GLP-1 Tiering Agreement Reached, Says Optum Rx President

Optum Rx has reached an agreement with the manufacturers of the approved glucagon-like peptide 1 (GLP-1s) drugs that will allow health plans to tier access to the drugs and still receive a rebate.

In an interview with Managed Healthcare Executive (MHE) at the Asembia specialty pharmacy meeting in Las Vegas this week, Jon Mahrt, president and chief operating officer of Optum Rx, said "the negotiations we just concluded will allow for tieiring" and that rebates had been previously contingent upon health plans covering according to criteria included in the FDA-approved label.

After this article was published, an Optum official contacted MHE and said the negotiations with the manufacturers were ongoing and not been concluded.

Jon Mahrt

Mahrt said the rebates bring the monthly price of the GLP-1s for payers down to net cost of about $700 per month.

“Up to this point, it’s generally been prior authorization to label that unlocks [the rebate], but that’s a wide-open door and health plans are saying, I can’t afford [it], I have clinical programming, I can tier it. But to this point, if you tiered it, you got no rebate at all,” said Mahrt.

Mahrt said tiering might involve health plans narrowing coverage of the GLP-1s to people with higher body-mass indexes or with comorbidities.

Mahrt said some of the traditional levers that Optum Rx and other pharmacy benefit manager (PBMs) use to bargain with drug manufacturers are not currently available for the GLP-1s. Novo Nordisk, a Danish company, and Eli Lilly are the only two companies with FDA-approved GLP-1s, and they have struggled to keep up with the huge demand. They don’t want exclusive listing on PBM’s formulary, he said, because they are concerned that won’t have enough supply to meet the surging demand for the drugs.

Mahrt spoke with MHE after delivering a presentation on GLP-1s on Tuesday that was one of the many 40-minute educational sessions at the Asembia meeting.

During the presentation and in his interview with MHE, Mahrt said that the cost pressure of GLP-s prescription payers will ease up in about two years. By then, manufacturing capacity will have caught up with demand and there may be as many as half-a-dozen competitors coming into the market, Mahrt told MHE.“I think two years is very real. And it’s how I’m guiding my clients,” he said.

The GLP-1 drugs were mentioned countless times at the Asembia meeting even though they are not usually classified as specialty drugs because they don’t require special handling and are not quite expensive enough to merit that label. The FDA-approved GLP-1s include liraglutide, sold as Victoza as a diabetes drug and Saxenda as an obesity drug; semaglutide, sold as Ozempic as a diabetes drug and as Wegovy as an obesity drug; and tirzepatide, sold as Mounjaro as a diabetes drug and as Zepbound as an obesity drug. Novo Nordisk makes and markets the liraglutide and semaglutide products, and Eli Lilly makes and markets Mounjaro and Zepbound.

“I will tell you that a year ago, I had a great demand for strategic discussions about cell and gene therapy. What would we do? How should we think about supporting them clinically? Do we have risk management strategies? Now, though, I virtually beg to have that conversation because dominating the discussion is the spend associated with GLP-1s,” Mahrt said during his presentation.

Mahrt said 42% of the double-digit increase in drug expenditures this year is driven by the GLP-1 class and that it’s responsible for 77% of the increase in expenditures on traditional drugs. So far, he said, most of the spending for GLP-1s has been for the treatment of diabetes. Now they are looming as treatments for obesity.

“When you consider obesity (treatment) coming on to a plan or coming on to a benefit, you’ll see that more than half of U.S. adults are eligible (according to their) label guidelines for a GLP-1 for treatment of obesity, “ Mahrt said. “This creates a new challenge for plans because to this point, many of the drugs in the obesity class simply weren’t effective. Maybe they were questionable and so therefore, generally, the class was excluded. But now you have this incredibly effective drug that people want.”

The GLP-1s also stand to be approved for other conditions, said Mahrt. He listed five on one of this slides and the number of affected adults in the U.S.: chronic kidney disease (37 million), sleep apnea (39 million), nonalcoholic steatohepatitis (13 million), heart failure (6.5 million) and Alzheimer’s s disease (more than 6 million).

The added indications have already started to happen. The FDA approved Wegovy as preventive treatment for cardiovascular disease among people who are overweight and obese in March 2024, and Mahrt described the future of the GLP-1s as treatments for chronic kidney disease and nonalcoholic steatohepatitis as “incredibly promising.”

But he also expressed worry that the drugmakers will market their GLP-1s under a different, higher-priced brand name for each indication as has already happened with diabetes and obesity. The list price — the wholesale acquisition cost (WAC) price in pharmaceutical industry parlance — for a 30-day supply of Ozempic is $969, according to a slide that Mahrt presented. For Wegovy, the 30-day WAC price is $1,349. “Same drug, same manufacturing costs, but coming into the market at a materially higher cost,” Mahrt noted.

Mahrt’s slide showed the 30-day WAC price for Mounjaro and Zepbound as being essentially the same — $1,069 for Mounjaro and $1,060 for Zepbound. He said Lilly deserved a “shout out” for the pricing them at the same level.

He said he is especially concerned about the price of a putative GLP-1 for nonalcoholic steatohepatitis because manufacturers may set the price to match existing therapy for the disease that is priced several times higher than the current price of the GLP-1s.

Mahrt, who became president of Optum Rx three years ago, ranged over a wide array of topics in his presentation in the question-and-answer period and in his interview with MHE. He touched on PBM transparency; “leaning in to” lower WAC prices instead of higher ones with offsetting and rebates; giving PBM clients audit rights; and biosimilars.

Several times he pointed the finger at pharmaceutical manufacturers for setting high prices. Mahrt invoked the findings of an Institute for Clinical and Economic Review report about unjustified price hikes, and he singled out GSK for taking its asthma drug, Flovent, off the market and replacing it with a high-priced authorized generic.

Mahrt also spoke about the consequences of high drug prices. He told the Asembia audience that his wife is being treated for pancreatic cancer and that he was concerned about the risk of her having to delay treatments or go off treatment altogether because of a low white blood cell count, a common side effect of chemotherapy. Mahrt said he asked her doctors about using Neulasta (pegfilgrastim) prophylactically instead of waiting to see if her white blood cell count got too low.

“The answer was that they’re not prescribed for most patients because of the economic burden. They can’t afford them,” Mahrt said. “Let that sink in. It’s pancreatic cancer. You have to finish chemo. But it’s price that was driving the barrier.”