The economics of semaglutide

…while one would certainly like to have these drugs available to these patients, if the price of these drugs doesn’t come down, you can make a good argument their cost will literally break Medicare. Why? Well, roughly 35% of Medicare patients are overweight or obese. Roughly 75% of people over 65 have coronary artery disease. (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6616540/#:~:text=The%20American%20Heart%20Association%20(AHA,age%20of%2080%20%5B3%5D.)

Even if you assume these numbers are independent of each other, which is very unlikely, because overweight people are more likely to have cardiovascular disease, this means at least 26% of the roughly 31 million Medicare recipients (and likely more) might benefit from these drugs. We have an eligible population for these drugs therefore of more than 8 million people. At current list prices we would be spending 8mil*1350*12 or about 130 billion dollars a year. Total Medicare spending is about 725 billion a year. So, Medicare spending would go up by more than 17% overnight and stay at that level for a long time to come.

Here is more from Gary Cornell, mostly about the degree of effectiveness.