UnitedHealth flags challenges in Medicare obesity drug pilot
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The corporate logo of UnitedHealthcare, the insurance unit of UnitedHealth Group, appears on the side of one of their office buildings in Santa Ana, California, U.S., April 13, 2020. REUTERS/Mike Blake/File Photo
By Sneha S K and Sriparna Roy
April 21 (Reuters) - UnitedHealth said on Tuesday there are "challenges" around the Medicare pilot program to cover obesity drugs, adding uncertainty over whether health insurers would sign up for it.
Under the program called Balance, the U.S. Centers for Medicare and Medicaid Services will set standardized coverage terms by directly negotiating guaranteed net prices, potentially capping out-of-pocket costs for GLP-1 drugs from Eli Lilly and Novo Nordisk.
"There are some notable challenges and outstanding questions with the currently planned structure," said UnitedHealth's chief of government programs Bobby Hunter during the company's first-quarter conference call, adding that the company is in active dialogue with the agency.
The program, a focus for the Trump administration, had a Monday, April 20 deadline for health insurers to opt in.
The agency said it will roll out a Medicare GLP-1 payment demo in July as a short-term bridge to the BALANCE program, letting beneficiaries access the drugs at administration-negotiated prices.
UnitedHealth said it would participate in the demo.
Bloomberg News, citing a spokesperson, said CVS Health, parent of the major Medicare insurer Aetna, declined to participate in the obesity coverage program.
Eli Lilly shares fell nearly 2%, while U.S.-listed Novo Nordisk shares were down 3.4%.
Plans have long been vocal about their concerns with the model and unlikeliness to opt in due to various uncertainties, said TD Cowen analyst Molly Turco.
U.S. President Donald Trump signed a deal in November with Lilly and Novo to slash the prices of popular GLP-1 weight-loss drugs for the government's Medicare and Medicaid programs, as well as for cash payers.
"It's clear open negotiation is a proven tactic embraced by the Trump administration and we're not surprised managed-care providers are taking to the public forum as well," said Citi analyst Geoff Meacham.
CVS and other health insurers did not immediately respond to a Reuters request for comment.
(Reporting by Sneha S K and Sriparna Roy in Bengaluru; Editing by Tasim Zahid)
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