Sen. Heather Cloud, R-Turkey Creek, said the state should explore creative solution to bringing down the costs of covering GLP-1 drugs in health insurance plans.(Greg LaRose/Louisiana Illuminator)
Expenses have surged for Louisiana's public worker health insurance plans as more people are prescribed GLP-1 drugs, known by brand names such as Ozempic and Mounjaro. The diabetes drugs are now commonly thought of as weight-loss medications, though that use isn't covered by Louisiana state health benefits.
Even with GLP-1 coverage prohibited for obesity treatment, the state Office of Group Benefits spends $200 million per year on the drugs and is "adding people everyday," CEO Heath Williams said Thursday at legislative finance committee meeting.
"We're going to go Ozempic-broke," Sen. Heather Cloud, R-Turkey Creek, said.
Over the past six years, GLP-1 drugs have replaced Metformin, a cheaper, but sometimes less effective, Type 2 diabetes drug. By comparison, Metformin cost the state $2 million annually when it was doctors' go-to prescription, Williams said.
"We are moving members from very inexpensive drugs to very expensive drugs - to the tune of $20 drugs to $1,200 drugs per month," he told lawmakers.
The Office of Group Benefits provides insurance coverage to 212,000 people, including state employees, public school teachers, some local government workers, their family members as well as public sector retirees. Its expenditures are around $2 billion per year, and the money comes partly from premium payments plan members make.
Legislators approved contracts Thursday with new pharmacy benefit managers, who help negotiate drug prices for insurance plans. The contractors, Livinti and SilverScript, will be required to provide more transparency about what is driving the high number of GLP-1 prescriptions being written, Williams said
Earlier this year, legislators approved a state budget that would have covered the cost of GLP-1 prescriptions for public workers to treat obesity, but Gov. Jeff Landry vetoed that provision.
"These drugs can cost $1,000 a month per person," Landry wrote in his June letter to state lawmakers explaining the veto. "Even temporary coverage could set expectations for long-term use that Louisiana simply cannot afford."
Legislators attending Thursday's meeting blamed pharmaceutical companies for the high cost of GLP-1 drugs, saying the same medications cost far less in other countries.
Cloud said the state should consider a workaround where compounded versions of GLP-1s - essentially copycat versions of the medication that are more affordable but not vetted by federal officials - would be covered by the state health insurance plan.
"To me, that is our only path forward right now is to figure out how to cover [the compounds]," Cloud said.
The U.S. Food and Drug Administration warned earlier this month against using compounded versions of GLP-1 drugs however. The agency has not reviewed the compounds for safety, effectiveness and quality.
"A compounded drug might be appropriate if a patient's medical need cannot be met by an FDA-approved drug, or the FDA-approved drug is not commercially available. However, compounded drugs are not FDA approved," the agency said in a statement released Sept. 5.
Such compounded versions are already used broadly in the public because the medications' costs are high and insurance coverage is limited.