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Medicaid Coverage for Obesity Medications: Utilization and Net-of-Rebate Spending / Coady Wing, Wei-Lun Lo, Maddie Potter, Tarik Yuce, Alberto Ortega, John Cawley, Thuy D. Nguyen, Kosali I. Simon.
- Format:
- Book
- Author/Creator:
- Wing, Coady.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w34949.
- NBER working paper series no. w34949
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2026.
- Summary:
- We document state variation in Medicaid coverage for obesity-indicated GLP-1 medications over time, and use a stacked difference-in-differences design to estimate the effects of coverage on utilization and net-of-rebate spending. Nine quarters out, coverage increases prescriptions for obesity-indicated GLP-1 medications by 0.82 per 100 enrollee-months (SE = 0.10). Coverage had no effect on GLP-1 prescribing for diabetes or cardiovascular indications, suggesting that off-label prescribing of diabetes formulations for obesity is not very common in the Medicaid program. The expansions do not appear to affect consumer spending at major online GLP-1 compounding firms, which suggests that the utilization response in our main analysis reflects new utilization rather than crowd-out. We find that coverage increases net-of-rebate Medicaid spending by $751.6 per 100 enrollee-months (SE = $92.0), compared to $986.9 in gross reimbursements--manufacturer rebates reduce the state's net spending by approximately 24 percent. Across the 17 states that ever covered obesity-indicated GLP-1 medications by mid 2025, coverage increased Medicaid net spending by around $2.68 billion per year. Extending Medicaid coverage in the remaining states would generate a further $3.63 billion in annual net spending.
- Notes:
- March 2026.
- Print version record
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