Amid a yearslong wave of enthusiasm and uptake for Eli Lilly and Novo Nordisk's blockbuster obesity medicines, the drugs have scored a strong endorsement from an independent U.S. cost watchdog.
In a draft report (PDF), the Institute for Clinical and Economic Review (ICER) determined the drugs are "highly cost-effective" because of their ability to help patients lose weight, reduce metabolic risk factors and address obesity-related health complications. The group specifically looked at Novo's injectable semaglutide at the 2.4-mg dose, Novo's investigational oral semaglutide 25-mg dose and Lilly's injectable 15-mg dose of tirzepatide.
After reviewing the health benefits of the medicines, the cost watchdog said the drugs met the mark on "commonly used cost-effectiveness thresholds."
"Because treatment with all three drugs results in substantial weight loss and improvement in metabolic risk factors, we have high certainty that all three drugs have substantial net health benefit over lifestyle modifications alone," ICER reviewers said in the report.
As for how the drugs compared against one another, reviewers gave Lilly's tirzepatide a "promising but inconclusive" designation when comparing its profile against the two versions of semaglutide. In the Surmount-5 study, the Lilly drug was associated with average weight loss of 20.2%, compared to 13.7% for injectable semaglutide.
The team gave oral semaglutide a "comparable or worse" assessment compared with its injectable counterpart, flagging weaker weight loss results and an uncertain cardio risk reduction benefit that's associated with the injectable version. The FDA is currently reviewing the oral semaglutide 25-mg dose.
The ICER used estimated net prices from SSR Health for its analysis. The estimated net cost for a year of semaglutide was $6,830, and, for tirzepatide, it was $7,973.
The drugs carry list prices of about $16,000 and about $13,000, respectively, but the companies also market them directly to cash-paying patients for about $6,000 per year.
Despite its glowing cost-effectiveness analysis, the ICER flagged "serious" budgetary concerns related to the drugs. Since about 40% of the U.S. population is living with obesity, the ICER says fewer than 1% of eligible patients can be treated before the drugs cross its "budget impact threshold" of $880 million annually.
To calculate its budget impact threshold, the ICER looks at U.S. GDP, the number of new drug approvals over the most recent two years and overall drug spending. The calculation is an attempt to identify the level of spending on a new launch that the healthcare system can readily absorb. Pharma companies have described it as "arbitrary" and have called on the ICER to drop the approach.
A Novo spokesperson said the company is "pleased to see that ICER continues to reaffirm that Wegovy is cost effective." Still, the drugmaker flagged "limitations" in the report's analysis of oral semaglutide because its application for the daily pill is still under FDA review and because the full OASIS 4 trial data have yet to be published.
Founded nearly two decades ago, the ICER has often butted heads with pharmaceutical companies when releasing cost-effectiveness assessments for the industry's hot launches. But, in recent years, the nonprofit research group has gained more influence as health plans have started to cite the agency's work in their coverage decisions.
The ICER plans to solicit comments on the report until Oct. 6 and hold a public briefing on its findings in November. Afterward, the group plans to publish a final report with its assessment of the popular obesity medicines.