Weighing the Cost of Semaglutide

It is a widely held truth that obesity is more than just a health crisis, it is an economic burden. Due to the range of comorbidities that all too often accompany obesity, the healthcare costs associated with obesity are extensive, and with rates of obesity continuing to increase, particularly in the U.S, where nearly half of adults are projected to be obese by 2030, there is a critical need for efficacious interventions. 

There are many factors that contribute to higher rates of obesity - wealth inequality, genetics, culture, sleep, to name but a few, and these all need to be factored into addressing a wider strategic goal of reducing obesity. At the moment though, at least in the US, the pharmaceutical industry is focused squarely on weight loss medication, specifically GLP-1 receptor agonists. Originally discovered to treat diabetes, these molecules, semaglutide being the most well known, help reduce weight loss by suppressing appetite and slowing digestion, making patients feel fuller for longer and meaning that in conjunction with a diet and exercise regime, patients can successfully lower their calorie intake and lose weight. 

Semaglutide is the active ingredient in Novo Nordisk’s blockbuster Wegovy® anti-obesity medication, which alongside weight loss of ~17%, has also been shown to significantly reduce the risk of cardiovascular disease. Novo Nordisk has been questioned about the price of Wegovy® in the U.S, where a month-long supply of Wegovy® costs 5x more than the second most expensive list price in Japan ($939 vs $169). In September of last year, Novo’s CEO Lars Fruergaard Jørgensen was grilled by Bernie Sanders on the price differences. Well-documented access issues due to manufacturing difficulties causing supply-driven price increases were of course mentioned (although this has recently changed with the FDA taking Wegovy® off the shortage list) but, predictably, the injustices in the difference in prices were attributed to the injustices in the U.S. health system and the market dynamics that underpin the system.

So with the medical zeitgeist dominated by GLP-1 receptor agonists and their undeniably impressive efficacy in treating weight loss and diabetes, let’s look at the new study published in the Journal of Medical Economics, which investigated whether semaglutide (2.4 mg) represents a cost-effective solution for non-diabetic people with obesity and cardiovascular disease. This US-based research builds on the landmark SELECT trial, which showed that semaglutide reduced the risk of major cardiovascular events like heart attacks and strokes by 20%.

The study used a Markov-state cost-effectiveness model using trial-derived data to simulate 100,000 individuals with obesity and established cardiovascular disease. It compared two groups: those who received semaglutide alongside standard of care (SoC) - an approved exercise and diet regime - and those who received SoC alone. The researchers then assessed lifetime treatment costs, savings from avoided medical complications, and overall improvements in quality of life.

It was found that over a modelled lifetime horizon, semaglutide prevented an estimated 2,791 non-fatal heart attacks, 3,000 coronary revascularizations, and 487 strokes per 100,000 treated individuals. The treatment also lowered the likelihood of developing type 2 diabetes by 6.53 percentage points over 20 years. Although the drug itself costs an average of $47,353 per patient over their lifetime, it offsets expenses related to diabetes, kidney disease, and cardiovascular events, leading to an incremental cost of $29,767 per patient. Patients on semaglutide gained an average of 0.218 additional quality-adjusted life years (QALYs), a key metric in health economics.

Cost-effectiveness in healthcare is often measured by the incremental cost-effectiveness ratio (ICER), which is the cost per QALY gained. At its list price, semaglutide’s ICER came in at $136,271 per QALY, which falls within the ‘intermediate value’ range set by the American College of Cardiology and American Heart Association. However, when applying the estimated average manufacturer discount (48%), which aligns with real-world pricing strategies, the ICER dropped to just $32,219 per QALY, making it a ‘high-value intervention.’

While the numbers are promising, the study does acknowledge certain limitations. The trial population may not fully represent the broader U.S. demographic, and the long-term effects of weight regain after discontinuing semaglutide remain uncertain. However, the findings suggest that with proper pricing strategies, semaglutide could offer a cost-effective solution for a population at high cardiovascular risk.

Given the increasing recognition of obesity as a chronic disease rather than a lifestyle issue, semaglutide’s dual benefits—weight loss and cardiovascular protection—could push insurers and policymakers to rethink coverage and access. As healthcare systems grapple with the financial toll of obesity-related diseases, the case for semaglutide as a cost-effective intervention is growing stronger by the day. 

The obesity medication market is becoming increasingly saturated. Currently, Novo’s closest competitor is Eli Lilly, with their tirzepatide GIP/GLP-1 dual agonist (marketed as Mounjaro for diabetes and Zepbound for obesity) showing slightly better weight loss than semaglutide. There is a fierce race to push the boundaries of obtainable weight loss, of different methods of administration (oral solutions are in the pipeline so patients don’t have to use a pen), of indications for comorbidities, of actually being able to generate enough supply to meet demand. With pharma continually pushing the limits of weight loss, it begs the question: how much weight loss is too much weight loss? Clinicians and patients are fearing that there may come a point where the weight loss is so excessive that it could actually create a host of health issues. That said, what is clear is that these anti obesity drugs are incredibly powerful, and, in the case of semaglutide, represent a cost-effective obesity treatment.