and has led WTW’s clinical response to COVID-19 and other health-related topics. He has served in leadership roles in provider organizations and a health plan and is an Assistant Professor at Harvard Chan School of Public Health.

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