North Carolina will soon stop paying for state employees’ weight-loss drugs, including Wegovy, in a move that will impact about 25,000 people.

The governing board of the North Carolina State Health Plan voted to end coverage after it spent $100 million, or nearly 10%, of its prescription costs to fund weight-loss drugs for its employees in 2023 and costs were expected to rise significantly in 2024.

Officials noted during a meeting in late January, that in 2021, only 2,800 employees were utilizing weight-loss drugs at a cost of about $3 million per month. The costs rose sharply in 2023 to about $14 million per month.

“This is something we never anticipated,” North Carolina State Treasurer Dale Folwell, whose office runs the health plan, told the New York Times.

After failing to negotiate lower costs with the drug manufacturer, the board voted to end all coverage starting April 1. People covered by the state health plan who use versions of the medicines for diabetes will not be impacted and will continue to be covered.

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Skyrocketing Popularity and Prices

The popularity of semaglutide medicines has skyrocketed since the FDA approved Wegovy for chronic weight management in 2021.

The list prices for semaglutide medicines, including Ozempic, Wegovy, Mounjaro and Rybelsus, are higher in the U.S. than in other countries, according to a KFF analysis of OECD data.

Americans are paying between $936 to $1,349 per month for the prescription drugs, while other nations such as the Netherlands (home to Novo Nordisk, maker of Ozempic) are paying between $103 and $444 for a monthly prescription, KFF, an independent health policy research organization, reports.

Insurance Coverage Challenge

The struggle in North Carolina is not singular. Many other states and private insurers are grappling with the same issues.

Last year, the University of Texas system ended its coverage for Wegovy and Saxenda for weight-loss and weight-loss management after costs there rose from $1.5 million per month in 2021 to over $5 million per month in May of 2023, for 3,100 members using those medications.

A St. Louis-based hospital chain, Ascension, also opted to stop paying for the GLP-1 drugs for their employees last year. And the Mayo Clinic imposed a lifetime benefit of $20,000 for the drugs for its employees beginning in 2024.

Medicare does not cover any of the medicines for weight loss, although a significant number of people covered by public health insurance could benefit from its use.

Lawsuits Sparked by Weight-Loss Drugs

While the novel weight loss drugs have helped people all over the world, some claim they have been harmed by the drug.

Some patients are suing Novo Nordisk, the company that makes Ozempic, because they say it didn’t warn them about the risk of serious stomach problems. These problems include severe vomiting, blockages in the intestines or gastroparesis, where the stomach empties too slowly.

These lawsuits are just starting and lawyers are still taking on clients. Patients who experienced stomach paralysis or severe vomiting for four weeks or more, who suffered an intestinal blockage or who received a diagnosis of ileus after taking Ozempic may qualify to file an Ozempic lawsuit.

On February 2, 2024, the U.S. Judicial Panel on Multidistrict Litigation created MDL-3094 to centralize at least 55 lawsuits involving Ozempic, Wegovy, Rybelsus, Trulicity, and Mounjaro in a Pennsylvania federal court for coordinated or consolidated pretrial proceedings. More lawsuits are expected.