It was meant to be funny. Our client Lucy (not her real name) received a holiday card from her best friend that read, “May all your troubles last as long as your New Year’s resolutions.” Having made a resolution for the past eight years to lose weight, Lucy laughed at the sentiment. Secretly, she believed 2025 would be the year she succeeded.

Over the past few years, both Lucy’s weight and blood sugars had steadily risen. At her last checkup, knowing she had tried multiple weight loss remedies before, her physician prescribed Ozempic, a GLP 1 inhibitor medicationproven to aid weight loss when other methods have failed. 

The news was all good: Her employer’s group health insurance plan covered the medication, her copays were reasonable, and the side effects were tolerable. Most important, in the last few months of 2024, Lucy finally began to lose weight. She was starting this year with confidence in her ability to reach her weight loss goals. 

But she soon ran into a complication: Lucy will transition to Medicare in April when she turns 65. Unfortunately, Medicare Part D does not cover Ozempic (or any other drug) for the sole purpose of weight loss.

“Why not?,” asked Lucy. “How can Medicare deny payment for a drug with so many potential health benefits and FDA approval?”

The answer lies in the way prescription drug coverage first became available to Medicare beneficiaries in 2006. At the time, the efficacy of weight loss drugs was controversial; some were even known to cause serious side effects. It was also widely believed that weight loss was for cosmetic purposes only. So Congress excluded drugs prescribed primarily for this purpose, a statutory regulation that remains in effect today.

There are circumstances, however, where a Part D drug plan will cover these drugs. For that to occur, the medication must have FDA approval to treat a specifically designated medical condition. Examples include:

• Ozempic (semaglutide) may only be covered if prescribed for the treatment of obesity caused by Type II diabetes. 

• Wegovy (semaglutide) has FDA approval as a first line treatment for cardiovascular disease and to prevent heart attack and stroke. 

• Zepbound (tirzpatide) has FDA approval to treat obstructive sleep apnea.

• Mounjaro (tirzpatide) is approved only for patients with a diagnosis of Type II diabetes.

Ways to Secure Approval 

Because Lucy was prescribed Wegovy for the treatment of heart disease, we guided her in working with her physician to secure approval under her Part D drug plan. 

To do so, a drug needs to be approved by the FDA and the individual needs to meet the criteria for coverage. The drug must also be on the formulary of the specific plan in question. Fortunately, these things were all true in Lucy’s case. 

From there we…

• Reviewed the Evidence of Coverage (EOC) document

• Investigated if the plan requires prior-authorization, step therapy, and/or has quantity limits

• Instructed Lucy to work with her physician’s office surrounding the requirements and asked that they initiate the process and supply the required documentation to request approval for coverage

Had the drug not been on the formulary, we would have suggested Lucy work with her physician’s office to submit a “formulary exception” — a request to the Part D insurer to provide coverage. (Review your drug plan’s web site or call customer service to learn what is required to get the formulary exception process started.)

Note that if a formulary exception is granted, you may pay a higher retail price than for covered drugs in the same tier and your costs do not apply towards the annual $2,000 out of pocket cap on your prescription drugs costs. 

Are Compounded Drugs an Option?

Many individuals, of course, have no Part D covered medical conditions but have a desire to lose weight. As the retail cost of these drugs is more than $1,000 a month, many ask whether it is okay to buy a much less expensive “compounded” version of the prescription?

As with many coverage-related questions, the answer is complicated…

• Compounded drugs are not regulated by the FDA and are not tested for safety, effectiveness, or quality. Medicare Part D drug plans will only cover compounded drugs if at least one of the ingredients of the compounded version of the drug is listed on the drug plan’s formulary.

• Compounded drugs can be legally substituted for brand name weight loss drugs in the United States when there is a verified shortage of the drug’s ingredients. Once that shortage is rectified, those who have relied on compounded versions of their weight loss drug may no longer have access to the medication.

• The FDA receives many reports of adverse events related to the unregulated use of both compounded and “imposter drugs.” Even when the drug itself is deemed safe and prepared by a licensed compounding pharmacy, dosing errors for self-injected drugs are common. 

• Part D prescription drug plans can add and delete drugs from their formulary at any time. One representative from Medicare told us changes to a plan’s formulary happen as often as every two weeks! Therefore, it is important you keep abreast of both changes to your drug plan’s policies and changes to FDA approvals and regulations.

Both Good and Bad

There is little doubt that there are considerable benefits in mitigating the epidemic of obesity in this country. From a public health perspective, weight loss drugs, when prescribed and used properly, can be an invaluable tool.

However, the potential budget ramifications to both Medicare and Medicaid are concerning — there is a need for a visionary approach to incorporating these powerful drugs into mainstream medicine. With planning and the recent call for Medicare to negotiate prescription drug prices with manufacturers, perhaps weight loss drugs will soon become affordable and more accessible. “Lucy” is counting on keeping her resolution this time.