GLP-1s Are Crazy Effective — Just Not Cost-Effective

This transcript has been edited for clarity. 

Welcome to Impact Factor, your weekly dose of commentary on a new medical study. I’m Dr F. Perry Wilson from the Yale School of Medicine.

Much of my time in these videos is spent talking about whether a drug or supplement or diet or intervention works or not. That’s the central focus of medical science: Can we do something for a patient and make a difference in their health? But there’s a related question that we rarely discuss that is almost equally as important: Is this drug or supplement or diet or intervention worth it?

And I don’t mean “worth it” in some meta-physical sense. I mean "worth it" in terms of dollars and cents. Is the cost we pay for something worth the benefit we derive from it?

I’ll make the argument that the most effective drugs in the past decade are the GLP-1 receptor agonists, drugs like semaglutide and tirzepatide. At least in terms of weight loss, they are truly unparalleled. They are clearly effective. But are they worth it? Are they cost-effective? That is a much harder question, and, as you’ll see in a minute, despite their amazing effects, the answer — for now, at least — is no.

How do we decide if a drug is cost-effective? What does that even mean? I’ll give you some extreme examples to illustrate the point a bit. First, for it even to be possible that a drug is cost-effective, it must be effective. It must improve health in some clear, measurable way. Pink jelly beans, while quite inexpensive, do not improve health at all and are therefore not cost-effective. Policymakers should not advocate that insurers cover pink jelly beans.

On the flip side are drugs and interventions that actually make money for the system — things that are so good for you, they save money in the long term. The childhood vaccination program is probably the best example of this. The CDC estimates that for every $1 spent on the program, the payer saves about $3 in future costs and society saves about $10 in future costs. This is why insurers have no problem covering childhood vaccines; they would literally be leaving money on the table if they didn’t.

So those are the extremes. Don’t pay for pink jelly beans, do pay for vaccines. But we don’t think it is appropriate to cover only stuff that saves money. We are willing to trade money for longer life or quality of life. And this is where the rubber meets the road when it comes to cost-effectiveness analysis: How much is your life worth?

To an economist, the answer is basically $100,000 per year of perfect health. The ways they arrive at this number are pretty fascinating, but a lot of it is done by looking at what we as a society are willing to pay for. A cost of $100,000 per “quality-adjusted life year” (QALY) is our standard candle here. More than that is not particularly cost-effective. Less than that is. The “quality” in the QALY is important too. Economists know that a year of perfect health is worth more, in dollar terms, than a year of moderate or poor health. 

So, if we take an intervention and do some clever modeling based on the price of the intervention and its effectiveness at improving health, we can tell you how much it costs per QALY. Here are a few examples.

We have an intervention to pay people to quit smoking. This costs about $2500 per QALY. Seems pretty good.

Statin therapy for older individuals? $33,000 per QALY. Still cost-effective but not as much, in part because it’s harder to add life years when you start treatment toward the end of life.

Viagra for erectile dysfunction? $12,000 per QALY. No, it’s not saving lives, but if it improves quality of life, well, it can be cost-effective.

Yearly prostate cancer screening in men? $320,000 per QALY. Not cost-effective, according to most economic models. 

The utility of this stuff is that it allows policymakers, and us, to compare one set of policy interventions with another. Assuming we don’t have infinite dollars to spend on healthcare (an assumption that, while true, is lost on many in government), we should allocate what dollars we do have to the things that are the most cost-effective. 

So what about these new weight loss drugs? Are they worth it? That’s the question posed by this paper, “Lifetime Health Effects and Cost-Effectiveness of Tirzepatide and Semaglutide in US Adults,” appearing in JAMA Health forum. And as I said the answer, for now at least, is no.

The authors used data from the National Health and Nutrition Examination Survey (NHANES). This is an ongoing government-sponsored, population-based study that is the source of a ton of data that estimates the prevalence of disease in the US population.

Using that data, the authors first asked: How many adults in the United States are eligible to be treated with these drugs? Their definition of eligible here was that the individuals had to be overweight or obese and suffer from at least one weight-associated comorbidity (like diabetes or hypertension). The answer? 126 million people. This is about 50% of all the adults in the United States. A huge number.

The authors modeled what would happen if these individuals started taking these drugs. Under their base assumptions, they acknowledged that a percentage would stop taking them due to side effects (these numbers are known from the trials of the drugs and are a bit below 10%) and the rest would continue taking them for life. 

Before we get to cost-effective, let’s talk effective. If you were to treat 100,000 people with these drugs, over a lifetime you’d have a dramatic reduction in obesity. You can see here about 45,000 fewer cases of obesity for tirzepatide and 32,000 for semaglutide. The authors also examined the effect of two other weight-loss agents — the less effective naltrexone-bupropion combo known as Contrave and the combo drug phentermine-topiramate known as Qsymia. The latter two are not nearly as effective as the GLP-1 drugs.

Here are the data for diabetes. If you treated 100,000 people with these drugs, you’d avert somewhere between 21,000 cases of diabetes (for tirzepatide) and 8000 for the phentermine pill. 

The heart disease data are similar, showing a fair number of averted cases with the GLP-1 drugs. 

Put in terms of life years gained, treating 100,000 people with tirzepatide (for their lifetime, of course) would lead to a gain of nearly 50,000 life years.

All of this is to say that we have a good signal of effectiveness across these drugs, with the GLP-1s, and tirzepatide in particular, at the top.

But… it’ll cost you.

The authors modeled the cost of the drugs, the cost of medical care for people taking the drugs, even the cost of lifestyle modification alone (gym memberships aren’t free). Over the lifetime of a given individual, the total cost of a policy of using lifestyle interventions to treat overweight and obesity would be $244,000. A policy of lifestyle interventions plus tirzepatide? $313,000 dollars. Sure, the cost of medical care is lower with the tirzepatide strategy; those averted cases of heart disease and diabetes save money — about $30,000 per person over their lifetime. But the cost of the drug itself adds up. At current prices (about $1000 a month), we’re talking $111,000 dollars per person. 

Now that we have a measure of the effectiveness of the drugs and a measure of the cost, we can do some division and calculate the cost per QALY gained. And here’s what you see.

For tirzepatide, the most effective of the drugs, about $200,000 per quality-adjusted life year. For semaglutide? $470,000 per QALY (since it’s less effective and similarly priced). The older, less used drugs are remarkably more cost-effective: $85,000 for the phentermine drug, and Contrave actually saves money. Society saves $2500 per QALY for using this drug, even though it doesn’t work as well as the pricier stuff.

Does that mean we should abandon these amazingly effective agents? Definitely not. I love a drug that works, and these drugs work. They’re just, quite simply, too expensive. If we want to bring them down below the $100,000 per QALY threshold for cost-effective treatments, the price of tirzepatide needs to decrease by 30%, and the price of semaglutide by 82%. Honestly, I suspect Lilly and Novo would do fine at these price points, but what do I know? I’m not an economist.

Prices for GLP-1 drugs will come down in the future, of course. Generic competition will happen — for semaglutide, around 2032; and for tirzepatide, later in that decade. I know — that seems like a lifetime away. 

Speaking of lifetime, it’s possible that you might still get benefit from these drugs by taking them for shorter intervals, perhaps using them to get to a goal weight, and then focusing on lifestyle to save money in the long term. The authors don’t model this strategy.

The people really looking at papers like these will be payers, though. And, given these results, they will likely not embrace broad coverage of GLP-1 drugs as a method of saving their long-term costs. They may, of course, answer to the demands of their consumers. 

For now, I wish you all many happy and fulfilling quality-adjusted life years in the future.

F. Perry Wilson, MD, MSCE, is an associate professor of medicine and public health and director of Yale’s Clinical and Translational Research Accelerator. His science communication work can be found in the Huffington Post, on NPR, and here on Medscape. He posts at @fperrywilsonand his book, How Medicine Works and When It Doesn’t, is available now.