How to Plan for the Obesity Drug Revolution

What You Need to Know

Life insurers are starting to think about what Wegovy, Saxenda and successors could do for your clients.
Fewer obesity-related health complications could mean many clients will have different long-term financial planning needs.
The drugs still come with high costs, unpleasant side effects, and the possibility that they will work better for some people than others in the long term.

Many of your clients who are now struggling with their weight could soon be thin, thanks to the new “glucagon-like peptide-1 agonist” drugs and other weight-loss drugs that show up in the future.

The new drugs, Wegovy and Saxenda, have stunned weight-loss experts who once argued that willpower was the only sensible defense against obesity by helping people lose as much as 21% of their weight without much extra effort. Novo Nordisk says weekly use of the drug cuts the risk of heart attack and stroke by about 20%.

Insurers and their reinsurers have seen enthusiasm about weight-loss wonder drugs come and go for decades, but now medical experts at Gen Re, Reinsurance Group of America, Munich Re, Scor and Swiss Re are starting let their guard down and wonder what might happen if the GLP-1 agonists really work, and keep working.

Gina Guzman, chief medical director at Munich Re Life North America, wrote the article, “Have We Found the Cure to End Obesity?” for Munich Re Life US in June 2023, and “ Could obesity drugs reduce heart disease?” for the company earlier this month.

“ It’s a very exciting time,” Guzman said last week in an interview.

She pointed out that about 50% of Americans are obese and 70% weigh more than they should.

“Something has to be done to bend the curve,” Guzman said.

What it means: For your clients with weight problems, death and taxes may still be inevitable, but obesity might not be.

The backdrop: Doctors use the body mass index as a rough indicator of how a patient’s weight compares with the optimal weight. BMI is equal to the patient’s weight in kilograms divided by the square of the patient’s height.

The standard U.S. BMI cutoffs are 25 kilograms per square meter for overweight (Guzman uses 27), 30 for obesity and 40 for severe obesity.

In 2019, about 7.6% of U.S. adults suffered from severe obesity, according to the U.S. Government Accountability Office.

GAO investigators found nine anti-obesity drugs on the U.S. market in 2019, including phentermine, a drug that has been approved by the federal Food and Drug Administration since 1959.

Another drug, a combination of phentermine and topiramate, has been approved since 2012 and costs much less than Wegovy or Saxenda but is classified by the FDA as potentially habit-forming.

Both doctors and patients are more excited about the GLP-1 agonists because, at this point, they seem to be safer and more effective than the older weight-loss drugs.

The FDA approved liraglutide, the drug that Novo Nordisk sells as Saxenda, in 2014. It approved semaglutide, the drug the company sells as Wegovy, as a weight-loss drug in 2021.

Companies have also been selling versions of the GLP-1 agonists as type 2 diabetes control drugs for about 20 years.

One obstacle is that Wegovy and Saxenda are both injectable drugs, but Novo Nordisk is already selling an oral form of semaglutide, Rybelsus, for people with type 2 diabetes.

Doctors wrote prescriptions for Wegovy, Saxenda and similar drugs for about 9 million Americans in the last quarter of 2022, according to Trilliant Health, a health data analysis firm.

Concerns: Guzman noted in her articles for Munich Re that Wegovy and Saxenda can cause side effects, including nausea, vomiting, diarrhea, pancreatitis, and kidney and liver damage.

“A study last year reported that 50.3% of adults with type 2 diabetes who were prescribed GLP-1 receptor agonists discontinued the medication within one year,” Guzman wrote

The GLP-1 agonist discontinuation rate was higher than that for any other class of diabetes medication, Guzman added.

Health care policymakers are worried about the kind of hype that once boosted opioid sales.

Sen. Chuck Grassley, R-Iowa, complained in March 2023 that Dr. Fatima Cody Stanford, a nominee for the federal 2025-2030 Dietary Guidelines Advisory Committee, had received tens of thousands of dollars from the makers of weight-loss and obesity drugs, including the makers of semaglutide and Ozempic.

Still another concern is cost.

The full list price of Wegovy is about $16,000 per year, according to GoodRx Health.

In August 2023, Francesca Lim of Columbia University and other researchers reported in JAMA Network Open that semaglutide works better than a phentermine-topiramate combination drug to reduce obese adolescents’ weight.

But the phentermine-topiramate combination is so much cheaper that it probably adds a healthy year to an obese adolescent’s life for just $60,000, compared with a cost of $1.1 million for an extra year of healthy life for Wegovy.

GLP-1 agonist insurance coverage: In 2019, the GAO estimated that about 660,000 Americans had used prescription weight-loss drugs from 2012 through 2016.

Private insurance paid for the drugs for 25% of those patients. Medicaid paid for the drugs for 4% of the patients and Medicare paid for the drugs for 2%.

Today, many public and private plans are starting to pay for GLP-1 agonists for at least some patients, in spite of the high cost.