Court Upholds Weight-Loss Drug Exclusion in Zepbound Sleep Apnea Coverage Dispute

By: HUB's EB Compliance Team

A federal district court has dismissed a class action suit challenging a health plan's denial of coverage for a Zepbound, GLP-1 medication, when prescribed to treat obstructive sleep apnea (OSA). The decision offers one of the first judicial tests of whether a plan's generic "weight-loss drug" exclusion can reach a medication that the U.S. Food and Drug Administration ("FDA") has separately approved for a non-weight-loss indication. For plan sponsors that rely on similar exclusions to manage the rapidly growing cost of GLP-1 medications, the ruling provides some reassurance, though it is likely there will be future litigation as GLP-1 uses continue to expand.

Background

In a recent federal district court case, Hamburger v. CareFirst BlueCross BlueShield, et al., the plaintiff participated in a self-funded group health plan sponsored by his employer. After the FDA approved Zepbound for the treatment of moderate to severe OSA in adults with obesity, the plaintiff's physician prescribed Zepbound for treatment of OSA. The plan denied the claim on the basis that the plan's prescription drug rider excluded coverage for "Prescription Drugs for weight loss," and Zepbound appeared on the plan's formulary as an anti-obesity agent. The denial was upheld on internal appeal.

The plaintiff sued under the Employee Retirement Income Security Act of 1974 (“ERISA”), asserting a claim for improper denial of benefits and a claim for breach of fiduciary duty. He also sought to represent a nationwide class of plan participants denied Zepbound coverage for OSA.

The Court's Reasoning

The plaintiff argued that because the FDA separately authorized Zepbound to treat OSA, that use fell outside the plan's weight-loss exclusion and instead fell within the plan's general grant of coverage for prescription drugs used to treat a covered medical condition (i.e., the plaintiff’s OSA). The court rejected this argument, focusing on the FDA's own approval language, which authorized Zepbound for OSA specifically “because it promotes weight loss, not as a separate, unrelated benefit.” The court reasoned that Zepbound alleviates OSA by promoting weight loss rather than through a separate, unrelated mechanism, and concluded that Zepbound remained a "weight loss" drug under the plan's exclusion regardless of the OSA indication.

The court also rejected the plaintiff's comparison to GLP-1 drugs approved specifically for diabetes, noting that those drugs are FDA-approved for diabetes irrespective of a patient's weight, whereas Zepbound's OSA approval is expressly tied to weight reduction. Lastly, because the denial rested on unambiguous plan language rather than a medical necessity determination, the court held the plan had no independent obligation to evaluate medical necessity before applying the weight-loss exclusion.

On the breach-of-fiduciary-duty claim, the court held that a plaintiff generally can't bring that kind of claim if a standard benefits-denial claim would already cover the same harm. The court also found that the denial notices, though brief, met ERISA's requirements for explaining a denial because they still gave enough information to substantially satisfy the rule. Because the plaintiff's individual claims failed, the court held he could not serve as a class representative and dismissed the class action along with his individual claims.

Implications for Plan Sponsors

Many employer-sponsored plans have added exclusions for "weight-loss drugs" or "non-surgical obesity treatments" in an effort to manage prescription drug spend without excluding GLP-1 coverage for diabetes or other conditions. This decision indicates that, at least where a drug's non-diabetes FDA approval is grounded in weight reduction, a straightforward weight-loss exclusion may be sufficient to support a denial — without requiring the claims administrator to separately evaluate medical necessity for the alternate indication.

The ruling is limited to a single district court and turns heavily on the specific FDA approval language for Zepbound's OSA indication and the specific plan and rider language at issue. It should not be read as a general rule that any exclusion will defeat a claim for any GLP-1 indication; outcomes will continue to depend on the precise facts of each situation.

Conclusion

The Hamburger decision is a favorable data point for plan sponsors defending narrowly drafted weight-loss exclusions against GLP-1 coverage claims, but it is not the last word on the issue. Plan sponsors should treat this ruling as a reminder to review plan and rider language for clarity and consistency, rather than as a basis to relax scrutiny of how GLP-1 exclusions are drafted and administered going forward.

If you have any questions, please contact your HUB advisor. View more compliance articles in our Compliance Directory.

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