One of the latest developments in the pharmaceutical industry has been CVS Health’s decision to drop Eli Lilly’s Zepbound from its preferred formulary list in favor of prioritizing coverage of Novo Nordisk’s Wegovy starting July 1, 2025. This move is part of a larger battle between competing pharmaceutical companies, pharmacy benefit managers, and direct-to-consumer telehealth companies. It sheds light on the complex incentives within the U.S. pharmaceutical supply chain and how they ultimately impact patients.
Market Dynamics
Zepbound, a medication approved for chronic weight management, is similar to Lilly’s diabetes drug Mounjaro but marketed specifically for weight loss. Despite its effectiveness in helping patients lose weight and improve metabolic health, Zepbound comes with a high price tag, typically exceeding $1,000 per month. The demand for GLP-1 medications like Zepbound and Wegovy has been rising, with Zepbound gaining market share from Novo Nordisk’s competing product.
The decision to exclude Zepbound from CVS’s formulary is likely driven by negotiations over pricing, rebates, and strategic contracting. Pharmacy benefit managers play a crucial role in determining which medications are covered and at what cost, based on agreements with drug manufacturers.
The Role of PBMs in Access and Affordability
Pharmacy benefit managers, such as CVS Caremark, Express Scripts, and OptumRx, have significant control over which medications are accessible and affordable for patients. While PBMs were originally intended to lower costs, critics argue that they may prioritize drugs with higher list prices and rebates, potentially impacting patient outcomes.
Impact on Patients
For the 90 million Americans whose pharmacy benefits are managed by CVS Caremark, the exclusion of Zepbound from the formulary could mean losing access to the medication or facing increased out-of-pocket costs. Transitioning to Wegovy may not be an equal substitute for all patients, leading to uncertainty in terms of efficacy and tolerability.
Patient access to Zepbound has been a focus for Eli Lilly, which has implemented copay assistance programs and launched direct-to-consumer options like LillyDirect and partnerships with telehealth platforms to facilitate access to the medication.
A Sign of Things to Come?
CVS Caremark’s decision may signal a new phase in the battle over access to GLP-1 medications. As concerns about the cost of covering weight loss drugs grow, PBMs are under pressure to limit access or negotiate better terms. However, public demand for these medications continues to rise, prompting manufacturers to explore alternative distribution channels to reach patients more directly.
The evolving landscape of pharmaceutical access and affordability highlights the need for ongoing discussions and collaborations among stakeholders to ensure that patients receive the care they need at a reasonable cost.
The potential success of direct-to-consumer channels could lead to further disintermediation of traditional pharmacy benefit models, especially for high-demand therapies like GLP-1s. This shift in the healthcare landscape has the potential to significantly impact how patients access and receive their medications.
The current system of drug access in the U.S. is often driven by opaque rebate structures that can make formulary decisions feel arbitrary to patients and providers. These decisions are often influenced by profit-driven motives within a competitive supply chain.
The increasing popularity of GLP-1s has brought these issues to the forefront. Manufacturers, payers, and PBMs are all vying for a piece of the pie, leaving patients caught in the middle of the power struggle.
As the healthcare industry continues to evolve, it is crucial for stakeholders to prioritize patient-centric solutions that ensure access to necessary medications without unnecessary barriers. Direct-to-consumer channels have the potential to streamline the process and provide patients with more control over their healthcare decisions.
In conclusion, the shifting landscape of pharmacy benefit models and the rise of direct-to-consumer channels underscore the need for greater transparency and patient empowerment in the healthcare system. By prioritizing patient needs and preferences, stakeholders can work towards a more efficient and patient-friendly healthcare experience for all.
