The drug class that's taking the world by storm is finally seeing generic alternatives enter the market. From their high costs to their weight loss effects, GLP-1s seem to be what everyone is talking about. And a shift in tide – and price tags – is upon us.
In December of 2024, the FDA approved the first generic GLP-1, a version of Victoza® (liraglutide injection) for treating type 2 diabetes ages 10 and older. While GLP-1s rose in popularity due to their weight loss effects, this medication, and several others in this class are approved exclusively for the treatment of diabetes, a disease that affects over 11% of the US population. This means high costs for appropriate treatments for our members. Until now.
“With the accessibility of generic liraglutide, MedOne members will have access to efficacious medication for the treatment of Type 2 Diabetes Mellitus at a lower cost, which could remove financial barriers to care for patients,” said Dr. Katrina Morgan, Director of Clinical Review.
With the accessibility of generic liraglutide, MedOne members will have access to efficacious medication for the treatment of Type 2 Diabetes Mellitus at a lower cost, which could remove financial barriers to care for patients.
Dr. Katrina Morgan, Director of Clinical Review
The availability of generic liraglutide will help drive down costs by reducing total spend on medications, in this case specifically in the GLP-1 receptor agonist bucket. Currently, GLP-1s indicated for the treatment of type 2 diabetes contribute to over 16% of total spend across the MedOne book of business. With generic prescriptions accounting for 90% of prescriptions filled but only 17.5% of prescription drug spend (2023 U.S. Generic & Biosimilar Medicines Savings Report complied by IQVIA), this could add up to major savings for payors.
A generic drug is a medication that is identical to a brand-name drug in terms of active ingredient, strength, dosage form, and route of administration. Brand drugs generally hold a patent for 20 years, which prohibits other companies from manufacturing and selling generics of the medication until the patent is lifted. Generic medications generally are less expensive than brand-name drugs because they do not require the same research and marketing costs. Generic drugs are manufactured to the same quality standards as brand-name drugs and must undergo rigorous testing to ensure their safety and effectiveness. While generic drugs have the same active ingredient, they may have different inactive ingredients, such as fillers, colors, or preservatives. However, this does not affect the therapeutic effect of the drug.
MedOne has been closely watching the development and availability of generic liraglutide and other research in this space. As additional organizations begin to manufacture generics like this, we anticipate significant changes in price. If and when this generic becomes the lowest net cost option, MedOne will announce corresponding formulary changes.