A new USC Schaeffer Center white paper finds expanded access to anti-obesity medications would lead to significant increases in life expectancy and disease-free years while generating a substantial societal return on investment, even after accounting for treatment costs.
More than 4 in 10 U.S. adults have obesity, which is linked to increased risk of over 200 diseases - including heart disease, diabetes, cancer and dementia - and costs society $260 billion annually to treat. Highly effective new anti-obesity medications can be a powerful tool against chronic disease, but fewer than one-third of health insurers cover them amid concerns about upfront costs.
Expanding access to anti-obesity medications for all adults without diabetes who qualify would generate $10 trillion in social value by enabling people to live longer and healthier lives, Schaeffer Center researchers found. Further, the investment in expanded access would yield returns to society exceeding 13% annually, which is comparable to returns on early childhood education for disadvantaged children and nearly double the U.S. stock market's returns this century - investments widely regarded as valuable.
While the costs of anti-obesity medications have grabbed headlines, our analysis shows why it's important to consider the lifetime value of treatment. Expanding access will prevent or delay obesity-related comorbidities, resulting in improved quality and quantity of life for many Americans."
Alison Sexton Ward, research scientist at the Schaeffer Center and co-author of the study
The analysis comes as federal officials consider a proposal to expand Medicare and Medicaid coverage of anti-obesity medications - a move that, if adopted, could also encourage broader coverage among private insurers. The new study builds on a widely cited 2023 Schaeffer Center white paper that found Medicare coverage of these medications could result in as much as $175 billion in cost offsets to the program over the next decade by reducing demand for care.
Expanded access generates value for more than just the sickest patients
Schaeffer Center researchers leveraged an economic-demographic microsimulation model known as the Future Adult Model to project the lifetime trajectories of health, medical spending, treatment costs and other economic outcomes for adults 25 and older without diabetes who qualify for anti-obesity medication under clinical guidelines. These findings were broken down by age group, body mass index (BMI) and risk of developing diabetes.
Although branded competition typically pushes down net prices of high-cost drugs even before cheaper generics arrive, the researchers conservatively assumed the net price of anti-obesity medication would remain constant before declining substantially when expected generic competition begins in 2032. The net price, which includes rebates and negotiated discounts, is estimated at about 55-65% below the list price and is consistent with net price estimates used by the Congressional Budget Office.
Younger and healthier adults who qualify for the medications were found to benefit the most from expanded access, though all age groups would have longer lives and less time with diabetes. As many as 1.8 years would be added to the lives of adults starting treatment at ages 25 to 34, while they would have as much as 5.9 additional years without diabetes.
Researchers determined the social value of expanding access by weighing the value of longer, healthier lives and savings from reduced medical costs against treatment costs.
Because of the years gained in better health, the greatest social value comes from treating younger and heathier adults. For instance, treating a 25-year-old with low immediate risk of developing diabetes on average generates nearly 30% higher lifetime social value than treating a 35-year-old with similar risk.
"Insurers often limit coverage of anti-obesity medications to sicker patients, such as those with prediabetes or diabetes, but our analysis shows they are likely missing out on a chance to prevent worse and more costly outcomes through early treatment," said co-author Darius Lakdawalla, chief scientific officer at the Schaeffer Center and professor at the USC Mann School of Pharmacy and Pharmaceutical Sciences and the USC Price School of Public Policy.
It's not just younger and healthier people. The lifetime net social value is positive for nearly every group the researchers analyzed.
Strong investment returns found across populations
Researchers also estimated the annual return to society for each dollar invested in expanding access to anti-obesity medication, reflecting the long-term health and economic benefits of such treatments.
Expanding access would broadly generate compelling rates of return across different groups of patients. This measurement, known as the internal rate of return (IRR), exceeded 13% for all subgroups with obesity (BMI of 30 or higher) over a 30-year period.
"Expanding access to anti-obesity medication is probably the single most effective policy to improve Americans' public health," said co-author Dana Goldman, co-director of the Schaeffer Center and founding director of the USC Schaeffer Institute for Public Policy & Government Service. "The challenge will be to do it in a way that rewards innovators but keeps the public costs low."
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