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More competition could drive prices of obesity drugs down

Media Contact

Becka Bowyer

The FDA has approved tirzepatide – which will be sold under the brand name Zepbound – to treat overweight and obesity. It’s the latest entrant into a field of powerful new drugs that includes Ozempic and Wegovy.

John Cawley

Professor, Cornell Brooks School of Public Policy

John Cawley, professor of public policy and economics at Cornell University, researches the economics of diet, physical activity and obesity. Cawley says competition may put downward pressure on prices.

Cawley says:

“There have been concerns about the high cost of GLP-1s. The approval of Zepbound, by Eli Lilly, represents a competitor to Novo Nordisk’s Wegovy, and this competition may put downward pressure on the prices that either pharmaceutical company can charge.

“Although the list price of Zepbound will be about $1,060/month, it’s important to keep in mind that’s the sticker price that few people pay. A recent study found that on average there was a discount of 48% on Wegovy, for example.

“Historically, use of weight loss drugs is low, likely in part due to very low coverage of these drugs by health insurance. In general, patented weight loss drugs are not covered by standard Medicare Part D, nor by most Medicaid programs. Coverage by private health insurers varies, but coverage is most often for older generics associated with much less weight loss.

“I have studied the medical care costs of obesity. Importantly, even the roughly 20% weight loss associated with Zepbound is expected to result in meaningful reductions in other medical care costs for those with extreme obesity. For those who are overweight, or even class 1 obese, such weight loss is not expected to lead to large savings in medical care costs (even before taking into account the cost of the drug).”

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