EPISODE 4: GLP-1 Drugs: Rapid Growth and Market Evolution
- Whitney Vadeboncoeur
- Sep 13, 2024
- 16 min read
Updated: Mar 1
LISTEN BY CHOOSING YOUR PLATFORM
Welcome to the fourth episode of Only Healthcare! In this episode of the Only Healthcare podcast, Dr. Randy Vogenberg and Michael Navin dive deep into the GLP-1 drug category, exploring the rapid growth and market evolution surrounding these diabetes and obesity management medications. This conversation sheds light on the opportunities and challenges faced by employers, manufacturers, and patients in managing these high-demand and high-cost treatments.
Key Topics Covered:
The Explosive Growth of GLP-1 Drugs: These drugs have become game-changers for patients with metabolic conditions, but they also bring unique challenges in managing costs and access for employers and health plans.
Employer Perspectives on Managing Costs: As employers seek cost-effective solutions, they are faced with decisions on drug coverage, particularly for patients with obesity but without a diabetes diagnosis.
The Role of PBMs and Manufacturers: The episode highlights the often-contentious relationship between PBMs and drug manufacturers.
Downstream Benefits of GLP-1 Drugs: Beyond managing diabetes, GLP-1 drugs are also showing promise in improving cardiovascular health and overall metabolic profiles. Explore the broader benefits of these drugs and what future indications might look like, with a particular focus on the evolving clinical evidence.
The Patient's Journey: The discussion touches on the importance of behavioral change, diet, and exercise in achieving optimal outcomes with GLP-1 medications.
What’s Next for GLP-1 and Metabolic Treatments: The episode wraps up with a forward-looking perspective, as Randy and Michael consider the future of GLP-1 drugs, including the potential for direct-to-patient programs from manufacturers, compounded pharmacy solutions, and the evolving market as more players enter the space.
For feedback or to suggest topics for future episodes, reach out to us at onlyhealthcarepodcast@gmail.com.
About the Hosts:
Michael Navin brings 27+ years of experience in the pharmaceutical industry, specializing in commercialization. As the owner of a successful agency, he has launched numerous pharmaceutical products, making advanced treatments accessible to the public.
Dr. Randy Vogenberg started his career as a pharmacist and has since worked across all areas of healthcare delivery, including policy and employer-sponsored plans. With a doctorate in healthcare administration, Randy spent the last 25 years navigating the self-insured marketplace, providing value for the ongoing changes in healthcare.
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Hosted by: Michael Navin & Randy Vogenberg, PhD
This Podcast is sponsored by:
Peek: Peek is reimagining access through innovation, technology, connectivity, and partnership. Peek offers a comprehensive and unique suite of solutions to help clients improve access and affordability for prescription drugs.
The Peek Meds Marketplace is one of Peek’s differentiated offerings that gives employers a revolutionary new approach to controlling runaway prescription costs for their employees by providing unprecedented transparency, simplicity - and cost savings. The Peek Meds Marketplace aggregates cash discount cards, manufacturer copay offset programs, and an employee’s insurance information to provide a holistic and personalized view of prescription price options. This easy-to-use platform offers a one-stop-shopping experience for prescription drugs.
Peek’s team has decades of experience in the pharmaceutical industry and offers various services to biopharma manufacturers, brokers, benefits consultants, third-party administrators and employers. Visit peekmeds.com to learn more.
Institute for Integrated Health (IIH): Health care benefits, insurance coverage regulations, and doing business in the healthcare industry can be complicated. At IIH, Dr. Randy Vogenberg and his team understand these unique challenges and provides strategic guidance customized to every client. To help overcome your unique challenges, IIH delivers education, planning and advisory on market trends, and U.S. health care market intelligence. The firm’s decades of proven success are due to strategic collaboration with associates from the business, clinical, and scientific communities. https://iih-online.com/.
Music by:Hanu Dixit, https://www.youtube.com/hanudixit
Episode 4 Transcript: GLP-1 Drugs: Rapid Growth and Market Evolution
Randy Vogenberg (00:01)
Welcome back to the Only Healthcare Podcast. I'm Dr. Randy Vogenberg, and I'm here today with Michael Navin. Michael, welcome, and how are you doing today?
Michael Navin (00:24)
Randy, good to see you. How are you? I am doing well. I'm up in the Northeast where the weather is spectacular and there's no humidity. So very happy to be up here.
Randy Vogenberg (00:35)
Excellent. Yes, it's another great day in South Carolina as well. It's not too hot and low humidity for a change. So we're enjoying it here as well. So our conversation today is looking into the example of GLP -1 drugs as a category to illustrate how employers could potentially handle these relatively high costs but really high volume drugs in the marketplace. What we've seen is a lot of change and evolution around diabetes care. In a way we're kind of going back to looking at it as a metabolic syndrome and the indications that we're seeing around the use of this category the GLP -1 drugs just exploded so rapidly.
So what I thought would be good to start with is just a kind of a background in what has been happening and what have you seen in the market in general around the management of products by the health plans, the PBMs and so forth in some of work that you've been doing.
Michael Navin (01:51)
Yes, so great. Thanks for saying that, Randy. And fortunately, my career has been in the diabetes space on the commercial side for many years. So I've seen a lot of products come to market and seeing patients benefit tremendously. I think this category is absolutely a game changer. And that's why you're seeing this huge amount of volume taking place. It's also very interesting because you have brands and you also have compounded drugs as well. And I think that's something unique that is we haven't seen before with any other real disease categories at this magnitude. But what we're seeing from the employer side, I'll take two sides. I'll start with the employer and I'll also talk about some of the manufacturer conversations we've had. On the employer side, they're just looking for the best deal. They're looking to they know there's so much volume. They're trying to manage the cost that's associated with it. I know you just sent out an article that was published, I believe, yesterday that Blue Cross Blue Shield of Michigan is now canceling their non -diagnosed type 2 diabetic, but they're obese GLP -1 patients and saying they're not going to pay for it if you just have obesity, but not diabetes. And I think that's interesting because of the financial dynamics that go with that.
So when you take the patient and you take the planned sponsorship out of the equation, the price of that drug is exponentially higher. And so when you have that situation, it's probably likely those people are going to go to a compounding pharmacy if in fact the drugs are working for them and go away from the brands because they can't afford it. And one of the challenges, one of the frustrations on our part, and my part, when I see this, is the PBM can still pass on that discount to that patient, or the manufacturer can still collect that same amount of dollars from that patient.
But the system that we have in place doesn't allow for it. So really, you've got to look at those kind of patients and say, what's going to happen to them in that space? And on the manufacturer side, I think what they're saying is, the demand has been so great. The results have been so great, but they still have these challenges working through the PBM. So they want the opportunity to work in what I would call alternative channels to be able to provide these medicines at a fair price to people who need them and that are actually benefiting from them.
On top of that, as we know, is diabetes is not just a... take a shot and get better, right? You have to have disease management. You have to change your behaviors, eating, exercise, whether you smoke or drink, all those things have to be followed with behavioral modification in order to see the maximum results that the patients and the doctors want to see. So it's not an easy disease state. We certainly have an epidemic in the country of people with diabetes. There's definitely things that could be implemented to make an impact and also not make it so unaffordable for people to take these medicines.
Randy Vogenberg (05:30)
I think the whole issue has evolved around obesity management and weight management. It's become problematic because of lifestyle and traditionally in a lot of plant designs, things that could be controlled or is controlled by a patient are generally not covered. And that's what we're seeing in the Blue Cross example.
It's not that surprising. think a lot of plans have kind of looked at that. the kind of follow on question to that is we know that the DLP -1s in the example that we're using are approved for use in diabetes. But we also know there's literature out there already. There'll be more coming from clinical studies around the broader metabolic syndrome. So cardiovascular benefits and other types of benefits that will be accrued from the use of a GLP -1 is expected. So what is the anticipated impact of that on the market based on what you've been seeing?
Michael Navin (06:40)
Well, I think what the manufacturers are doing is they're using their data to get downstream indications that make sense for the metabolic syndrome patient, right? But it's really the result of the drug working and the downstream positive implications of the drug working that leads to those benefits. It's almost, I mean, I hate to say it, but it's almost like table stakes, right? If you're gonna have a diabetes drug that's going work and be impactful and powerful, all those downstream benefits exist. know, eye disease, diabetic foot ulcerations, you know, all of those conditions should be improved when you improve your metabolic profile. Typically is done by weight loss, exercise, diet, things of that nature. So it's not a surprise they're going to have indications for cardiovascular disease. And so I just see that being part and parcel of the category. I don't see it having separate revenue opportunities for additional down road treatments, right?
It's a treatment for metabolic syndrome and the downstream benefits exist. I don't know if you're gonna see growth because, I've had a heart problem, I should take an ozempic, right? I don't see that being the case.
Randy Vogenberg (08:18)
So what, since we're talking about it from an employer perspective who may be a plan sponsor themselves and the self -funded example that we can use, there's some other considerations that need to be looked at in terms of the decisions that are being made by employers as a plan sponsor in their benefit design for coverage. What does that do or how does that impact the patient?
when they go to fill a prescription in a pharmacy, what's been some of the analytics that you've seen happen?
Michael Navin (08:55)
Well, like any other category, when it gets expensive, there's very, the compliance on most of the medications is poor. And I think you're seeing similar compliance for Ozempic and the GLP -1s. I don't have the data in front of me to talk to it, but I think anything that has high out -of -pocket implication for the patient, typically you see less compliance on that medicine.
But really what's... frustrating from my perspective is trying to come up with strategies to alleviate those problems. And I think one of those is the PBMs are a huge problem. They are asking for huge rebates. Who knows how much that gets processed through? The patient only sees that the drug costs $1 ,000. They don't see the rebated price. And really the rebated price is what they should be paying.
because that's the benefit of having the powerful PBM on your side, right? Is being able to get those, to pay those out of pocket costs at the same level that the PBM is paying those out of pocket costs. The whole rebate game here is a disaster in my opinion, and will continue to be until it gets straightened out. And really, so then you're not really getting the true cost savings passed back down to the patient.
And the PBMs are making a lot of money on GLP -1s and they don't even make them. So it's a little bit concerning that you've got a processor of claims making more money than the manufacturer is.
Randy Vogenberg (10:34)
So, could you give an example of what the implications are, paying cash versus somebody's buying on their insurance plan, to kind of put a little more beat on the bone that you've thrown out there?
Michael Navin (10:56)
Yeah, so if you're paying cash for a GLP -1, you're paying somewhere around $900. And I'll just round the numbers so we won't get into specific details. In the typical insurance product, you're probably seeing a net price in the $400 to $500 range, meaning there's probably somewhere in the range of a 40 to 50 % rebate being processed in the back end.
So the drug company receives $400 to $500 for that drug and the PBM receives four to $500 for that drug. The question is, what do they do with that money? But the patient only sees it as $1 ,000 or $900, right? if you have a high deductible plan, you're paying out that full price if you haven't met your deductible. And at the same time, your PBM is getting a rebate back on your prescription that you just paid $900 for, and you're not seeing that.
So when you think about that over a 12 month period of time, it's a significant amount of money. And when you're in the insurance, so let's say you a $2 ,500 deductible, it's gonna take you three months to hit your insurance. You've paid $3 ,000 and the insurance and the PBMs received a rebate of about $1 on the money that you spent. So in the first three months, you're down.
You're down $3 ,000 and they're up $1 ,500. And it's really a crazy science, right? So then you start getting into the 12 month downstream effect. And really at the end of the day, if you have insurance or PBM benefit, they're not paying a lot for that product. You're footing most of the bill as the patient. So it's really difficult and people don't know. I mean, that's the whole thing is people don't know and
There are tools and resources that they can use. We have our platform, Peak, which is focused on transparency for patients and employers. So they could use that platform to really manage and see their costs, including their insurance. So they could budget much better on an annual basis for GLP -1, understanding what their out -of -pockets will be. And so those are those types of solutions out there.
And again, I think What employers are looking for is the ability to work directly with the manufacturers. If they could, they would, and they would be able to provide that benefit directly down to their patients or their employees.
Randy Vogenberg (13:29)
I think you brought up a couple of good points. One is there's certainly a major need for more and continuous collaborations between the employers as planned sponsors and the manufacturers in any category of medication for all the conditions. And the other aspect is the need to incorporate better behavioral change and tools that can be more effectively resourced down to the patient to support
them and their effort, in this case around eventual weight loss related to their diabetes or cardiovascular condition. There's a lot that has been done over the years. We certainly know from a lot of the government promotions and a lot of the health and wellness efforts by employers, diet, exercise, good nutrition, etc. are always a cornerstone, but it's difficult. So what are some of the things that you've seen over the years to help support patients, whether it's in their diabetic journey or just general health that manufacturers have been involved in as an example.
Michael Navin (14:40)
Yeah, so in my experience, I've been involved in many disease management programs where they're non -branded, very above board, very disease focused, and building custom programs for payers and plan sponsors to give to their patients. A lot of times those aren't commercially available. It's really available through another channel, like a quality channel within the plan or within your plan or your
plant sponsor. So they work, but they don't work if they're not used, right? And they're not overly advertised. I think this category, just going back to what you said before, is I think you have to separate cost versus impact. The impact of these products has been tremendous.
When you consider this disease state over the last 30 years, and the biggest thing it does is it creates, you know when people lose weight, they feel better. When they lose weight, they feel like they can empower themselves to do more. So they're not just taking a pill that might alter their hemoglobin A1c a little bit. They're actually taking something that is altering their lifestyle. And you see it in the patient so that you can see physically people are losing the weight faster. And that's why it's such a phenomenon. There's a lot of negative media press.
Around the products too, because you've seen people taking it like movie stars and athletes that probably don't need it. And so that sends the wrong message in a clinical world. But I think the good these products are doing for the patients it was designed for is tremendous. And so if an employer could get behind that and have a logical strategy to manage the upfront costs against the downstream negative costs, I think you can build a nice bridge between the employer and the employee and the manufacturer to get them the drugs they need, the drug they need. And of course the provider, you can't forget the provider. They're the conductor here in all of this. But the results these provide is a great tool for the provider and the patient is really great.
Michael Navin (17:04)
It's just a matter of having, I think, a lot of conversation and communication around what's happening and also tracking the patients. There should be tracking mechanisms. It shouldn't just be, take it for 12 months and let's see how you do. I think there's got to be ways of being able to use technology to track their outcomes, to track their progress, and then implement some educational programs because it's not just a binary disease. can't treat it with a click, you know, click a pen and an injection. have to have behavioral change. You have to change your lifestyle. You have to diet and exercise in order to see the major, you know, the impact. The drug itself isn't just enough to do the job.
Randy Vogenberg (17:53)
Well, certainly the trend we're hearing more about today is looking at patients more holistically. 360 view we used to talk about as well. And it does speak to the need for alignment with all the stakeholders. So starting with the employer, manufacturer, we talked about with their collaboration.
how those collaborations also get coordinated with the provider as well as with the patient. It becomes more more important because we have more opportunities and as you mentioned earlier, the indications that are going to be coming in a variety of different medical conditions, not just diabetes, because we're looking at a holistic perspective now. We're not just looking at treating a particular single condition or a single area anymore. We see the same thing happening in cancer today. So I guess the last question, kind of put a capstone on this aspect of our podcast. What are the things that we would see coming or you would see coming over the next year or two in this field. What's going to be continuing to change and what kinds of tools might be made available to more empower the patients and providers.
Michael Navin (19:22)
Well, you've already seen some of it with Lilly. Eli Lilly has launched a direct program where they're trying to do patient direct with a few of their products, one of them being the ZepBound product. So there is some uniqueness to this as it seems to be a patient -driven demand for an opportunity to take one of these products.
You've seen, as I said earlier, you've seen the advent of or the explosion of compounded pharmacy distribution of the GLP ones, which I think will slow down because of the supply chain has caught up in the marketplace. I think you'll start to see something slowing and I think you'll see some potentially some litigation against some of these compounded pharmacies.
So it's going to force people into the brands. And I don't know if that's a, from a cost perspective, the jury's still out. Is that a good thing or a bad thing? And I think if you're gonna do that, I think you need alternative channels like a peak marketplace or some other channels that an employer can have direct access without having to pay the fees that the PBMs are demanding.
Randy Vogenberg (20:42)
It sounds like there's a need and an emerging opportunity to be thinking differently. If you're an employer, how you're going look at your contracts with different vendors, how you're going utilize different vendors, and perhaps organize the care delivery contracts and systems that are created to more effectively help the members of the plan, which are the patient, to better manage their own conditions. Something that we're hearing more about in some of the other conditions that typically employers are spending lots of money on as well.
Michael Navin (21:21)
Yeah, mean, you made a really good point, Randy. I think patient accountability is huge, right? Because it is a behavioral disease state. They've got to take accountability and they've got to use metrics to be able to show the result. So I think having those resources available for a patient is really critical.
Randy Vogenberg (21:44)
Yeah, I think a lot of what we've been talking about, looking at a higher cost medication, and we're going to be seeing more of those, but also scenarios where you're also going to have high volume coupled with the higher costs will have a big impact on plans. So there are ways in which employers can do things differently, start thinking about it ahead of time, because these are coming, it's happening, some of them are here already.
We're going to see this in other categories as well. So I think we're going to have an opportunity in this podcast to explore more of these kinds of scenarios as we look at this dynamic between cost and volume of a whole variety of medications and therapies, both in the pharmacy benefit and also in the medical benefit. So thanks to you today, Michael.
Michael Navin (22:34)
And I'm just gonna add one more thing. If there's a specific areas anyone listening to this wants us to address, give us a heads up and we can look at some of those things ahead of time and bring some information back to another podcast.
Randy Vogenberg (22:52)
We're always welcome questions as well as ideas for other topics or themes to cover in the Only Healthcare podcast. So we appreciate getting feedback from our listeners. Thank you today, Michael, for joining me in this conversation around...what employers could be looking at with higher costs and high volume drugs and using the GLP -1 as our example. Please join us on future Only Healthcare podcasts and we look forward to hearing from you in the future.
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