Lobbing for Coverage: New Medications Drive Sharp Rise in VA Budget Deficit
The Department of Veterans Affairs is grappling with a significant surge in needed funding, primarily driven by the escalating costs of novel medications, particularly those used for weight loss.
On Monday, VA Under Secretary for Health
Dr. Shereef Elnahal revealed that the VA is requesting an additional
$6.6 billion from Congress to cover healthcare expenses during
fiscal year 2025.
This is a downward revision from an earlier projected shortfall estimate of $12 billion.
"Part of the reason we need the funding is that we know the need for new drugs for obesity … and novel medications for conditions that are more common in veterans," Elnahal explained in a call with reporters.
"New drugs on the market that will help veterans cost more."
The VA’s funding request arrives amidst a national conversation surrounding the rising cost of healthcare, particularly new medications.
The Biden administration recently proposed expanding Medicare and Medicaid coverage to include drugs like Wegovy, Ozempic, Mounjaro, and Zيكب, which are increasingly prescribed for veteran patients.
These medications, primarily used to treat type 2 diabetes
, have shown promise
in aiding weight loss, prompting a surge in prescriptions.
Currently, Medicare and Medicaid only cover these medications when prescribed for diabetes or risk of heart disease.
The proposed expansion is expected to cost Medicare approximately $25 billion and vary widely dependent on factors like dieting and rate of renewal.
However, these new drugs are only one factor driving the VA’s budget challenges.
Existing treatments for metabolic dysfunction-associated steatohepatitis (MASH), a disease prevalent in veterans, also add to the burden. The latest research suggests that over 30% of veterans receiving VA healthcare have risk factors for MASH and other fatty liver conditions. In March, the FDA approved Rezdiffra, the first drug specifically for MASH, with an annual price tag of $47,400 before applicable discounts or negotiation.
These factors uniquely positioned the VA to see steeper increases compared to projections, they are not just a reflection of national trends.
"We need more funding to continue our clip of providing more care to veterans than ever before,"
said Elnahal.
How is the VA working to negotiate lower drug prices with pharmaceutical companies?
## Lobbing for Coverage: New Medications Drive Sharp Rise in VA Budget Deficit
**Interviewer:** Dr. Elnahal, thank you for joining us today. The VA is facing a considerable budget shortfall, and it seems a major driver is the rising cost of new medications. Can you elaborate on this?
**Dr. Elnahal:** Absolutely. We’re seeing a significant increase in the demand for innovative treatments, particularly in areas like obesity and other chronic conditions. These novel medications are incredibly effective, but they come with a hefty price tag.
**Interviewer:** You recently requested an additional $6.6 billion from Congress to cover healthcare expenses in fiscal year 2025. This is down from an earlier projection of $12 billion. What factors led to this revision?
**Dr. Elnahal:** Several factors contributed to the revised estimate. We’ve been working diligently with Congress to identify areas for potential savings and efficiencies within the VA budget. Additionally, we’ve seen some stabilization in the cost of certain medications, which has helped to lessen the overall shortfall [[1](https://www.stripes.com/veterans/2024-07-17/veterans-budget-shortfall-pact-act-drugs-workforce-house-republicans-14519516.html)].
**Interviewer:** Understandably, the VA needs to balance providing cutting-edge care for veterans with responsible financial management. How are you ensuring that veterans have access to these essential medications without jeopardizing the long-term sustainability of the VA healthcare system?
**Dr. Elnahal:** It’s a constant balancing act. We’re committed to offering veterans the best possible care, including access to innovative treatments. At the same time, we have a responsibility to be good stewards of taxpayer dollars. We’re actively pursuing partnerships with pharmaceutical companies to negotiate lower drug prices, exploring alternative treatment options, and advocating for increased funding from Congress.
**Interviewer:** Dr. Elnahal, thank you for shedding light on this critical issue. We’ll continue to follow this story as it develops.
