Cigna Strikes Deals To Limit Cost of Weight-Loss Drugs

Cigna Group (CI) said it has taken steps to control the cost and increase coverage of diabetes and weight-loss medicines, which have experienced a boom in demand by those looking to shed pounds.

The insurance provider announced Thursday that its Express Scripts by Evernorth pharmacy benefits unit has struck deals with Novo Nordisk AS (NVO) and Eli Lilly & Co. (LLY) to cap how much health insurance plans have to pay for the treatments.

A Cigna spokesperson told CNBC that the agreements will limit increases for the class of drugs, known as GLP-1s, to 15% a year.  

GLP-1s initially were designed to reduce A1C levels in diabetics, but it was later found they also help patients lose weight. That discovery led to soaring demand for GLP-1s, including Novo Nordisk’s Ozempic and Wegovy, and Lilly’s Zepbound. However, the price of the once-weekly injections can run more than $1,000 per month, making insurance companies hesitant to cover them as more and more prescriptions were being written for their use in weight control.

Cigna explained that this move allows companies and health plans “to better manage GLP-1 spend, which will help ensure access for appropriate patients.” It called the plan “the industry’s first financial guarantee for GLP-1s.”

The news came during Cigna’s Investor Day, during which the company also raised the high end of its long-term annual adjusted earnings per share (EPS) growth target to a range of 10% to 14% from 10% to 13%. It reaffirmed its 2024 adjusted EPS outlook of at least $28.25.

American depositary receipts (ADRs) of Novo Nordisk soared 9% to $136.12 at 1:41 p.m. ET Thursday, and shares of Lilly and Cigna also gained. All three have risen year-to-date in 2024.