Wegovy just became more cost effective (for a subset of patients without diabetes).

We know that the blockbuster drug Ozempic (and Wegovy and semaglutide-based drugs) helps patients lose weight, control their diabetes (thereby lowering rates of serious complications like strokes) and even prevent heart failure exacerbations.

The big question is whether Ozempic is cost effective. Remember: medicine is part economics. Imagine a drug that cured strokes, but cost $1 billion per dose. Obviously, we just couldn’t afford to make that treatment standard.

Where are we on Ozempic? Recently, some experts concluded that for patients without diabetes, the costs are currently too high. For the return on investment to be favorable, they said, the price of Ozempic would have to drop to around half the current sticker price ($13,618 per year) to meet the threshold that makes it “worth it to the system.”

My read on that analysis was that it had not incorporated emerging evidence and that it was already out-of-date when it came out. In fact, the authors hedged on this point, saying that things could easily change. They already have.

New data show Ozempic helped save lives in patients without diabetes.

A new study published in the New England Journal of Medicine may already be enough to flip the economists’ conclusions for at least some people without diabetes—middle-aged and older adults with a history of cardiovascular disease, in particular. Given the new data, Ozempic might now be cost effective for this subset, even without a drop in the eye-popping sticker price. At a minimum, the estimate on how much cheaper Ozempic needs to be to make it “worth it” might need to be modified. It might be that only a modest price reduction is needed. Let’s take a deeper dive.

The new study randomized 16,000 patients ages 45 and older without diabetes but with a history of cardiovascular disease, and a body mass index of 27 or greater (overweight or obesity) to receive either Ozempic injections once per week or placebo (and standard of care) for two years.

The details:

• 16,000 patients, ages 45 and older

• No history of diabetes (laboratory confirmed)

• History of cardiovascular disease (prior heart attack or stroke)

• Body Mass Index of 27 or above (overweight or obesity)

• Blinded randomization. Half received weekly Ozempic injections, half received placebo injections

• Patient outcomes were tracked for 4 years.

• Primary outcome of the study: a composite; death from a heart condition, non-fatal heart attack, or non-fatal stroke

The trial succeeded. Fewer patients in the Ozempic arm had a “primary outcome event.” Think about that. Supposedly this is a diabetes and weight loss drug. Now it’s reducing some deaths, heart attacks, and strokes? This drug continues to do what so many hyped up drugs failed to do: deliver meaningful results on outcomes that really matter. No drug is harm free—but these ones are truly looking like game-changers for an increasingly population “demoninator.”

Now, there’s a whole genre of research criticism that dunks on composite outcomes like the ones on this study—and I am sympathetic to that stance. After all, why treat death and a non-fatal heart attack as equally bad? And why not just study these important outcomes one at a time? The answer is that the number of “bad events” in a limited time may be too low for any one of them to be statistically significant, even in a large study. So investigators lump these events together, hoping that they’ll get a statistical decrease in the composite outcome.

But I always look at the data for the individual components of the composite outcome and other key outcomes too. The implications differ case to case, but in this instance I like what I am seeing.

One important outcome to assess is all-cause mortality. Many studies divide mortality based on why clinicians thought a person died. But in reality, it’s not always cut-and-dry. Interestingly, in this study, for deaths caused by cardiovascular disease, a lower rate among Ozempic recipients did not reach statistical significance. But the decrease in all-cause deaths among Ozempic recipients was statistically significant! And the gap between the Ozempic and placebo recipients widened quite dramatically later in the study—which comports with a therapy like Ozempic, whose effects are anticipated to take time to emerge. In the final 12 months of the study, around 2.25% of the placebo group died from any cause, compared to 1.25% among the Ozempic group. That 1% absolute decrease (but a 50% relative one) corresponded to around 88 fewer deaths in the Ozempic group in just that short period.

The percent of trial participants who died from any cause during the study. The top line is placebo recipients (who had a higher death rate, especially later in the study) while the lower line is Ozempic recipients. New England Journal of Medicine (Shading added here for emphasis).

Let’s now look at the cost of Ozempic in that final year of the study. At $13,618 per year (the current estimate in the US), the 8,800 Ozempic recipients would have cost the healthcare system nearly $120 million in drug spending. That sounds like a lot. But it also means that each averted death in the Ozempic group “cost” around $1.36 million that year.

Does that alone make this all “worth it”? That depends on who you ask. Generally, a healthcare system’s willingness to pay for a therapy is pegged to certain benchmarks. Some systems are willing to pay $1-10 million in healthcare costs to save a single life. However, the calculations change depending on the age of the person whose life was saved (a fact that is both ageist and economically sensible; again, systems might be willing to spend $10 million on a therapy that saves a young child, but not an ailing 98-year-old ).

So, many analysts look at the cost of a therapy per year of life saved. Since the average age of participants in this study was 61, we can say that the average person in the study had around 18-20 years of life remaining (based on CDC life charts). Let’s assume the average person in the study actually had somewhere between 12-17 years of life left, since it indeed was a group with above average risks. That means that in the final year of the study, the spending would come out to around $80,000-$114,000 to save a single year of life.

Is that worth it? Probably. The analysts who looked at this question before this study presented four possible “thresholds” of annual costs at which US systems might be willing to pay to save a year of life: $50,000, $100,000, $150,000, $200,000. So, in the last year of this new study, Ozempic landed closer to the lower end of the proposed benchmarks. And from there, we could further deduct medical savings from decreases in the non-fatal outcomes (strokes, heart attacks, new diabetes diagnoses, new end-stage kidney disease diagnoses).

The big caveat here is that the benefits of Ozempic really started piling up in the last year of this 4-year study. That means that the retail price of Ozempic that would have been spent during the entire study period (if the drugs had not been provided for free) would have been a whopping $480 million. Running the math like we did above, that would imply that it cost around $5.8 million to save a single life during the 4-year study and $290,000-$480,000 per year of life saved. That’s still in the $1-10 million range for a life saved (favorable-ish), but above the proposed upper cutoffs for costs to save one year of life (unfavorable).

So, the big questions:

1. Would the findings in the last year have continued if the study had kept going?

2. How long would those findings have persisted if everyone stopped taking Ozempic at the end of the study?

The answer to the first question is likely to be yes. The question is for how long? If we think of the first 3 years as a “downpayment,” it would be very important to see that the fruits of the investment continue for more than just that one year (where things looked really good for Ozempic’s mortality benefit). How long the difference persists would be very important information (I don’t know if the patients are still being followed; I’ll try to find out). As for the second question, surely it would take 3-6 months (maybe longer) before the rates of bad outcomes in each group would become similar. That means that the “shadow” of the Ozempic impact would effectively lower the price for each saved life (or year of life) for some period of time, because those mortality decreases would come at no additional cost. Eventually, the cost-benefit analysis might also improve if we learn that after a couple of years of weekly injections, patients only need to be on these drug a few months each year. (If that has been studied, I have not seen the results. I think “drug holidays” where patients stop taking Ozempic for months at a time are going to be a “thing” that gets studied in the future. Watch for this. It has major implications.)

Bottom line: Ozempic is probably cost-effective for some populations. But lowering the price would obviously help.

All told, to me, it looks like Ozempic lands squarely within the zone of a therapy that wealthy economies should in fact be willing to cover for patients like the ones in this study—that is, those with BMI of 27 or higher without diabetes but with a history of cardiovascular disease. Whether the benefit will extend to other populations remains unknown. I suspect we are still just starting to uncover the downstream benefits. A recent study found that Ozempic lowers the need for dialysis. The news sent dialysis stock tumbling.

That all said, it wouldn’t hurt if the price of Ozempic came down just a bit. In fact, lowering the price tag might make governments in wealthy economies more likely to cover the drug, thereby increasing overall revenues. I’m sure the drug companies will figure that one out soon enough!