Last week, the North Carolina State Health Plan trustees voted 4-3 to stop covering weight-loss drugs like Wegovy and Saxenda because of their costs.
The decision attracted global attention, including New York Times coverage.
During the trustees’ discussion of the topic, some members contended that CVS Caremark, the plan’s pharmacy benefits manager, may have had an under-the-table deal with Novo Nordisk, the Danish company that makes Wegovy and Saxenda. But CVS Caremark, part of the CVS Health, says that isn’t true. They say they’re trying to negotiate a better deal for insurers and their clients on so-called GLP-1s from drug companies.
“Our negotiations with the drug manufacturers, including Novo Nordisk and Eli Lilly, have been underway for several months,” the company said in a statement. “Drug manufacturers need to stop dragging their feet and agree to offer their medicines at a fair price to North Carolina’s public servants.”
The State Plan Plan is dropping GLP-1s because the name-brand drugs now cost more than $1,300 a month and are mushrooming in popularity. The plan, which insures more than 700,000 state employees, dependents and retirees, expects an operating loss of $195 million this year, partly because of soaring drug costs.
Thursday’s vote by the board will save the plan about $100 million, officials estimate. The move comes less than a month after a moratorium on the coverage of new prescriptions of the drugs went into effect. The moratorium grandfathered existing prescriptions, but that grandfathering ends on April 1.
The plan’s new rule also blocks Eli Lilly’s Zepbound weight-loss drug, which health plan officials said costs about 20% less. That’s not enough to make much a difference, they said.
The cut-off will affect 24,749 plan members whose prescriptions are currently covered. That’s about 3% of the plan’s total membership.
CVS Caremark has negotiated rebates with the manufacturers that saved the plan about $68 million last year, but those rebates helped put it in the broad’s crosshairs during Thursday’s meeting.
State Treasurer Dale Folwell, who oversees the health plan, wanted to consider ways to put limits or preconditinos on the use of the drugs. For example, a member would have to have a certain body mass index to have his or her use of the drug covered by the plan.
But CVS Caremark shot down those ideas, warning that the plan would lose its rebates for the drugs if it went forward with any of them. That prompted trustee Dr. Kerry Willis to question if Caremark and Novo Nordisk were seeking “to maintain utilization at a high level and cost at a high level.” Another trustee, Melanie Bush, mused about “fir[ing] them for cause.”
CVS Caremark, however, stresses that its hands are tied unless a manufacturer serves up a better deal.
“We pass through 100% of any rebates the manufacturer offers to the North Carolina State Health Plan,” the company said. “Our clients receive manufacturer rebates when coverage for a drug meets certain terms and conditions, including inclusion on the formulary. If the terms and conditions are not met, CVS Caremark is not able to collect a rebate for its client.”
The company’s contract with the State Health Plan started in 2023 and expires at the end of 2015. Renewal options could extend the pact another two years.
The State Health Plan pays Caremark a monthly administrative fee, which was $891,283 for October’s membership and claims.
Officials say their contract with Caremark includes transparency rules that require disclosure of “all financial guarantees,” including rebates. That should cover the “details of all programs and services generating financial remuneration from outside entities.”
Meanwhile, an advocacy group for workers, the State Employees Association of North Carolina, joined Folwell in criticizing Novo Nordisk for charging a lot more for its drugs in the U.S. than in Europe. There are many differences in the insurance markets here and Europe, along with supply problems
Novo Nordisk, meanwhile, reported that its nine-month profit for the first three quarters of 2023 increased 47% compared with the same period a year earlier. Sales of its anti-obesity drugs had grown 174%. The company’s total sales increased about 30% during the nine months.
The Danish companyoperates large plants in Durham and in Clayton in Johnston County.
