I saw this Ozempic ‘Very Likely’ to Face Drug Price Negotiations, Novo Says:
“It is very likely that Ozempic will be part of negotiations in the coming round, and we’re ready for that,” Ulrich Otte, senior vice president of finance & operations for Novo Nordisk, said Tuesday at Cantor Global Healthcare Conference in New York.
The ability to negotiate drug prices is part of a sweeping set of policies set forth in President Joe Biden’s Inflation Reduction Act. The law allows the US government to haggle over drug prices, as many other nations around the world already do.
To preface, I believe that individuals ought to be allowed to use these these drugs for personal use, without being shamed or feeling guilty for ‘taking the easy way out’ in regard to weight loss. Given the low success rate of dieting, these drugs are less of a crutch, but more about tipping the already abysmally low odds of long-term weight loss in one’s favor. Studies and overwhelming praise on social media has consistently found these drugs to be highly effective at weight loss, where dieting and exercise has otherwise failed. So for these reasons, I support the use of these drugs, but at the same time, I am opposed to universal coverage for these drugs.
Most arguments in support of expanding coverage overstate the health dangers of obesity and use bad statistics and faulty reasoning to make their case.
If coverage was expanded to the 200 million Americans who are highly overweight (BMI above >28) or obese (BMI above >30) , it would be extremely expensive. For a single year, at $1000/month times 12 months times 200,000,000 million overweight or obese adults or children, would cost $2.4 trillion/year. By comparison, in 2023 Medicare and Medicaid accounted for 26% of federal program spending, with estimated budgets of $1 trillion for Medicare and $849 billion for Medicaid. So this alone would cost 1.3x the entirety of the combined annual budget of Medicare and Medicaid. Although this double-counts obese diabetics who are eligible for Ozempic or related drugs under Medicare part D (but not as a weight loss drug) or whose private insurance already covers it, still, making it a public good would be very expensive.
The NYTs came to a similar calculation:
We have estimated the costs and savings for state public insurance programs, health insurance exchange subsidies and U.S. taxpayers from making this class of drugs more broadly available. Under reasonable assumptions and at current prices, making this class of drugs available to all obese Americans could eventually cost over $1 trillion per year. That exceeds the savings to the government from reduced diabetes incidence and other health care costs from excess weight by $800 billion annually.
This is a staggering sum. It is almost as much as the government spends on the entire Medicare program and almost one-fifth of the entire amount America spends on health care.
Note: this is just for obese people; expanding coverage for those who are borderline obese (BMIs 28-30) would increase those figures by another half a trillion. And expanding coverage to all overweight Americans (BMI >25) would double it to two trillion.
Does the benefits of Ozempic and related drugs justify the cost from a public health standpoint? I argue it does not. [0] Proponents of expanding coverage often overstate the dangers obesity. To my surprise, and to the surprise of others when I show these stats, obesity does not lower life expectancy much despite the dire language that the problem is typically described in. A meta study found that obese men with BMIs below 40 only lose 2-3 years of life expectancy, and just a single year for women. I assumed it would be more, but only in the setting of morbid/severe obesity (a BMI above 40) does life expectancy begin to decline more significantly, about 10 years, which is much more uncommon compared to moderate or mild obesity. [1]
As shown above, the purple curve indicating mild obesity (a BMI between 30-35), does not lower life expectancy much compared to normal or overweight indicated in green (a BMI between 22-30).
Moreover, this is based on decades-old data that tracked obese people who died a long time ago; middle-aged obese people today have access to modern medical treatments and drugs (e.g. statins), further attenuating any loss of life expectancy. [2]
The second argument is that these drugs justify their cost by reducing spending for obesity-related complications, which although true, does not imply reduced medical spending overall. A typical argument goes along the lines of “obesity costs $X year” implying that these drugs would somehow negate this cost. Except it wouldn’t, because as shown above, obesity does not lower life expectancy much, so this means many of those people on these drugs would still get the same age-related conditions as non-obese people, but likely at a slightly later age than if they were obese. Plenty of non-obese people also get heart disease, dementia, atherosclerosis, cancer, stroke, diabetes, or suffer from falls. Although universal coverage would reduce the incidence of the above conditions, it would not nearly be enough to offset the huge cost, as the above NYTs article showed.
An example I like to use is, if an obese person gets a stroke at 67 instead of 70 for the non-obese person, and it costs the same amount of money to treat, how much of this cost is really due to the obesity versus age? So medical spending rather than being reduced is instead delayed, but with the added cost of these drugs, so taxpayers are effectively paying twice. This is similar to the UBI: proponents of basic income overlook that a UBI either must be in lieu of existing programs, or else it will simply add to existing expenses for existing programs. UBI proponents make the unrealistic assumption that recipients will spend their UBI judiciously instead of needing to draw from public services. [There are however stronger arguments for UBI, such as that existing welfare programs tend to disincentivize work.]
Additionally, media hype notwithstanding, these drugs are not an obesity cure. These drugs must be taken ‘for life’, similar to antidepressants or insulin injections. Worse, many patients will still be overweight or obese. For example, a 6ft 300lbs male who loses 15% of his initial weight, which is typical, will still be obese and thus not reap the claimed full cost-saving benefits. There is large individual variability as to how well people respond or tolerate the side effects (and treating side effects will impose additional costs, negating some of the claimed savings). Women tend lose a greater percentage of weight compared to men, and it’s not well understood why this is. Nor is it understood why some people respond much better than others, but being able to predict this before starting treatment can help save money by finding other treatments for those who are unlikely to respond well. Much more research is needed in this area.
There is also the ‘quality of life’ aspect, but similar to above, I suspect this isn’t reduced much except for morbid/severe obesity. Or having to climb stairs. Steve Wozniak is obese yet even at 74 his quality of life does not seem so bad. How much is quality of life worth? A trillion dollars annually? The problem is any spending can be justified if it’s to improve quality of life, even unrelated to obesity. And unlike measuring pounds on a scale, quality of life is much more subjective. I can attest that while heavier my quality of life did not seem worse compared to now unless it involved inclines. I think there is an element of the hedonic treadmill in that people tend to exhibit some fixed state of happiness.
Overall, the utilitarian argument for expanding coverage is weak. The question becomes, does an extra 1.5 years (averaging men and women) of life justify spending $1+ trillion/year for a lifetime (or at least until the drugs go generic)? Likely not. We’re not talking about treating kids who stand to lose decades of life due to cystic fibrosis or leukemia. Yes, increasing life expectancy is good, and obesity is bad, but one also has to consider the other side of the equation: at what cost and who is paying for it. Why stop at Ozempic? Why not pay $1000/month for a lifetime so everyone can have a personal trainer and chef? Surely that will improve life expectancy by a year or so. If someone like Bryan Johnson wants to spend his own fortune to live longer, that ought to be his right, but life extension, however little, at any cost for every American is a fiscal disaster in the making.
[0] This assumes paying sticker price and without negotiating prices. When these drugs go generic, this figure will likely be reduced to only $200 billion (generic drugs typically cost 15% of the sticker price compared to name-brand drugs) , which although is a lot, is at least manageable and possibly justified by cost-benefit analysis.
[1] 
[2] For morbid obesity as a stop-gap measure, perhaps expanding coverage is justified, as the loss of life expectancy is far greater for these individuals. This would apply to only 5% of Americans instead of half or third, which is a far more manageable of a cost.