MINYANVILLE ORIGINAL Aetna
(NYSE:AET), one of the country’s largest health insurers, says a pair of recently approved diet pills are medically necessary, boosting the stocks of three weight-loss drug makers. The shares of Vivus
(NASDAQ:VVUS), Arena Pharmaceuticals
(NASDAQ:ARNA) and Orexigen Therapeutics
(NASDAQ:OREX) jumped on the news.
In an updated clinical policy bulletin
, Aetna says two drugs, Vivus’ Qysmia and Arena’s Belviq, should be covered if certain criteria is met.
The Aetna decision is significant because it means insured patients will receive at least some help paying for the drugs. The insurer’s decision is also another step toward elevating the status of diet pills as medicines that treat a serious medical condition. In years past, these drugs were viewed as vanity products that carried severe side effect risks. In fact, the two diet drugs approved earlier this year marked the end of a 13-year period in which no weight loss pills were cleared for the US market. The events leading up to approval of the new drugs stirred a debate over the past few years that pitted medical need to treat a health epidemic vs. patient safety.
Aetna’s decision is likely to be followed by other major insurers, who are also considering whether to cover new diet pills, Cowen & Co. analyst Simos Simeonidis predicts.
“We view the addition of Qsymia to this (insured) list as a positive development for Vivus and for the obesity pharmacotherapy space, in general, not only because Aetna is a major insurer in terms of number of lives covered, but also because it is significantly more difficult to get one of the large players in the space to make the first move towards reimbursement of a new class of drugs, than to have the other ones follow suit,” Simeonidis says. He rates Vivus’ stock a hold because he believes the sales ramp-up for Qysmia will continue to be slow.
Shares of Vivus rose 16% to $12 in late afternoon trading Wednesday. Arena moved up 3% to $9.19. Orexigen jumped 7% to $4.67. Orexigen is developing a drug, contrave, which is being tested for safety. Vivus’ Qysmia was introduced to the market in September. Arena’s Belviq is approved by the Food and Drug Administration but is awaiting a classification ruling from the Drug Enforcement Administration. (Belviq has a risk of abuse.)
There are restrictions to the Aetna coverage. The insurer requires their members to try to first lose weight through diet and exercise. The insured member also has to be measurably obese and, in many cases, show risk for other health problems. Some Aetna plans specifically exclude treatment for weight loss. Those plans would not cover the pills, Aetna says.
Still, the coverage decision is another vindication for Vivus, Arena and Orexigen, which have been arguing for the acknowledgement that obesity is a health epidemic in the US. A fat American population is contributing to many health problems, including heart disease, diabetes and even cancer.
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