Can GLP-1s for Weight Loss Be Covered by Medicaid?
Navigating Medicaid coverage for branded, off-label and compounded GLP-1s
GLP-1 receptor agonists, often known by their brand names like Zepbound™ and Ozempic®, have gained considerable attention due to their weight loss capabilities.
However, paying for these branded GLP-1 medications is one of the biggest access hurdles patients face. Paying out of pocket is simply out of the question for many, and even some private health insurance plans are reluctant to cover them. But what does coverage look like for public insurers like Medicaid?
We’ll dive into what you need to know about GLP-1s, the importance of FDA approval when it comes to coverage and where off-label and compounded medications fall into the equation.
What is Medicaid?
Medicaid is a joint federal and state healthcare coverage program that is geared towards eligible individuals and families who have lower household incomes. Medicaid helps ensure that more vulnerable populations, like children, pregnant women, people with disabilities and elderly patients, can have access to the health care they need.
FDA approval and Medicaid coverage
Typically, drugs must be FDA-approved in order to qualify for federal payments under Medicaid. Before we get into GLP-1 coverage, we first need to understand what it means for a drug to receive FDA-approval.
To start, let’s list out the FDA’s primary roles and responsibilities:
1. Guaranteeing pharmaceutical safety and efficacy
2. Regulating dietary supplements
3. Monitoring medical devices
4. Monitoring vaccinations and biologic products
5. Ensuring the safety of cosmetic products
6. Food labeling and overall safety
7. Regulating tobacco products
8. Monitoring veterinary drugs and animal food
9. Promoting public health
Before a new prescription enters the market for public use, the FDA must regulate and approve it. These drugs go through a rigorous phased testing process that ensures the safety and efficacy of the drug. This often takes years to complete.
Federal law requires that all new drugs in the United States be shown to be safe and effective for their intended use before they are marketed. This process ensures that the medication does what it claims and that its health benefits outweigh the potential risks for the intended population.
Which GLP-1 drugs have FDA approval?
Now that we’ve clarified what having FDA-approval means, let's reveal which GLP-1 medications are FDA-approved.
FDA-approved for type 2 diabetes
Byetta - 2005
Victoza - 2010
Trulicity - 2014
Adlyxin - 2016
Xultophy - 2016
Soliqua - 2016
Bydureon BCise - 2017
Ozempic - 2017
Rybelsus - 2019
Mounjaro - 2022
FDA-approved for obesity/overweight
Saxenda - 2014
Wegovy - 2021
Zepbound - 2023
Medicaid coverage for GLP-1s
According to the Medicaid Drug Rebate Program, drugs typically need FDA-approval to qualify for Federal payments under Medicaid (as we discussed above). So one would assume that FDA-approved GLP-1s would be covered, right? Unfortunately, as with most federal programs, it's not that black and white. Medicaid is state specific and coverage can vary based on the state's policies and preferred drug list.
Preferred drug list
According to Cornell Law, weight loss agents are part of a list of drugs that are subject to restriction. As a result, States can decide whether or not they want to provide Medicaid coverage of weight-loss drugs, and if they do, which ones.
Therefore, if Wegovy, for example, is not on your state’s preferred drug list for weight loss, then the medication might not be covered. Even though it's been FDA-approved for weight loss.
On the flip side, if Ozempic is on your state’s preferred drug list and has no clinical requirements, they may cover it even for off-label use. However, this isn’t common. Most of the time, Medicaid will want patients to meet clinical criteria that align with the drug's intended use. For Ozempic, that means they’ll likely want to see:
A type 2 diabetes diagnosis code within a patient’s chart
A1c lab values
Evidence of step therapy, such as using a more cost-effective medication first, like metformin
Prior authorization
The other factor that determines GLP-1 and Medicaid coverage is prior authorization. Some health plans require that medical providers get approval before they fill a prescription if a patient wants their insurance company to cover it.
If the state covers weight loss medications under Medicaid, they’ll likely require prior authorization. Some even require individuals to participate in an exercise program. However, they may also issue a quantity limit on the medication. The latter means the patient's insurance plan will only cover a specific amount of the medication over a certain period.
Does Medicaid cover off-label or compounded GLP-1s?
Currently, there are thirteen FDA-approved GLP-1s, most of which are intended for type 2 diabetes. Only three GLP-1 medications are specifically approved for weight loss.
Nonetheless, all GLP-1s generally behave similarly, regardless of their approved use. They mimic an incretin hormone (GLP-1) that helps reduce blood sugar and decrease appetite, resulting in weight loss. This has led to widespread off-label use of GLP-1 medications, like Ozempic, to treat obesity and overweight.
Although medications like Ozempic have been proven effective for weight loss, insurance companies, such as Medicaid, may not pay for the unapproved use of the drug. In most cases, they’ll only pay for medications like Ozempic if they’re being used to treat type 2 diabetes. Medicaid is also notorious for requiring prior authorization.
Essentially, it’s highly unlikely Medicaid will offer coverage for off-label or compounded medications. However, compounded GLP-1s do offer a much lower out-of-pocket price point and have been shown to be an affordable alternative for patients.
Understanding GLP-1 and Medicaid coverage
In 2020, nearly 40% of Medicaid beneficiaries had obesity, increasing their risk for other illnesses like heart disease and cancers. In order to combat this high percentage of obesity in the US, weight loss medications have seen a tremendous increase in popularity among providers and their patients.
However, due to the speed at which the industry has grown, lawmakers and payers are having a hard time keeping up. This has resulted in the GLP-1 and weight loss industry becoming a whirlpool of policies and regulations.
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