Insights

After the confirmation process of former Congressman Dr. Dave Weldon to head the Center for Disease Control and Prevention (CDC) abruptly halted on March, various names were floated to be the new nominee, including former Congressman Dr. Michael Burgess.  The White House announced their new nominee on March 24 is Susan Monarez, PhD.  Who is she?   

Since January, Dr. Monarez has been the acting head of the CDC.  She was brought over to the CDC from ARPA-H, where she has been the Deputy Director since January 2023.  She has a long history in the government, serving under both Democratic and Republican administrations at Health and Human Services (HHS), Homeland Security, the White House (Obama and Trump administrations), and Health Resources and Services Administration (HRSA). Prior to government service, Monarez was a postdoctoral fellow and graduate student, respectively, at Stanford University School of Medicine and the University of Wisconsin – Madison, where she focused on technology development to prevent, diagnose, and treat infectious diseases particularly impacting people living in low- and middle-income countries.  

There are a few interesting facets of her nomination: 

First, she will be the first person ever confirmed by the Senate to run the CDC.  Prior to 2022, CDC directors were appointed; but Congress passed a law that year saying any future CDC heads would be confirmed by the Senate.  Second, if she is confirmed, she will be the first non-medical doctor to run the CDC since 1953.  Prior CDC heads were M.D.s – Dr. Monarez is a Ph.D., not an M.D.  

A key difference between Dr. Monarez and the previous CDC nominee Dave Weldon is her support for vaccines.  In her work at ARPA-H, Dr. Monarez has strongly supported APECx which is an initiative to use artificial intelligence to design antigens that target entire viral families. (She has spoken at public conferences in favor of the program.)  ARPA-H argues the studied viruses (like herpesviruses and flaviviruses, such as Zika and dengue fever) pose serious threats to global health, causing pandemics, cancers, and chronic illnesses.   

Anti-vax groups are concerned about her support for vaccines, but that support will certainly help her nomination chances in the physician-heavy Senate Finance Committee.   

Dr. Monarez is also a strong proponent of the use of AI in health care.  In her career, she has focused on understanding challenges within the health ecosystem and identifying opportunities for innovation to address them through AI, technology, and innovation.   

Critics argue that her extensive background within the federal health bureaucracy and a heavy focus on technology-driven biosecurity suggests a continuation of the status quo rather than the long-overdue “Make America Health Again” reform.  

Thus far, the announcement of her nomination has been well-received, with very little push back.  We do expect her to field pointed questions from Senators regarding CDC actions over the past few weeks, including the cancelling of CDC grant funding and the delayed meeting of vaccine advisors (including for formulating strains for the flu vaccine for the 2025-2026 flu season).  We will continue to watch what happens as her vetting continues.   

Introduction  

GLP-1 medications have emerged as powerful tools for managing both diabetes and weight loss. High costs and inconsistent insurance coverage have raised concerns about barriers for patients who could benefit. The central issue now is whether Medicaid and Medicare should expand coverage for GLP-1 drugs used for weight loss? 

The High Cost of GLP-1 Drugs 

GLP-1 medications, such as Ozempic and Wegovy, come with steep list price tags—often exceeding $1,000 per month. Pharmaceutical industry critics, such as Senate Health, Education, Labor, and Pensions (HELP) ranking member Bernie Sanders (I-VT) have expressed concerns about the cost of these drugs. There have also been concerns about the lack of generic GLP-1 drugs, although the Food and Drug Administration did approve two generic GLP-1 drugs at the end of 2024. As more patients seek these medications for weight loss and diabetes management, the financial burden on both private insurers and government programs is growing. Drug manufacturers argue that these prices reflect years of research and development, and that list prices do not take into account the availability of coupons offered by manufacturers and other organizations. However, many health care professionals and advocates push for regulatory measures to curb costs and promote affordability. 

Medicare Dilemma: Coverage for Diabetes but Not Weight Loss 

A major challenge in expanding access to GLP-1 medications is Medicare’s restrictive coverage of GLP-1 drugs. Medicare Part D covers GLP-1 drugs when prescribed for diabetes management but does not extend coverage for weight loss treatment. This distinction creates a  gap for patients who could benefit from these drugs for obesity-related health issues. 

For example, Ozempic and Wegovy contain the same active ingredient, semaglutide, yet they have different coverage statuses under Medicare. Ozempic is covered for diabetes treatment, while Wegovy is covered for patients with life-threatening cardiovascular conditions related to obesity. However, Medicare does not cover these medications solely for weight loss or management. Those who support expanding GLP-1 access argue that this policy limits patient access and raises questions about the fairness of Medicare’s coverage of these drugs. Expanding Medicare coverage for weight loss drugs would come at a high price. The Congressional Budget Office (CBO) estimates that Medicare could spend an additional $70 billion over the next decade if these drugs were covered for obesity treatment. However, some studies suggest that treating obesity early could prevent costly complications such as heart disease and diabetes, potentially saving Medicare up to $175 billion in long-term health care costs.  

Some physicians and health care advocates argue that covering these medications could lead to better health outcomes, but some worry that increased costs could raise premiums for all Medicare recipients. This trade-off remains a critical factor in the ongoing policy debate. 

Where do GLP-1 Drugs Lie on the Medicare Drug Negotiation List?  

In January 2025, the Centers for Medicare & Medicaid Services (CMS) announced that semaglutide—marketed by Novo Nordisk under Ozempic, Rybelsus, and Wegovy—would be included in the second cycle of Medicare drug price negotiations. This decision is part of the Inflation Reduction Act aimed at lowering drug costs for Medicare beneficiaries. Semaglutide will be treated as a single product, with negotiated prices potentially reducing out-of-pocket costs starting in 2027. Despite this, the re-election of President Trump and a Republican-controlled government could challenge Medicare negotiations, citing concerns about price controls stifling innovation. 

On March 14, 2025, CMS confirmed that the manufacturers of 15 drugs, including Novo Nordisk’s Ozempic and Wegovy, had agreed to participate in the negotiations. The process will involve public input, with CMS proposing maximum fair prices by June 2025 and continuing negotiations until November 2025. These new prices will take effect in 2027. 

Medicaid’s Dilemma: A State-by-State Battle 

Medicaid’s coverage for GLP-1 drugs varies by state, unlike Medicare. While 13 states currently cover these medications for obesity treatment, others do not, mainly due to budget constraints and political considerations. This creates a fragmented system where access to these treatments depends heavily on where a patient lives. 

Medicaid enrollees face a significant disadvantage compared to those with private insurance. Obesity rates are often higher in low-income communities, making access to effective weight loss treatments even more critical. Without Medicaid coverage, many patients must rely on lifestyle interventions alone, which may not be sufficient for those with severe obesity. 

Logistical Challenges  

Logistical challenges surrounding GLP-1 drugs primarily stem from availability issues and potential trade policies. The high demand for these medications has led to persistent supply shortages, with the FDA officially recognizing a shortage in December 2022. While the agency declared the shortage resolved by October 2024, compounding pharmacies have continued producing versions of the drug, awaiting legal clarity. Adding to these supply chain concerns, there have been discussions about potential 25% tariffs on pharmaceutical imports under the Trump administration. However, some experts suggest that pharmaceutical products have historically been exempt from such tariffs, making the actual impact on GLP-1 drug availability uncertain. 

Another logistical factor is the administration of GLP-1 drugs, which are primarily injectable. Many formulations are designed for self-administration, requiring patients to learn proper injection techniques. While health care professionals are already licensed to administer injections, ensuring that patients feel comfortable and knowledgeable about self-injection remains a key consideration for effective treatment. 

The Road Ahead 

Expanding coverage for GLP-1 medications could have significant benefits but also presents financial and logistical challenges. Policymakers must weigh the long-term cost savings against the immediate budget impact. Addressing disparities in access while managing costs will be a balancing act for both federal and state governments.