A Changing Regulatory And Reimbursement Landscape For Weight-Loss Drugs – Healthcare

Prescriptions for a new class of drugs to treat obesity surged
exponentially in 2023. Originally approved for treatment of type 2
diabetes, glucagon-like peptide-1 receptor agonist drugs (GLP-1s)
such as Wegovy, Zepbound, Ozempic, and Mounjaro have been a popular
choice for obesity treatment and general weight loss despite the
drugs’ significant price tags and limited insurance
coverage.¹ Wegovy, Saxenda,
and Zepbound are GLP-1s approved by the US Food and Drug
Administration (FDA) for chronic weight management in
adults,² but others, like
Ozempic, are being prescribed off-label³ for weight loss.

Some estimates project that sales of GLP-1s will exceed $100
billion by 2030.⁴
Weight-loss-medication prescribers (Prescribers), including
telehealth platforms, and pharmacies should stay abreast of new and
ongoing regulatory scrutiny and the changing regulatory and payor
landscape of weight-loss-related prescribing. Below are some key
focus areas for Prescribers and pharmacies to consider.

State Prescribing Standards for Obesity Medication

Some states impose requirements specific to prescribing
weight-loss medication. Examples of these requirements are set
forth below.

Florida

Florida law restricts the prescribing of anti-obesity drugs
unless, among other things: (1) the patient meets a certain body
mass index (BMI) threshold (e.g., 30); (2) the patient’s
informed consent is documented in the medical record; and (3)
follow-up care is provided at least once every three months.⁵

New Jersey

New Jersey law requires that in order to write a
weight-loss-medication prescription, a Prescriber must: (1) take a
complete patient history, conduct a comprehensive physical
examination, and order or perform required laboratory and
diagnostic tests; (2) assess the possible existence of psychiatric
or psychological conditions, which must be evaluated and treated
prior to or contemporaneous with the prescription of medications;
(3) provide recommendations for nutritional counseling, behavior
modification, and exercise; (4) monitor the patient’s progress
at each follow-up visit (and document all of the above); and (5)
obtain informed consent and identify the risks associated with such
medications for the patient.⁶

Virginia

The Virginia Board of Medicine imposes strict requirements on
Prescribers, including: (1) performing a physical examination and
reviewing lab results; (2) prescribing and recording a diet and
exercise program; and (3) providing follow-up care within 30 days
of initiating treatment and subsequently thereafter.⁷

Prescribers should ensure they meet applicable state laws’
prescribing requirements when prescribing GLP-1s to their patients.
Failure to comply with these requirements could result in
discipline from licensing boards, including civil penalties and
suspension or revocation of the Prescriber’s professional
license.

State-Level Telehealth Prescribing Requirements

States also have varying telehealth standards that dictate,
among other things, the types of providers who may prescribe
through telehealth and the permissible modalities or telehealth
technologies (e.g., synchronous or asynchronous) that may be used
to physically examine the patient and establish a patient-physician
relationship as a prerequisite for prescribing medications.

In May 2023, the Mississippi State Board of Medical Licensure
suspended a physician’s license for three months for
prescribing Ozempic through an instant-messaging telehealth
platform with no audio or video modalities. The board found that
the physician (i) engaged in unprofessional conduct; (ii) failed to
establish a valid physician-patient relationship; and (iii) used a
questionnaire in lieu of a physical examination.⁸

As weight-loss-related prescribing trends upward, state
regulators are likely to continue to rely on these laws to
discipline Prescribers who use telehealth platforms in a manner
that does not comply with applicable state law requirements.

Payor Coverage Requirements for GLP-1s

As third-party-payor coverage for GLP-1s broadens, Prescribers
will have to be mindful of third-party payors’ prior
authorization requirements and coverage policies. For example, to
obtain coverage of certain GLP-1s for chronic weight management,
Blue Cross Blue Shield of Massachusetts imposes several
requirements, including certain BMI benchmarks and documentation
that the patient will use the medication as an adjunct to a
comprehensive weight management plan that includes a
reduced-calorie diet, increased physical activity, and behavioral
modifications.⁹

Payor and State Limitations on Off-Label Prescribing of
GLP-1s

In June 2023, the Washington Post reported Anthem Blue Cross Blue Shield plans
sent approximately 150 letters to Prescribers in three states
warning them about prescribing Ozempic to non-diabetic patients.
The letter indicated 60% of patients prescribed Ozempic lacked
“sufficient evidence” of diabetes and that Anthem would
refer “suspected inappropriate or fraudulent activity … to
the state licensure board, federal and/or state law
enforcement.”

Payor coverage of GLP-1s is often restricted to
“on-label” use, so any representation that a patient
meets the criteria for on-label use, if untrue or unsupported,
exposes the Prescriber to potential claims of insurance fraud,
which can lead to civil and/or criminal penalties. Further, state
professional boards can discipline Prescribers for prescribing
unsuitable medications and/or inappropriate quantities of such
medications.¹⁰ The
applicable board would generally have to find that the decision to
prescribe a GLP-1 for off-label use for weight loss falls below the
applicable standard of care — a high bar.

In addition, on August 29, 2023, the Mississippi Board of
Medical Licensure expressly prohibited the off-label use of GLP-1s
solely for weight loss based upon information it received from the
FDA and the Mississippi Board of Pharmacy.¹¹ Accordingly, Prescribers should
follow emerging clinical research on the use of GLP-1s and track
guidance issued by state licensing boards and professional
associations. Compounding pharmacies should ensure they are
complying with applicable requirements. State laws limited to
restricting off-label use are unlikely to face challenges asserting
that they are preempted by federal law, but the analysis may differ
to the extent states go further to prohibit uses related to weight
loss that the FDA has specifically approved for certain
products.

FDA and State Limitations on Compounding GLP-1s

The increased prescribing and compounding of GLP-1s has piqued
state medical and pharmacy boards’ and the FDA’s interest.
For example, the Alabama Board of Medical Examiners & Medical
Licensure Commission (the Alabama Medical Board) issued guidance
stating that some physician offices in Alabama were improperly
compounding GLP-1s (aka semaglutides).¹² The Alabama Medical Board
stated: “even when compounding of a semaglutide drug product
is allowable under the Food, Drug, and Cosmetic Act, the use of
semaglutide salts, the use of any non-pharmaceutical grade active
pharmaceutical ingredient (API), or one not produced by an
FDA-registered establishment, is prohibited.”¹³

The Alabama Medical Board’s guidance was published in the
wake of FDA communications in 2023 to the National Association of
Boards of Pharmacy and Federation of State Medical Boards
clarifying that FDA-approved drugs Wegovy and Ozempic continued to
be listed on the FDA’s drug shortage website and that
“compounded drugs can be made and distributed with fewer
restrictions when the drug appears on the FDA’s drug shortage
list.”¹⁴ Similarly, in
May 2023, the FDA published an alert warning healthcare providers
and patients that compounding pharmacies may be using salt forms of
semaglutide and that the FDA is not aware of any such compounding
that would meet federal requirements.¹⁵

Counterfeit GLP-1s

The FDA has been stepping up its investigation into counterfeit
Ozempic. In December 2023, the FDA announced it had found
counterfeit Ozempic in the legitimate US drug supply chain
and seized thousands of units of the product.¹⁶ In addition, the agency found
the needles from seized product were also counterfeit, as well as
the pen label, accompanying health care professional and patient
information, and carton. The FDA has advised that retail pharmacies
should purchase authentic Ozempic only through authorized
distributors of Novo Nordisk and review available information and
photographs to confirm the legitimacy of their shipments. Further,
patients should obtain Ozempic only with a valid prescription
filled by pharmacies licensed by the state and check the product
for signs of counterfeiting before use.¹⁷

Conclusion

The use of GLP-1s for chronic weight management has proven to be
a significant medical development that will have a material impact
on US obesity care and weight management for years to come;
however, as GLP-1s become more widely accessible, there has been an
increased focus by federal and state regulators and payors.
Therefore, Prescribers, telehealth platforms, compounding
pharmacies, and retail pharmacies should be mindful of the evolving
regulatory framework and develop policies that help ensure
prescribing, compounding, and dispensing practices (as applicable)
adhere to applicable federal, state, and third-party-payor
requirements.

Footnotes

¹ A similar
glucose-lowering therapy is sodium-glucose cotransporter 2
inhibitors (SGLT2s). SGLT2s have not been approved by the FDA for
weight loss, but Jardiance is being prescribed off-label for
individuals who want to lose weight.

² FDA, “FDA Approves New Drug Treatment for Chronic Weight
Management, First Since 2014” (June 4, 2021).

³ Off-label prescribing prefers
to the prescribing of a drug for a different purpose than that for
which it was approved by the FDA.

⁴ JP Morgan, “
The increase in appetite for obesity drugs” (Nov. 29,
2023).

⁵ Fla. Admin. Code Ann. R. 64B8-9.012; N.J.A.C. 13:35-7.5A.

⁶ NJAC 13:35-7.5A.

⁷ 18 VAC 85-20-90. This law applies to all
prescriptions of controlled substances, Schedules III through VI.
Schedule VI includes all drugs requiring a prescription that are
not otherwise included in Schedules I through V, which would
include GPL-1s. See Va. Code Ann. § 54.1-3455.

⁸ Mississippi State Board of
Medical Licensure, “In the Matter of the License of: Laura Purdy,
M.D.” (May 18, 2023).

⁹ Blue Cross Blue Shield of
Massachusetts, “Pharmacy Medical Policy: Drugs for Weight Loss #
572” (last updated September 2023).

¹⁰ Tennessee Office of the
Attorney General, Opinion # 21-19: Disciplinary Proceedings Against
Physicians Who Prescribe Medications “Off-Label” for
COVID-19 (Dec. 30, 2021); Tex. Occ. Code Ann. § 164.053(a)(5).

¹¹ Mississippi State Board of
Medical Licensure, Guidance Regarding Semaglutide-Based
Medications (Aug. 29, 2023); 30 Code Miss. R. Pt. 2640, R.
1.5(f).

¹² Alabama Board of Medical
Examiners & Medical Licensure Commission, “Press Release: Concerns with Semaglutide and Other
GLP-1 Receptor Agonists” (last accessed Feb. 14,
2024).

¹³ Id.

¹⁴ FDA, “Letter to National Association of Boards of
Pharmacy Re: Compounding Drugs on FDA’s Drug Shortages
List” (Apr. 27, 2023); FDA, “Letter to National Association of Boards of
Pharmacy re: Compounded Drug Products Containing Semaglutide
Salts (Oct. 10, 2023); FDA, “Letter to Federation of State Medical
Boards” (Oct. 10, 2023).

¹⁵ FDA, “Postmarket Drug
Safety Information for Patients and Providers: Medications
Containing Semaglutide Marketed for Type 2 Diabetes or Weight
Loss” (last accessed Feb. 14, 2024).

¹⁶ FDA, “FDA Warns
Consumers Not to Use Counterfeit Ozempic (Semaglutide) Found in
U.S. Drug Supply Chain” (last accessed Feb. 28, 2024).

¹⁷ Id.