• More than 3 million people with Medicare could be eligible for coverage of Wegovy now that the popular weight loss drug is also approved in the U.S. for heart health, according to an analysis by health policy research organization KFF. 
• But some beneficiaries could still face out-of-pocket costs for the highly popular and expensive drug, and certain Medicare prescription drug plans may also wait until 2025 to cover Wegovy.
• Medicare's budget could also be strained as more Part D plans cover the costs of Wegovy.

More than 3 million people with Medicare could be eligible for coverage of Wegovy now that the blockbuster weight loss drug is also approved in the U.S. for heart health, according to an analysis released Wednesday by health policy research organization KFF.

But some eligible beneficiaries could still face out-of-pocket costs for the highly popular and expensive drug, KFF said. Certain Medicare prescription drug plans may also wait until 2025 to cover Wegovy.

Medicare's budget could be strained as more plans cover the costs of Wegovy. The program's prescription drug plans could spend an additional net $2.8 billion if just 10% of the eligible population, an estimated 360,000 people, use the drug for a full year, according to KFF.

Under new guidance issued in March, Medicare Part D plans can cover Wegovy for patients as long as they are obese or overweight, have a history of heart disease and are specifically prescribed the weekly injection to reduce their risk of heart attacks and strokes. The Food and Drug Administration approved Wegovy for that purpose in March.

KFF said that applies to 3.6 million, or 7%, of total beneficiaries, based on 2020 data. That group also makes up 1 in 4 of the 13.7 million Medicare patients who are obese or overweight. Those numbers may be higher based on more recent data, the nonprofit group said.

The analysis suggests that, for the first time, certain Medicare beneficiaries will be able to access Novo Nordisk's Wegovy without having to shoulder the total $1,300 monthly price tag alone.

Notably, Medicare prescription drug plans administered by private insurers, known as Part D, currently cannot cover Wegovy and other GLP-1 drugs for weight loss alone. GLP-1s are a buzzy class of obesity and diabetes treatments that work by mimicking a hormone produced in the gut to suppress a person's appetite and regulate their blood sugar. 

But KFF's analysis found that Medicare beneficiaries who take Wegovy could still face monthly out-of-pocket costs of $325 to $430 if they have to pay a percentage of the drug's list price for a month's supply.

A new Part D cap on out-of-pocket spending would limit beneficiaries' out-of-pocket costs to around $3,300 in 2024 and $2,000 in 2025. Still, those sums are a significant burden for those who live on modest incomes.

Some patients also may struggle to access Wegovy if Part D plans that decide to cover it implement certain requirements to control costs and ensure the drug is being used appropriately. That could include "step therapy," which requires plan members to try other lower-cost medications or means of losing weight before using a GLP-1 such as Wegovy.

"These factors could have a dampening effect on use by Medicare beneficiaries, even among the target population," KFF wrote in its analysis.

Some Part D plans have already announced that they will begin covering Wegovy this year, but it's unclear how widespread coverage will be. KFF said many plans may be reluctant to expand coverage now since they can't adjust their premiums mid-year to account for higher costs associated with use of the drug.

That means broader coverage in 2025 could be more likely, KFF added.

Medicare already covers GLP-1s and other treatments for diabetes, such as Novo Nordisk's blockbuster Ozempic. 

Among the Medicare beneficiaries who are obese or overweight and have a history of heart disease, 1.9 million also have diabetes, according to KFF. That makes them already eligible for Medicare coverage of other GLP-1 drugs approved for that condition.