Novo Nordisk (NVO) and Eli Lilly (LLY) are set to introduce a new approach to expand access to weight loss drugs, selling the injectables directly to employers, thereby avoiding pharma middlemen known as pharmacy benefit managers, Bloomberg News reported on Friday.
Starting from Jan. 1, the pharma giants will offer their obesity drugs Wegovy and Zepbound through Waltz Health, a digital health company focused on helping employers buy affordable medications.
Under the offering, employers will procure the injectables by paying upfront, fixed prices without involving rebates and fees, which are usually paid to PBMs as part of traditional drug purchases.
Multiple companies have already signed up to join the model, Waltz CEO Mark Thierer said, adding, “This will be the absolute cheapest way” for those on employer benefit plans to get access to the weight loss drugs.
Employers typically rely on PBMs to negotiate drug prices for their sponsored health plans, which in the U.S. cater to about 165M workers. Leading PBMs include Cigna’s (CI) Express Scripts, CVS Health’s (CVS) Caremark, UnitedHealth’s (UNH) Optum Rx, and Elevance Health’s (ELV) CarelonRx.
According to Thierer, four companies have agreed to launch the model, which targets employers who currently do not cover the weight loss drugs. A recent survey from the healthcare policy organization KFF indicated that only about 43% of companies with over 5,000 employees offer coverage for weight loss drugs.
“This is meant to be an open-source marketplace where drugs compete on their clinical merits” and price, Thierer said, adding that drugmakers want “a level playing field.”
The model marks LLY and NVO’s latest effort aimed at expanding GLP-1 access since the launch of their direct-to-consumer sites, Novo Pharmacy and Lilly Direct, which offer the two blockbuster drugs and other medicines to cash-paying patients at discounted prices.