North Carolina's State Health Plan can negotiate directly with the manufacturers of GLP-1 medications under a new agreement with CVS Caremark, its pharmacy benefit manager.
That agreement represents an initial step towards the State Health Plan once again providing coverage for tens of thousands of members who used the pricey but effective drugs for weight loss.
The N.C. State Health Plan stopped covering GLP-1 medications for weight loss last April. At that time, about 23,000 State Health Plan members were using the drugs, which were costing the plan more than $800 monthly after rebates.
Health plan officials projected annual spending on the drugs would rise from about $170 million in 2024 to more than $1 billion by 2030.
The GLP-1 provision is one part of an agreement that State Treasurer Brad Briner says will lead to hundreds of millions of dollars for the 750,000 state workers, retirees and their families covered by the State Health Plan.
Under the previous agreement with CVS Caremark, State Treasurer Briner said, the State Health Plan either had to offer GLP-1s to all members for weight loss or not offer them at all. The previous administrators were, Briner said, right to choose not at all considering the plan's financial challenges that are already causing premiums to rise next year.
"There is an intermediate answer between those two extremes, but unfortunately the contract didn't permit it, so that's what we've negotiated," Briner said in an interview.
The drugs are still available to State Health Plan members who use them to treat diabetes.
There are two manufacturers of GLP-1 drugs: Novo Nordisk, which sells their medications under the Ozempic and Wegovy trade names; and Eli Lilly, which sells its medications under the Mounjaro and Zepbound trade names.
"We have had very preliminary discussions after we signed the Caremark agreement — because we couldn't (before) with the manufacturers — and they're very promising, but they're early," Briner said.
Earlier this year, the N.C. Senate included $95 million in its state budget proposal to provide GLP-1 medications for State Health Plan members with body mass indexes of at least 38. The House and Senate have been locked in a stalemate over the budget for months.
Medication isn't the only tool the State Health Plan is considering to help members lose weight and keep it off. There are about 125,000 obese members of the State Health Plan, Briner said.
Health plan administrators are working to start a weight loss and weight management program akin to those some corporations offer. That would ideally be in addition to once again offering GLP-1 medications.
Briner pointed to AT&T's as the "gold standard" in the corporate world. That plan can include regular check-ins with participants to make sure they're making choices that can lead to weight loss and the associated health benefits.
"What we want to do is invest in those who are really willing to invest in themselves, to do more than just GLP-1s (and) wrap people in a broad weight loss management program so that we're helping them in many other ways to get to a healthier lifestyle," Briner said.
Both the GLP-1 agreement and weight management plan will likely be completed in 2026 at the earliest, Briner said.
The CVS Caremark agreement
The State Health Plan's agreement with CVS Caremark will result in the plan receiving hundreds of millions of dollars, the State Treasurer's Office announced this week.
Under the agreement, the State Health Plan will retain control of the list of medications available to members, a list known as a formulary.
"We remain laser focused on lowering drug costs, delivering value, driving innovation and providing transparency across our customers’ pharmacy benefit," Ed Devaney, CVS Caremark's president, said in a statement.
A key part of the agreement, Briner said, was the payments that CVS Caremark receives for some of the generic drugs manufactured by CVS Health subsidiary Cordavis.
Cordavis works with drug manufacturers to develop generic versions of difficult-to-make medications. The company has, for instance, worked with Sandoz to develop Hyrimoz, a biologically similar project to Humira.
The problem, Briner said, was that the drug rebate agreement under the previous agreement meant that Caremark was losing money by making its own generic drugs available.
Under the new agreement, he said, the rebate formula has been tweaked so that Caremark is making more and is incentivized to make the generic drugs available instead of name-brand alternatives.
"If you're the branded pharma person, you're the loser in this conversation, but the PBM and particularly the State Health Plan are better off," Briner said.
Caremark has been the State Health Plan's pharmacy benefit manager since 2017, and its contract is set to expire at the end of 2027.
