Novo's $499 self-pay Ozempic bypasses payers, curbs compounders

DTC pricing models

Novo's new self-pay pricing model is an attempt to improve patients' access to FDA-approved medications without having to rely on traditional payers, Catherine Humphries, senior consultant, Advisory Services, MMIT, said in an interview.

However, DTC models are not long-term solutions for filling insurance coverage gaps and are instead used as a catalyst for improving patient access.

"DTC programs are likely short-term pricing meant to help speed access to the drugs while payer coverage is lacking," Humphries explained. 

Manufacturers like Eli Lilly and Novo Nordisk prefer these programs because they tighten control over distribution and ensure product authenticity, while pulling demand away from compounded knockoffs. 

"The approach to provide a path to access to treatment via the DTC program applies pressure to payers to provide access to the treatments," Humphries shared.

Impact on payers and future access

Despite increasing demand, insurance coverage restrictions limit access to GLP-1 therapies. Employer plans often exclude weight loss drugs like Wegovy or Zepound entirely.

Payers have also implemented restrictive coverage prerequisites, including minimum body mass index thresholds, qualifying conditions and documentation of unsuccessful lifestyle modification efforts.

"Utilization management requirements that go above and beyond the approved label requirements most commonly include enrollment in a weight program," Humphries added. "This signals a lack of willingness [from insurers] to pay for the treatments."

Instead of launching competing affordability programs, Humphries predicts that payers will likely keep strict access restrictions until there is clear evidence that GLP-1/GIP receptor agonists provide long-term benefits for patients to justify the high costs. 

"Payers are concerned about the high cost of treatment, given the fact that patients need to remain on treatment to continue to gain the benefits of weight loss," she clarified.

Increasing coverage with expanded indications

Manufacturers are responding by expanding labels to align with costly comorbidities and strengthen the case for medical necessity.

"If data are collected showing a cost savings from reduced comorbid conditions or other metrics, this may apply more pressure on payers to cover the medications," Humphries suggested.

Since its initial obesity approval, Wegovy has added a cardiovascular risk-reduction indication and gained accelerated approval to treat noncirrhotic metabolic dysfunction-associated steatohepatitis (MASH) with moderate-to-advanced fibrosis.

Similarly, Zepbound demonstrated MASH resolution and fibrosis improvement at 52 weeks in a phase 2 trial and is FDA-approved for obstructive sleep apnea (OSA) in obese adults. Lilly has also advanced its next-generation triple agonist, retatrutide, under a master protocol designed to study multiple obesity-related comorbidities, including OSA and knee osteoarthritis.

For now, manufacturer-direct pricing models offer stabilized access to FDA-approved products but ultimately kick affordability challenges down the line.

However, "the approach could set a precedent for other high-cost therapies if patients feel safe with the approach and the manufacturer feels comfortable with the level of management the patient receives while on the drug,” Humphries concluded.

Alivia Kaylor is a scientist and the senior site editor of Pharma Life Sciences.