The FDA Has Approved Zepbound, a New Weight Loss Drug - Here's What Employers Need to Know

On November 8, 2023, the FDA approved Zepbound, a new weight-loss medication that could impact the roughly 40% of American adults who live with obesity.

Tirzepatide, currently on the market under the trade name, Mounjaro, for type 2 diabetes will now be available for weight loss at a higher concentration under the trade name, Zepbound. Tirzepatide is part of a class of medications known as GLP-1 agonists that have skyrocketed in popularity in recent years. Tirzepatide works by mimicking two naturally-occurring hormones: one that helps reduce food cravings and another that is thought to improve how the body breaks down sugar and fat. Together, these amplify weight loss effects for patients.

This newest FDA approval comes as no surprise and is the latest product to join its competition following the same logic. Semaglutide, is currently on the market under the brand name, Ozempic, for diabetes and is available in a higher strength under the brand name, Wegovy, for weight loss. Like Wegovy, Zepbound is a once-weekly self-administered injection. Zepbound is designed to work in conjunction with positive lifestyle changes such as reduced caloric intake and increased exercise. Side effects from these medications are mainly gastrointestinal in nature and include issues such as nausea, vomiting, constipation, and diarrhea. In clinical trials, the highest dose of Zepbound led to an average weight loss of over 22% of body weight, which is significantly higher than the 15% average weight loss seen with Wegovy.

Zepbound is expected to be commercially available in the U.S. after the Thanksgiving holiday in six different doses. It’s projected list price is approximately $1,060, which is roughly 20% lower than Wegovy. Lilly, the drug’s manufacturer, has said that it will offer a savings card for patients with commercial insurance that will enable them to purchase a one or three-month supply of the drug for $25 so long as the patients’ insurance plan covers the medication. If the patients’ insurance does not cover Zepbound, the savings card would allow them to pay $550 for a one-month prescription.

So, what does this development mean for health plan sponsors? First off, plans that don’t currently cover weight loss products will not be impacted by this approval. However, groups that already cover these types of weight loss products may experience a rise in their plan spend in the near future. It is expected that Zepbound will hit pharmacy benefit manager (PBM) formularies in approximately six months, pending an evaluation by Pharmacy and Therapeutics (P&T) Committee.

As norms shift and these types of medication become more commonplace, it is possible that pressure on plan sponsors to cover weight loss products will increase. However, the high costs involved will likely limit access for large swathes of American patients for some time to come. Medicare patients, for example, are not able to receive coverage for prescription weight loss medications. Some plan sponsors are also beginning to experiment with requiring plan members to take part in clinical lifestyle management programs before coverage for these types of weight loss medications is approved.

Are rising pharmacy costs affecting your company's bottom line? Check out the Cost Containment Playbook for actionable ways to get your helth plan spending under control.