(The Center Square) – Opting to stop coverage of weight-loss drugs through the state employee health care plan was defended on Tuesday by North Carolina state Treasurer Dale Folwell.
The drug could potentially cost the state $170 million a year for the 22,000 state employees who take it, he said.
“It’s important to put things in context,” the treasurer told reporters in a news conference. “A 4% bonus to 250,000 retirees would cost us $170 million. There are 22,000 (state employees) being prescribed these drugs. There are a quarter of a million people getting a 4% bonus. That just tells you how gigantic this is in context.”
Folwell said the state has tried to negotiate the price of the drugs with no success.
“Our state health plan staff as well as our Board of Trustees has been working diligently over the last five months to try to come up with some solutions to pay for these drugs,” Folwell said Tuesday at the Council of State meeting also on Tuesday. “Every suggestion we made either to Eli Lilly our pharmaceutical benefit manager, was rejected.”
There have been discussions recently of Medicaid, the joint state-federal health care program, paying for the weight loss drugs, Folwell said.
“If you think $170 million is a lot to the state health plan, wait until you see the actuarial note on what this could cost Medicaid in this state,” the treasurer said. “Now, Medicare is looking at covering this drug.”
There are shortages of the ingredients used in the weight-loss drugs, while at the same time, demand for the medications is increasing, Folwell said.
“You can expect for the price to go up,” he said. “It’s not a decision that board took lightly. But when you have one drug that is taken by 22,000 people having the potential of doubling the individual premium for everyone else in the state health plan, it’s something we had to mathematically take seriously.”
At a legislative hearing last month, health officials were asked about the cost of weight-loss drugs, which are covered by Medicaid only for patients who are diabetic.
Kody H. Kinsley, secretary of the North Carolina Department of Health and Human Services, told legislatorsn if the coverage was expanded to include non-diabetic patients, the cost to the state would go up to $10 million a year.
That is “much cheaper than a lot of the costs of cardio-vascular disease,” he said.
The drugs are “phenomenal,” Kingsley said.
“The promise of their therapeutic potential is huge,” he said. “In one study of 17,000 individuals of folks who had strokes or heart attacks, there was a 20% reduction of risk for continued negative outcomes. There is a real value proposition here.”
But he also said the drugs are “stupid expensive,” particularly when compared to the prices in other countries.
“My desire,” he said, “is for us to go after those and to figure out a way to both get increased coverage but it’s got to be cheaper.”
