Obesity Drugs: Few Adults Used Prescription Drugs for Weight Loss and Insurance Coverage Varied

Obesity has been associated with an increased risk of developing conditions such as heart disease, stroke, diabetes, and certain types of cancer. Treatment options for individuals with obesity include lifestyle therapy, such as diet, exercise, and behavioral counseling; obesity drugs; surgery; or a combination of these efforts. The Bipartisan Budget Act of 2018 (P.L. 115-123) included a provision for GAO to review the prevalence of obesity and the use and insurance coverage of obesity drugs.

This report examines the prevalence of obesity in the United States, and what is known about the use and health insurance coverage of obesity drugs, among other objectives.

GAO examined data from agencies within the Department of Health and Human Services (HHS) on the prevalence of obesity (using estimates for 2013 through 2016) and the use, spending, and coverage of obesity drugs; conducted a literature review of relevant studies published from January 2012 through January 2019 in peer-reviewed and other publications; reviewed drug formularies for selected health plans; and reviewed documents and interviewed officials from federal agencies and stakeholder organizations (including medical associations, advocacy groups, pharmacy benefit managers, and insurers).

HHS provided technical comments on a draft of this report, which were incorporated as appropriate.

The prevalence of obesity—that is, body weight higher than what is considered a healthy weight for a given height—was about 38 percent among all U.S. adults, according to the latest available national estimates at the time of GAO's analysis. This prevalence was similar for adults with different types of health insurance.

Treatment for adults with obesity may include one or more of nine prescription drugs that the Food and Drug Administration has approved for weight management (i.e., obesity drugs), though relatively few adults have used these drugs. Of an estimated 71.6 million U.S. adults with obesity, an estimated 660,000 per year, on average, used an obesity drug from 2012 through 2016, according to national estimates. Among adults who reported trying to lose weight, about 3 percent reported that they took prescription medication for weight loss from 2013 through 2016, according to national estimates.

Coverage of obesity drugs varied across different types of health insurance, including Medicare and Medicaid. Plans cited factors such as low consumer demand and strong evidence supporting other treatments in their coverage decisions. GAO's analysis of Centers for Medicare & Medicaid Services' data indicates that some Medicare prescription drug plans and state Medicaid programs reimbursed for some obesity drugs in 2016 and 2017. Coverage for private health insurance plans also varied, and plans may require the patient to obtain prior authorization for the drugs to be covered, according to officials from insurers and pharmacy benefit managers GAO interviewed. For example, officials from one insurer said that some of their plans only cover obesity drugs after a patient has tried other treatment options such as behavioral counseling.

Obesity—that is, body weight higher than what is considered a healthy  weight for a given height—has been associated with an increased risk of  developing heart disease, stroke, type 2 diabetes, certain types of cancer,  and other conditions. It is also associated with an increased risk for death,  particularly among adults younger than 65 years old. Obesity and its  associated health problems also have a significant economic effect on the  U.S. health care system. The medical spending on obesity for adults in  the United States was estimated to be about $342 billion in 2013, and the  share of health care spending to treat obesity-related illness rose from  about 21 percent in 2005 to about 28 percent in 2013, according to a  2017 study.

In 2013, the American Medical Association classified obesity as a disease  that requires a range of interventions for its treatment and prevention.  Obesity is a complex health issue to address and results from a  combination of causes and contributing factors, including individual  factors such as behavior and genetics, according to the Centers for  Disease Control and Prevention (CDC). Treatment options for individuals  with obesity include lifestyle therapy (such as diet, physical activity, and  behavioral counseling), bariatric surgery, prescription weight loss  medications (i.e., obesity drugs), or a combination of these. As of June  2019, there were nine prescription obesity drugs approved by the Food  and Drug Administration (FDA); four of them are approved for short-term  use and five are approved for long-term use.

The Bipartisan Budget Act of 2018 included a provision for us to review  the prevalence of obesity and the use of obesity drugs, including  spending for and insurance coverage of these drugs. This report  examines  1.  the prevalence of obesity among adults in the United States;  2.  what is known about the use of obesity drugs and the individuals who  3.  what is known about health insurance coverage of obesity drugs; and  4.  what is known about spending on obesity drugs and about medical  spending for adults who used obesity drugs compared to those who  did not.

To examine the prevalence of obesity among adults in the United States,  we examined nationally representative estimates calculated by CDC  using data from the National Health and Nutrition Examination Survey  (NHANES), which uses physical examinations of participants to measure  height and weight to calculate body mass index (BMI). CDC analyzed  NHANES data from 2013 through 2016 to estimate the prevalence of  obesity for all adults by age and health insurance coverage.

To examine what is known about the use of obesity drugs and the  individuals who use them, we conducted a literature review, interviewed  knowledgeable stakeholders, and examined federal agency data:

Literature review. We identified relevant peer-reviewed studies  published from January 2012 through January 2019 through a search  of bibliographic databases, including ProQuest, Scopus, MEDLINE,  and International Pharmaceutical Abstracts , using terms such as  “obesity,” “weight loss,” and “prescriptions.” Of the 765 study citations  we identified, we reviewed 220 full studies; of those, we determined  there were 19 relevant studies, which we examined for information  related to the use of obesity drugs and individuals who use them. We  also examined available information on the clinical trials conducted to  obtain FDA’s approval of the prescription obesity drugs for the U.S.  market. These were either included in our literature review or, for  publications prior to 2012, we obtained a copy of the study.

Stakeholder interviews. We obtained information from officials from  eight organizations—three medical associations and five advocacy  groups for obesity research and treatment. We reviewed information  and studies obtained from these organizations on the use of obesity  drugs, including any guidelines for using obesity drugs, and also  obtained their perspectives on what physicians and other health care  providers take into consideration when prescribing these drugs,  among other things.

Federal agency data. We reviewed data and documents, and  interviewed officials from federal agencies within the Department of  Health and Human Services (HHS), including CDC, FDA, the Agency  for Health Care Research and Quality (AHRQ), the Centers for  Medicare & Medicaid Services (CMS), and the National Institutes of  Health. Data and documents we reviewed included AHRQ’s nationally  representative estimates of the use of obesity drugs from Medical  Expenditure Panel Survey (MEPS) data from 2012 through 2016;  CDC’s estimates of adults who reported that they took prescription  medications for weight loss from NHANES data from 2013 through  2016; and FDA’s analysis of dispensings of the nine prescription  obesity drugs using 2008 through 2017 data from the agency’s  Sentinel System. These data were the most recently available data at  the time of our review.

To examine what is known about the health insurance coverage of  obesity drugs, we examined relevant laws and regulations and obtained  information and policy documents from federal agencies, including from  CMS (for Medicare and Medicaid) and the Office of Personnel  Management [for the Federal Employees Health Benefits Program  (FEHBP)]. For information on the number of claims for obesity drugs that  were reimbursed and the number of plans that reimbursed these claims  under the Medicare prescription drug program, known as Medicare Part  D, we analyzed Prescription Drug Event data from CMS for 2016 and  2017. For information on the number of state Medicaid programs that  reimbursed claims for obesity drugs and the number of claims for obesity  drugs that they reimbursed, we analyzed CMS’s Medicaid State Drug  Utilization data for 2016 and 2017. For information on FEHBP guidance  on coverage of obesity drugs as of May 2019, we examined documents  and information from the Office of Personnel Management. In addition,  we identified one study in our literature review relevant to insurance  coverage of obesity drugs, and we obtained information from officials  from the three largest pharmacy benefit managers and from four large  insurers, as well as from two organizations knowledgeable about  prescription drug benefits for employer-sponsored health plans. We also  reviewed drug formularies for selected private health insurance plans to  determine if any of the prescription obesity drugs were included.

To examine what is known about spending on obesity drugs and about  medical spending for adults who used obesity drugs compared to those  who did not, we examined the latest available AHRQ estimates, which are  based on 2012 through 2016 MEPS data on payments for obesity drugs  and medical spending, and FDA’s nationally projected estimates on the  prescriptions dispensed for obesity drugs calculated using data from the  2017 IQVIA™ National Prescription Audit and IQVIA™ Total Patient  Tracker. In addition, for the amounts spent on obesity drugs by  Medicare Part D plans and Medicaid, we analyzed CMS’s Prescription  Drug Event data and Medicaid State Drug Utilization data, respectively,  for 2016 and 2017. We also reviewed studies that we identified in our  literature review or obtained from stakeholders.

To determine the reliability of the data we used for all four objectives, we  reviewed documentation on data collection processes and discussed  limitations of the data with the relevant federal agency officials. In  addition, we conducted data reliability checks on the data, when  appropriate. We determined the data used in this report were sufficiently  reliable for our purposes. See appendix I for additional information on our  scope and methodology.

We conducted this performance audit from April 2018 to August 2019 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

BMI is used as a screening tool for obesity. An individual with a BMI of 30  or higher is considered to have obesity.

Over the past two decades, both the prevalence of obesity and estimates  of the medical spending associated with individuals with obesity have  increased. For example, a 2018 study estimated that the percentage of  national medical expenditures used to treat obesity-related illnesses in  adults increased from 6.13 percent in 2001 to 7.91 percent in 2015, a 29  percent increase. This study also found that the high medical costs of  obesity are due to extremely high medical costs among a small  percentage of the population who have severe obesity (those with a BMI  of 40 or higher). In addition, a 2017 study found that medical expenditures  rise most rapidly for individuals with a BMI of 40 or higher.

One option for the treatment of obesity is the use of prescription obesity  drugs. As of June 2019, there were nine prescription drugs approved by  FDA to treat obesity. Four obesity drugs—benzphetamine,  diethylpropion, phendimetrazine, and phentermine—were approved by  FDA in 1961 or earlier for short-term use, which is generally about 12  weeks, and are available as generic drugs. The remaining five obesity  drugs were approved by FDA in 1999 or later for long-term use and are  available as brand-name drugs— bupropion/naltrexone (Contrave),  liraglutide (Saxenda), lorcaserin (Belviq), orlistat (Xenical), and  phentermine/topiramate (Qsymia). Each of these five brand-name  obesity drugs underwent one or more randomized, controlled clinical trials  for safety and efficacy prior to FDA approval of the drug—a total of 15  clinical trials across the five drugs. Obesity drugs work in different ways;  some may help an individual feel full sooner or less hungry, while others  may reduce fat absorption in the body. Results vary by medication and by  person, but, according to the National Institutes of Health, on average,  people who take obesity drugs as part of a lifestyle program lose between  3 and 9 percent more of their starting body weight than people in a  lifestyle program who do not take obesity drugs. As with other prescription  drugs, obesity drugs may have side effects such as headache, dizziness,  dry mouth, nausea, and diarrhea. And, as with other prescription drugs,  health care providers may prescribe an obesity drug for off-label use— that is, for a different medical condition, in a different dosage, or for a  different duration than for which the drug is FDA approved.

Obesity drugs should be used as an adjunct to lifestyle therapy (e.g., diet,  physical activity, and behavioral counseling), according to guidelines from  several medical associations. According to these guidelines, the use of  obesity drugs is indicated for individuals with a BMI of 27 or higher with  one or more obesity comorbidities (such as type 2 diabetes), or  individuals with a BMI of 30 or higher who have a history of failure to  achieve clinically meaningful weight loss (that is, weight loss of 5 percent or more) or who are unable to sustain weight loss. In addition, the  guidelines recommend evaluating the patient’s weight loss after about 12  to 16 weeks of treatment with an obesity drug and discontinuing the drug  if the patient has not lost a certain amount (e.g., at least 5 percent) of  their initial body weight.

Although obesity is classified as a disease, some health care providers,  including those who specialize in the care of patients with obesity,  continue to stigmatize patients with obesity. For example, a 2018 study  reported that health care providers may perceive patients with obesity as  being less compliant and having less self-discipline than other patients.  Additionally, health care providers may not initiate discussions about  weight loss with patients because of lack of time, other important issues  or concerns, a belief that a patient is not motivated or interested in losing  weight, or concern over a patient’s emotional state, according to another  2018 study.

The Prevalence of Obesity Was Close to 40 Percent among All U.S. Adults from 2013 through 2016

The prevalence of obesity was about 38 percent among all U.S. adults  (about four of every 10 adults) from 2013 through 2016, according to  nationally representative estimates from CDC. The estimate of  prevalence among adults covered by Medicare was about 40 percent,  and among those with Medicaid or other public health insurance  (excluding Medicare) it was about 42 percent. In addition, the prevalence  of obesity among adults with private health insurance coverage and  among the uninsured was similar, at about 37 percent and 38 percent,  respectively. These national estimates also showed that about 24 percent  of Medicare beneficiaries had Class 1 obesity, about 10 percent had  Class 2 obesity, and about 6 percent had Class 3, or severe, obesity.  (See fig. 1.)

According to CDC estimates, adults age 18 to 64 and adults age 65 and  older had a similar prevalence of obesity, about 39 percent and 38  percent, respectively. However, a higher percentage of adults age 18 to  64 than adults age 65 and older had Class 3 obesity. (See table 1.)  Appendix III provides additional information on the prevalence of obesity  among adults, as well as on the prevalence of adults who were  overweight, which is defined as a BMI of 25 to <30, including 95 percent  confidence intervals.

Few Adults Used Obesity Drugs and Limited Data Are Available on Individuals Who Have Used These Drugs

Relatively few U.S. adults, including adults with obesity and adults who  reported trying to lose weight, used obesity drugs from 2012 through  2016, according to nationally representative estimates. Guidelines  suggest prescribing obesity drugs as an adjunct to other diet and lifestyle  changes, or when other approaches have not resulted in clinically  significant weight loss. Those health care providers who prescribe obesity  drugs consider several factors, such as whether there are any  contraindications of the obesity drug for their patients and the cost of the  drug. Some limited data are available on individuals who have used  obesity drugs, including data on whether these individuals adhered to  taking the prescribed obesity drug or maintained their weight loss over  time.

Relatively Few Adults Used Obesity Drugs

Available data indicate that relatively few U.S. adults, including those with  obesity, used obesity drugs. Specifically, of the estimated 233 million  U.S. adults, fewer than a million used any of the nine obesity drugs,  according to AHRQ’s nationally representative estimates from MEPS data  for 2012 through 2016. Of the estimated 71.6 million U.S. adults with  obesity, an estimated 660,000 per year, on average, used an obesity  drug, according to these data. Similarly, among those who reported  trying to lose weight, relatively few of them (about 3 percent) reported that  they took prescription medication for weight loss, according to CDC’s  nationally representative estimates from NHANES for 2013 through  2016.

Additionally, six of the studies we reviewed examined this topic and found  that few U.S. adults have used obesity drugs. For example, one study  reported that in 2011, 2,554 obesity drug prescriptions were filled per  100,000 people, with about 87 percent of those prescriptions for  phentermine, a generic obesity drug. Three other studies assessed the  use of obesity drugs among veterans receiving care from the Veterans  Health Administration and similarly found that few patients were  prescribed obesity drugs. One of these studies found that about 1  percent of the 153,939 veterans who enrolled in the MOVE! Weight  Management Program from 2013 through 2016 were prescribed an  obesity drug (orlistat, phentermine, phentermine/topiramate, liraglutide, or  bupropion/naltrexone) within 1 year of MOVE! initiation.

Physicians May Have Concerns About Prescribing Obesity Drugs; Those Who Do Prescribe These Drugs Consider Multiple Factors

According to officials from groups representing physicians and advocacy  groups we interviewed, and seven studies we reviewed, some physicians  and other health care providers may not be open to or comfortable with  prescribing obesity drugs. For example, providers may not perceive  obesity drugs to be safe or effective. According to officials from one  advocacy and research group, concerns about the safety of obesity drugs  may be related to the adverse consequences associated with past obesity  drugs. In addition, one medical association we contacted indicated  physicians consider clinical preventive service recommendations from the  U.S. Preventive Services Task Force on the use of obesity drugs. The  task force recommends that clinicians offer or refer adults with a BMI of  30 or higher to intensive, multicomponent behavioral interventions.  Further, a systematic review of evidence of the benefits and harms of  behavioral therapy and use of obesity drugs conducted for the task force  found that obesity drugs, but not behavior-based interventions, were  associated with higher rates of harm. The potential for harm (i.e.,  adverse events) may discourage physicians and other health care  providers from prescribing these drugs. In addition, officials we  interviewed and the studies we reviewed noted that a lack of insurance  coverage, high out-of-pocket costs, and the patient’s means to afford  obesity drugs may also discourage physicians from prescribing obesity  drugs.

The officials and studies also noted that physicians might have gaps in  knowledge about obesity drugs. For example, officials from one medical  association noted that lack of education is a barrier to physicians in  prescribing obesity drugs for patients who would be candidates for them,  and officials from another medical association said that many clinicians  are not aware that there are FDA-approved drugs for obesity, and  therefore they do not think about prescribing them. One study we  reviewed found that, of the 111 primary care providers responding to a  survey, most reported limited experience with obesity drugs as a barrier  to prescribing them. While guidelines on the use of obesity drugs  suggest prescribing obesity drugs as an adjunct to other diet and lifestyle  changes, or when other approaches have not resulted in clinically  significant weight loss, physicians and other health care providers may  not understand the recommendations outlined in the guidelines. For  example, one study found that many of the health care providers  responding to a survey reported responses inconsistent with the  guideline-recommended thresholds to initiate and continue use of obesity  drugs.

Physicians and health care providers who do prescribe obesity drugs take  several factors into consideration. Specifically, before prescribing an  obesity drug, these providers consider the likely benefits of weight loss,  the drug’s possible side effects, the patient’s current health issues and  other medications, family medical history, and the cost of the drug,  according to the National Institutes of Health. According to officials from  an advocacy group, specific considerations include (1) the patient’s other  health conditions that may increase the risk from using a particular  obesity drug (contraindications); (2) the ability of an obesity drug to treat  both the patient’s obesity and other health conditions; (3) the patient’s  ability to afford a particular obesity drug, given their insurance coverage  and other financial resources; (4) patient preference regarding the dosage  and form of the drug; and (5) the average efficacy (weight loss) of an  obesity drug. Further, when treating obesity, providers use the least  invasive treatments, such as lifestyle-based therapies first, then escalate  to obesity drugs if noninvasive treatments prove ineffective, according to  officials from the same advocacy group.

Some Limited Data Are Available on Individuals Who Have Used Obesity Drugs

Some limited data are available on individuals who have used obesity  drugs, including data on the distribution of BMI, the use of obesity drugs  in conjunction with other items or services, whether these individuals  adhered to using the prescribed obesity drug or maintained their weight  loss over time, and the impact that using obesity drugs has on other  medical services directly related to obesity. The following is a summary of  available information on specific aspects of individuals who have used  obesity drugs.

Distribution of BMI across individuals who have used obesity drugs.  CDC’s nationally representative estimates for 2013 through 2016 found  that the BMI of adults who reported that they used obesity drugs ranged  from 21 to 64, with a median BMI of 34. However, these data are limited  because they do not indicate how long the individual used the drugs  before their BMI was measured.

Use of obesity drugs in conjunction with other items or services.  Two studies we reviewed examined the use of obesity drugs in  conjunction with other items or services. These studies found that  participants who used an obesity drug in conjunction with other services,  such as behavioral counseling, lost more weight than those who did not  take the drug with the other services. For example, in one 2019 study,  participants who received intensive behavioral therapy combined with an  obesity drug, liraglutide, had nearly double the weight loss (an average of  about 12 percent of their body weight) compared to the participants who  received only intensive behavioral therapy (an average of about 6 percent  of their body weight). In addition, the 15 clinical trials for the brand-name  obesity drugs that we reviewed generally found that a significantly higher  percentage of participants who used the obesity drug combined with other  items or services (such as a low-calorie diet or increased physical activity)  achieved 5 percent or more weight loss compared to participants who  used a placebo with the other items or services. One clinical trial that  used an intensive behavior modification program (28 group sessions)  found higher average weight loss (9 percent loss of initial body weight) for  participants who used the obesity drug (bupropion/naltrexone) than for  the placebo group. This clinical trial also found that the placebo group  with the intensive behavior modification had higher weight loss than  placebo groups in the other clinical trials, none of which used intensive  behavioral therapy.

Adherence to using the prescribed obesity drug. FDA’s analysis of  Sentinel System data of obesity drugs dispensed in 2008 through 2017  found that in the majority of patients using obesity drugs, cumulative  treatment duration was 90 days or less. FDA analyzed data for 267,836  new users of obesity drugs and found that about 58 percent of patients  who used any of the obesity drugs did so for 90 days or less; about 31  percent used any of the obesity drugs for 30 or fewer days. The average  duration for the first use of any of the nine obesity drugs was 69 days.  (See appendix V for more data from FDA’s analysis.) FDA’s findings are  consistent with the findings of two of the three studies that we reviewed  that measured adherence to using the prescribed obesity drug. These  studies reported that use of obesity drugs dropped significantly after 30  days. For example, one 2018 study that reviewed 1 year of data on  26,522 patients who had new prescription drug claims for one of four  obesity drugs (liraglutide, lorcaserin, bupropion/naltrexone, and  phentermine/topiramate) found that adherence to using any of the four  obesity drugs dropped markedly during the first month following the initial  claim for the drug. In addition, while the 15 clinical trials we reviewed  were not designed to measure adherence to taking obesity drugs, they  provide some information on whether or not study participants adhered to  using these drugs during the trials. Participant dropout rates for these  clinical trials ranged from 14 percent to 66 percent for the obesity drug  treatment and the placebo groups, which could indicate difficulty in  adherence to the study regimen; however, participants using the placebo  generally had higher dropout rates than those using the obesity drug. The  reasons for discontinuation among study participants in the clinical trials  included side effects, such as headaches and nausea; being unavailable  for follow up; and withdrawal of consent.

Maintaining weight loss over time by individuals who have used  obesity drugs. The recent systematic review conducted for the U.S.  Preventive Services Task Force noted that data on long-term weight loss  with obesity drugs are limited. The review found that individuals using  obesity drugs were more likely to maintain their weight loss over 12 to 36  months compared with placebo, but noted that the evidence was limited  by the small number of trials for each medication, poor follow up with  participants, and limited applicability (given that participants had to meet  narrowly defined inclusion criteria), among other limitations. We also  identified six studies—each of which reviewed one of the FDA-approved  obesity drugs—that examined weight loss maintenance, generally after  about 1 year. For example, a 2018 study for one obesity drug (lorcaserin)  found that while the obesity drug initially improved upon weight loss  achieved with weight loss maintenance counseling, this advantage was  not maintained at 1 year. That is, after 1 year, there was no significant  difference in weight loss maintenance between the participants treated  with the obesity drug along with counseling, compared to those treated  with placebo along with counseling. Another study that examined clinical  trial data for one obesity drug (bupropion/naltrexone) concluded that  participants who lost at least 5 percent of their body weight after 16  weeks were likely to maintain clinically significant weight loss (of at least 5  percent) after 1 year of treatment with the drug.

The impact of using obesity drugs on medical services directly  related to obesity. We did not identify any studies on the impact that the  use of obesity drugs had on the utilization of medical services directly  related to obesity. In terms of studies on the impact on health outcomes,  the systematic review conducted for the U.S. Preventive Services Task  Force concluded that health outcomes data for individuals receiving  treatment with obesity drugs were limited. The review reported that  clinical trials of obesity drugs for weight loss examined few outcomes  beyond quality of life measures, and that none of the drug-based  maintenance trials reported the effects of the obesity drug interventions  on health outcomes. The review noted that the trials included in the review were of highly selected populations with multiple exclusions  relevant to health outcomes (e.g., history of serious medical conditions).  The review further noted that while it appears that weight loss  interventions, including obesity drugs, can reduce diabetes incidence,  larger studies with longer-term follow up are required to understand the  full benefits of these interventions on health outcomes and whether those  effects are long lasting.

Health Insurance Coverage for Obesity Drugs Is Limited and Varied across Types of Insurance

Health insurance coverage for obesity drugs is limited—that is, not all  public and private health insurance provided coverage for obesity drugs  or may have additional requirements to determine these drugs are  medically necessary. Medicare Part D plans may opt to cover obesity  drugs, and state Medicaid programs or Medicaid managed care plans  within states may choose either to cover or exclude obesity drugs from  coverage. We found that both Medicare Part D and Medicaid reimbursed  for a relatively small number of prescriptions for obesity drugs in 2016  and 2017. For private health insurance—which includes employer- sponsored health insurance, individually purchased health plans, and  FEHBP plans—we found that coverage varied and, when obesity drugs  were covered, the coverage could have additional requirements such as  prior authorization or determination that a drug is medically necessary for  the patient.

Medicare. Under Medicare’s prescription drug benefit, Medicare Part D  plans may choose to cover obesity drugs—in these cases, obesity drugs  are considered supplemental drugs under an enhanced alternative  coverage plan. Medicare beneficiaries who select a Part D plan that  offers supplemental benefits, which may include coverage of excluded  drugs such as obesity drugs, must pay the full premium cost for those  additional benefits (i.e., Medicare does not subsidize them). Medicare  Part D plans can choose whether or not to offer enhanced alternative  coverage, and not all Medicare Part D plans that provide enhanced  alternative coverage cover obesity drugs as supplemental drugs. For  example:

Roughly half of the Medicare beneficiaries covered by one large  insurer’s Medicare Part D plans in one state have coverage for  obesity drugs as a supplemental drug under enhanced alternative  coverage, according to officials from that insurer.

Officials at another large insurer told us that their Medicare Part D  plans have historically covered supplemental drugs based on  consumer demand, and obesity drugs do not typically meet their  threshold for offering supplemental coverage. The officials noted that  their plans have limited funds to cover supplemental drugs and that  consumer demand is typically highest for other types of drugs, such  as drugs to treat erectile dysfunction.

Enhanced Alternative Coverage and  Supplemental Drugs under Medicare  Enhanced alternative coverage is  alternative prescription drug coverage under  Medicare Part D with value exceeding that of  Medicare Part D’s defined standard coverage.  Enhanced alternative coverage may include  basic prescription coverage and supplemental  benefits such as supplemental drugs.   Supplemental drugs are drugs—including  drugs for weight loss—that would be covered  Part D drugs but for the fact that they are  specifically excluded as Part D drugs under  Medicare Part D’s basic prescription drug  coverage. Medicare Part D plans may offer  these excluded drugs, such as obesity drugs,  as a supplemental drug under enhanced  alternative coverage.  A Medicare Part D plan can choose which  drugs it covers as a supplemental drug under  enhanced alternative coverage—that is, not  all plans cover the same supplemental drugs  as part of enhanced alternative coverage.

Data from CMS on Medicare Part D reimbursement for obesity drugs  provide some insight on coverage. For example, our analysis found that  in 2017, 27 Medicare Part D plans reimbursed for obesity drugs under  enhanced alternative coverage for 209 Medicare beneficiaries. (See  table 2 for 2016 and 2017 data.) See appendix VI for more information.

Medicaid. State Medicaid programs or Medicaid managed care plans  within states may choose either to cover or exclude obesity drugs from  coverage. Our analysis found that in 2017, Medicaid programs or  Medicaid managed care plans in 41 states reimbursed pharmacies and  other providers for at least one claim for an obesity drug, for a total of  30,800 prescriptions. (See table 3 for 2016 and 2017 data.) Medicaid  managed care organizations may provide coverage of obesity drugs not  covered by the state plan, according to CMS. See appendix VII for more  information.

Employer-sponsored and individually purchased health plans.  Coverage of the nine obesity drugs varied in employer-sponsored and  individually purchased health plans, according to the insurers and  pharmacy benefit managers we interviewed. For example:

Officials from one large insurer told us that coverage of obesity drugs  is included in plans for about 90 percent of their members; only a  small percentage of members do not have plans with this coverage.

Officials from another large insurer surveyed its health plans in  different geographic locations and found that, of those that responded,  four of the six employer-sponsored and three of the six individually  purchased health plans covered the nine obesity drugs. They said that  many of the plans that covered obesity drugs in their employer- sponsored markets also covered these drugs in their individual  market.

Officials at a large pharmacy benefit manager said employers that  provide employer-sponsored health insurance can choose to  customize their formulary and decide whether to include obesity  drugs. They said their select and premium prescription drug  formularies include obesity drugs, so companies that decide to offer  those formularies would cover obesity drugs, but many companies  choose to customize their formularies and may not include obesity  drugs.

Even if employer-sponsored and individually purchased health plans offer  coverage of obesity drugs, these plans often put requirements in place to  determine a beneficiary’s eligibility for coverage of obesity drugs,  according to officials from insurers and pharmacy benefit managers we  interviewed. For example, plans may require beneficiaries to obtain prior  authorization, require a determination of medical necessity of the drug for  the patient, and review the drug’s effectiveness prior to making a  coverage decision. For example, an official from one large insurer told us  their drug formulary does not include obesity drugs because the clinical  evidence indicates that other therapies are more effective for weight loss.  However, this official also said that some of its plans would cover obesity  drugs as a nonformulary option if a physician or other health care provider  indicates that the obesity drug is medically necessary (e.g., after a patient  has tried other treatment options, such as behavioral therapy).

Further, if a patient is offered coverage of an obesity drug but fails to  receive a clinical benefit within a specified time frame, insurers and  pharmacy benefit managers told us the following:

A patient and his or her physician may decide together whether the  patient should continue or discontinue the obesity drug, and plans  often defer to physicians to determine whether an obesity drug is  medically necessary for a patient.

Some plans may require additional information from a patient’s  physician every 6 to 12 months for reapproval of coverage of an  obesity drug, such as reporting outcomes (e.g., weight loss) while  using the drug.

Plans could require prior authorization to continue using an obesity  drug.

An individual may be able to try a different obesity drug covered by  the formulary.

For the largest employer-sponsored health care program in the United  States—FEHBP, managed by the Office of Personnel Management—we  found that some FEHBP plans offered by large insurers excluded obesity  drugs from coverage. We examined the formularies for 12 plans offered  by three large FEHBP insurers and found that the formularies for two  plans from one insurer indicated some type of coverage of obesity drugs  in 2018. One plan offered coverage for 50 percent of the plan’s allowed  amount for weight management drugs, and the other plan offered  coverage of two obesity drugs as tier 2 drugs, which have higher  copayments than tier 1 drugs.

For individually purchased health plans offered on health care exchanges,  nine of the 34 states with federally facilitated exchanges had at least one  plan in the silver tier of coverage that included some type of coverage for  obesity drugs in 2018, according to a 2018 study. The study found that  covered obesity drugs were generally the older drugs and that the newer  drugs tended to be covered with higher copayments or more likely to  require prior authorizations than other medications.

Two-Thirds of Obesity Drug Payments Were Made Out of Pocket; Adults Who Used Obesity Drugs Had Higher Average Estimated Medical Spending

Out-of-pocket payments from the patient or patient’s family made up two- thirds of the amounts paid for obesity drugs, according to nationally  representative estimates for 2012 through 2016. These amounts could  include insurance copayments and deductible amounts, and payments for  obesity drugs not covered by insurance. Private health insurance paid  about one quarter of the amount paid for obesity drugs, and Medicare and  other public health insurance paid the remainder. Average annual medical  spending and prescription drug spending were higher for adults who used  any of the nine obesity drugs than for those who did not, according to  these estimates. However, the differences in these estimates do not  establish any causal relationship between using obesity drugs and having  higher average annual medical or prescription drug spending.

Two-Thirds of Obesity Drug Payments Were Paid Out of Pocket by Patients; Phentermine Was Most Purchased

Out-of-pocket payments made up about two-thirds of total amounts paid  for obesity drugs for U.S. adults and private health insurance paid a  quarter, according to AHRQ’s nationally representative estimates from  MEPS data for 2012 through 2016. Medicare, Medicaid, and other  public health insurance paid the remainder; however, estimates for each  of these sources of payment are imprecise. (See fig. 2.) Similar to studies  on the use of obesity drugs, AHRQ’s estimates also found that 80 percent  of amounts paid for any of the nine obesity drugs was for one obesity  drug, phentermine, which is available as a generic drug.

We also examined available spending data from CMS on payments for  obesity drugs and found the following:

Medicare Part D prescription drug plans spent $19,714 for obesity  drugs in 2016 and $140,296 in 2017, according to our analysis of  CMS’s Prescription Drug Event data. These amounts include  Medicare Part D plan reimbursements for any of the nine obesity  drugs under enhanced alternative coverage. CMS’s data also showed  that total beneficiary spending—that is, the total amount Medicare  beneficiaries paid out of pocket as copayments or deductibles—for  any of these prescriptions totaled $4,048 in 2016 and $5,376 in  2017. See appendix VI for more information.

Total Medicaid state and federal spending—that is, reimbursement  amounts for the nine obesity drugs—was at least $5,017,424 in 2016  and $7,453,442 in 2017, according to our analysis of available data  from CMS’s Medicaid State Drug Utilization data. These amounts do  not include all Medicaid spending for obesity drugs under Medicaid  managed care. For example, if a Medicaid program pays a managed  care organization for drugs as part of their capitated payment for all  Medicaid services, they are not reimbursed on a per-drug basis, and  obesity drugs covered by Medicaid in that state would show up as a  $0 reimbursement amount in CMS’s Medicaid State Drug Utilization  data. According to CMS data, Medicaid spending for obesity drugs  was the greatest in California in 2016 and 2017. See appendix VII for  more information.

In addition, when the number of prescriptions dispensed are counted,  FDA’s estimates from 2017 IQVIATM data—which are projected nationally  from prescriptions dispensed in about 59,900 outpatient retail  pharmacies—found that most prescriptions dispensed for obesity drugs were paid for by private insurance. FDA’s analysis found that almost 64  percent of prescriptions dispensed for any of the nine obesity drugs was  paid for by private health insurance, and 35 percent of prescriptions  dispensed was paid for by cash (i.e., out-of-pocket) payments paid for by  the patient or their family in 2017. The remaining 1 percent of  prescriptions dispensed for obesity drugs was paid for by Medicare Part D  and Medicaid at an estimated 0.9 percent and 0.1 percent, respectively.

Adults Age 18 to 64 Who Used Obesity Drugs Had Higher Average Medical and Prescription Drug Spending Than Those Who Did Not

For all U.S. adults age 18 to 64, the estimated average annual medical  and prescription drug spending per adult was higher for those who used  an obesity drug than for those who did not use an obesity drug.  Specifically, the estimated average annual medical expenditures were  $7,575 per adult who used an obesity drug and $4,302 for those who did  not, according to AHRQ’s nationally representative estimates from MEPS  data for 2012 through 2016. Further, the estimated average annual  prescription drug expenditures per adult were $2,198 for those who used  an obesity drug and $1,111 for those who did not. However, these data  do not necessarily indicate that use of obesity drugs leads to higher  average annual medical and prescription drug spending.

For U.S. adults with obesity, there was not a significant difference  between the estimated average annual medical and prescription drug  expenditures per adult for those who used an obesity drug and those who  did not use an obesity drug. This may be due to the small sample size  of 279 adults with obesity who used an obesity drug in the MEPS data.  Appendix VIII provides more information on AHRQ’s estimated  expenditures for obesity drugs and other medical and prescription drug  spending. We did not identify any studies other than AHRQ’s estimates  from MEPS data that specifically addressed the medical spending for  adults who used obesity drugs compared to those who did not.

We provided a draft of this report to HHS for review and comment. HHS  provided technical comments, which we incorporated as appropriate.

We are sending copies of this report to the Secretary of Health and  Human Services, appropriate congressional committees, and other  interested parties. In addition, the report will be available at no charge on  the GAO Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-7114 or dickenj@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs are on the last page of this  report. GAO staff who made major contributions to this report are listed in  appendix IX.

Appendix I: Objectives, Scope, and Methodology

The Bipartisan Budget Act of 2018 included a provision for GAO to review  the prevalence of obesity and the use of obesity drugs in the Medicare  and non-Medicare populations, including spending for and coverage of  these drugs. We examined (1) the prevalence of obesity among adults in  the United States; (2) what is known about the use of obesity drugs and  the individuals who use them; (3) what is known about health insurance  coverage of obesity drugs; and (4) what is known about spending on  obesity drugs and about medical spending for adults who used obesity  drugs compared to those who did not.

To address our reporting objectives, we examined estimates from federal  agencies within the Department of Health and Human Services (HHS),  including the Centers for Disease Control and Prevention’s (CDC)  estimates from the National Health and Nutrition Examination Survey  (NHANES), the Agency for Health Care Research and Quality’s (AHRQ)  estimates from the Medical Expenditure Panel Survey (MEPS), and the  Food and Drug Administration’s (FDA) estimates from IQVIA and the  Sentinel System. We also analyzed Medicare Part D Prescription Drug  Event data and Medicaid State Drug Utilization data from the Centers for  Medicare & Medicaid Services (CMS). For each data source, we  examined the latest available data at the time of our review. In addition,  we conducted a literature review; interviewed officials and reviewed  documents from stakeholder organizations, federal agencies, insurers,  and others; and examined relevant laws and regulations.

National Health and Nutrition Examination Survey

We examined CDC’s nationally representative estimates from NHANES  of the prevalence of obesity among U.S. adults and use of obesity drugs.  NHANES is a cross-sectional survey designed to monitor the health and  nutritional status of the civilian, noninstitutionalized U.S. population. The  survey consists of interviews conducted in participants’ homes and  standardized physical examinations, including measured height and  weight, conducted in mobile examination centers. CDC analyzed data  from two 2-year cycles of NHANES (2013 through 2014 and 2015 through  2016) for the prevalence of obesity [defined as a body mass index (BMI)  of 30 or higher] for all adults by age (18 and older, 18 through 64, and 65  and older), health insurance coverage, and class of obesity. The  insurance categories were mutually exclusive: (1) Medicare, which  includes all adults who reported having Medicare, regardless of whether  they reporting having another type of health insurance (e.g., private  health insurance) in addition to Medicare; (2) private health insurance  (excluding individuals with Medicare); (3) Medicaid/public health  insurance (excluding Medicare); and (4) uninsured. We also examined  CDC’s estimates from NHANES on the prevalence of overweight (defined  as a BMI of 25 to <30) among U.S. adults. In addition, we examined  CDC’s estimates from NHANES for 2013 through 2016 on adults who  took prescription medications for weight loss. NHANES asks participants  if they tried to lose weight, and, for those who did, if they took diet pills  prescribed by a doctor. CDC’s estimates included the lower and upper  bounds of the 95 percent confidence intervals (the interval that would  contain the actual population value for 95 percent of the samples  NHANES could have drawn).

We examined AHRQ’s nationally representative estimates from MEPS  data on the use of and payment sources for obesity drugs. MEPS  collects nationally representative data on health care use, expenditures,  sources of payment, and insurance coverage for the U.S. civilian,  noninstitutionalized population. For this analysis, AHRQ estimated the  distribution of payments for obesity drugs using MEPS pooled data for  years 2012 through 2016. We also examined AHRQ’s estimates from  MEPS of annual expenditures for medical care and all prescription  drugs—for those individuals who used obesity drugs and those who did  not—and annual expenditures for obesity drugs. AHRQ’s estimates  included the lower and upper bounds of the 95 percent confidence  intervals.

We examined FDA’s nationally projected data on the prescriptions  dispensed for obesity drugs from outpatient retail pharmacies using 2017  IQVIA™ National Prescription Audit Extended Insights and IQVIA™ Total  Patient Tracker. IQVIA™ is proprietary data that includes data for  prescriptions dispensed at approximately 59,900 U.S. outpatient retail  pharmacies. FDA analyzed IQVIA data and provided aggregated results  for the nationally estimated number of prescriptions dispensed for the  nine obesity drugs from U.S. outpatient retail pharmacies, by payment  method. These patterns may not apply to other settings of care (e.g.,  mail-order or specialty pharmacies or clinics). In addition, the analysis  captures data when a prescription was dispensed; it does not indicate  that the patient took the obesity drug, and it does not indicate if the drug  was prescribed off label for something other than weight loss.

We examined FDA’s national estimates of prescriptions for obesity drugs  dispensed by outpatient pharmacies for new users of obesity drugs (by  number of days supplied and by age and gender of patient) from the  agency’s Sentinel System. FDA’s Sentinel System uses prescription  drug dispensing data from populations with federal or commercial  insurance to characterize drug utilization of a large U.S. population with  private and public health insurance. FDA examined drug dispensing data  from January 1, 2008, through December 31, 2017, from 17 of 18  Sentinel data partners, including Medicare, which contributed fee-for- service enrollee data. FDA analyzed dispensings for 267,836 new users  of the nine prescription obesity drugs. FDA estimated the duration of the  first treatment episode (in days) for patients’ prescription dispensings for  any of the nine obesity drugs using a 14-day episode gap—that is, if there  were more than 14 days between exhausting the previous dispensing’s  days supplied for that prescription and refilling the prescription, then FDA  counted it as a new treatment episode. FDA estimated cumulative  treatment duration by summing days’ supply of all dispensings of an  obesity drug during a patient’s presence in the database, without regard  to time between dispensings.

Medicare Part D Prescription Drug Event Data

For information on the number of claims for obesity drugs that were  reimbursed, the number of plans that provided reimbursement, and the  amount reimbursed for obesity drugs under the Medicare prescription  drug program known as Medicare Part D, we analyzed Medicare  Prescription Drug Event data from CMS for 2016 and 2017. We  analyzed Medicare Part D plan reimbursements (payments to  pharmacies) and beneficiary spending (the total amount Medicare  beneficiaries paid out of pocket as copayments or deductibles) for the  nine obesity drugs for claims that CMS’s data coded as reimbursed as a  supplemental drug under enhanced alternative coverage. We excluded  1,787 claims in 2016 and 1,775 claims in 2017 for one obesity drug,  orlistat (Xenical), that were listed in CMS’s data as covered under  Medicare Part D (and were not coded as a supplemental drug under  enhanced alternative coverage). According to CMS officials, orlistat has  off-label indications including diabetes and hyperlipidemia, and when  orlistat is used for these indications the drug would be covered under  Medicare Part D, and the Medicare Part D plan is responsible for  ensuring it is dispensed appropriately per Medicare Part D policy. We  also excluded 25 claims in 2016 and 26 claims in 2017 for prescription  obesity drugs listed as over-the-counter in the prescription drug event  data because, according to CMS, these appear to be outliers. Because  our analysis was limited to those instances in which a Medicare Part D  plan reimbursed for an obesity drug as a supplemental drug under  enhanced alternative coverage, the number of Medicare Part D plans that  provided coverage for obesity drugs could be higher. For example, some  plans may have covered obesity drugs, but none of the beneficiaries  enrolled in these plans filled a prescription for such a drug.

For information on obesity drugs reimbursed by state Medicaid programs  or Medicaid managed care programs within those states, we analyzed  CMS’s Medicaid State Drug Utilization data for 2016 and 2017. We  analyzed the data to estimate the number of prescriptions reimbursed and  total Medicaid state and federal spending—that is, the Medicaid amount  reimbursed (state and federal reimbursement, including dispensing  fees)—for the nine obesity drugs. These amounts do not include all  Medicaid spending for obesity drugs because managed care  organizations can be paid for the drugs as part of their capitated payment  for all Medicaid services, they are not reimbursed on a per-drug basis,  and their payments are not recorded in CMS’s Medicaid State Drug  Utilization data. Because our analysis was limited to those instances in  which Medicaid reimbursed for an obesity drug, the number of states in  which state Medicaid programs or Medicaid managed care plans provided  coverage for obesity drugs could be higher. For example, a state could  have provided coverage for obesity drugs, but no beneficiaries in that  state filled a prescription for an obesity drug.

Interviews with Officials in Stakeholder Organizations, Federal Agencies, Insurers, and Others

We obtained information and reviewed studies from officials from eight  stakeholder organizations (representing medical associations and  advocacy groups for obesity research and treatment) on the use of  obesity drugs and guidelines for using obesity drugs and to obtain their  perspectives on what physicians and other health care providers take into  consideration when prescribing these drugs, among other things. These  stakeholders were selected because of their medical or scientific  expertise, relevant publications, or familiarity with the treatment of obesity  and obesity drugs.

We also reviewed data and documents and interviewed officials from  HHS agencies: CDC, FDA, AHRQ, CMS, and the National Institutes of  Health. In addition, we reviewed guidance documents and obtained  information from the Office of Personnel Management, which administers  the Federal Employees Health Benefits program (FEHBP). FEHBP is the  largest employer-sponsored health insurance program in the United  States, providing health insurance coverage to about 8 million federal  employees, retirees, and their dependents in 2016 through contracts with  private health insurance plans.

We obtained information about the health insurance coverage of obesity  drugs from officials from the three largest pharmacy benefit managers,  four large insurers, and two organizations knowledgeable about  prescription drug benefits for employer-sponsored health plans. We also  reviewed drug formularies for selected private health insurance plans,  including FEHBP plans, to determine if any of the nine obesity drugs were  included.

We conducted a literature review of relevant peer-reviewed studies  published from January 2012 through January 2019. We identified studies  through a search of bibliographic databases, including ProQuest, Scopus,  MEDLINE, and International Pharmaceutical Abstracts , using terms such  as “obesity,” “weight loss,” and “prescriptions.” Of the 765 citations we  identified, we reviewed 220 full studies, which we examined for  information related to the use of obesity drugs and individuals who use them, coverage of obesity drugs, and spending for obesity drugs for  individuals who used them compared to those who did not. We  determined 19 studies were relevant to the use of obesity drugs and 1  study was relevant to coverage of obesity drugs. Our literature review  focused on studies with a U.S.-based, adult population (age 18 and  older); we excluded studies related to childhood obesity and studies on  animals. We also examined available information on the clinical trials  conducted prior to FDA approval of the prescription obesity drugs for the  U.S. market, including 64 studies from our literature review that  summarized one or more of the clinical trials. We also identified 17  additional studies in our literature review that provided relevant  background information.

Additionally, we reviewed five studies provided by stakeholder  organizations (in addition to the studies we had identified in our literature  review) that we determined were relevant to our research objectives, as  well as guidelines for the use of obesity drugs in obesity treatment.

To determine the reliability of the data we used for all four objectives— CDC’s estimates from NHANES, AHRQ’s estimates from MEPS, FDA’s  data from IQVIA and the Sentinel System, and CMS’s Medicare Part D  Prescription Drug Event data and Medicaid State Drug Utilization data— we reviewed documentation on data collection processes and discussed  limitations of the data with the relevant federal agency officials. In  addition, we conducted data reliability checks on the data, when  appropriate. We determined the data used in this report were sufficiently  reliable for our purposes.

Appendix II: List of FDA-Approved Prescription Obesity Drugs

Table 4 provides additional information on the nine prescription drugs  approved by the Food and Drug Administration (FDA) to treat obesity that  we included in our review.

Appendix III: Prevalence of Obesity and Overweight among U.S. Adults

This appendix presents national estimates of the prevalence of obesity  among U.S. adults age 18 and older, based on the Centers for Disease  Control and Prevention’s (CDC) estimates from the National Health and  Nutrition Examination Survey (NHANES) for 2013 through 2016. It  presents the estimates and the ranges for the 95 percent confidence  intervals for prevalence of obesity by age and class of obesity (see table  5), and by insurance coverage and class of obesity (see table 6). It also  presents national estimates of the prevalence of overweight (defined as a  body mass index of 25 to <30) among U.S. adults, by age and insurance  coverage (see table 7).

Appendix IV: List of Selected Studies Reviewed

Table 8 is a list of selected studies, categorized by specific topic area,  that we reviewed that pertain to our research objectives, including  information related to the use of obesity drugs and individuals who use  them, physician considerations in prescribing obesity drugs, and health  insurance coverage of obesity drugs. We identified these studies either  through our literature review of peer-reviewed studies published from  January 2012 through January 2019 or from one of the stakeholder  organizations we contacted.

Appendix V: Estimates of New Adult Users of Obesity Drugs, 2008-2017

This appendix presents estimates of prescriptions dispensed for new  adult users of obesity drugs by duration of use and by age and gender,  using data from the Food and Drug Administration’s (FDA) Sentinel  System from 2008 through 2017. Of the 267,836 new users of obesity  drugs included in this analysis, the first treatment episode did not exceed  30 days in about 54 percent of patients and exceeded 90 days in about  22 percent of patients. Cumulatively, about 42 percent of patients who  used any of the obesity drugs did so for more than 90 days across  treatment episodes. (See table 9.) Overall, most new users of obesity  drugs were female (82.2 percent) and under age 65 (91.7 percent). (See  table 10.)  Phentermine and bupropion/naltrexone (Contrave) were the  most commonly used obesity drugs in FDA’s Sentinel System analysis.

Appendix VI: Reimbursement for Obesity Drugs in Medicare Part D Enhanced Alternative Coverage, 2016 and 2017

This appendix presents information on Medicare Part D plan  reimbursement for obesity drugs under enhanced alternative coverage  from our analysis of Centers for Medicare & Medicaid Services’ (CMS)  Prescription Drug Event data. Medicare Part D plans can choose  whether or not to offer enhanced alternative coverage, and not all  Medicare Part D plans that provide enhanced alternative coverage cover  obesity drugs as supplemental drugs. As of February 2017, 1,949  Medicare Part D plans provided enhanced alternative coverage to 18.9  million Medicare beneficiaries, according to the Medicare Payment  Advisory Commission. Additionally, in 2015, total Medicare Part D  spending for prescription drugs was about $137 billion—this represents  payments from all payers including beneficiaries (cost sharing), and  excluding rebates and discounts from pharmacies and manufacturers that  are not reflected in prices at the pharmacies.

Tables 11 and 12 show the number of claims reimbursed, the number of  plans that provided reimbursement, and the amount reimbursed for  obesity drugs under Medicare Part D enhanced alternative coverage for  2016 and 2017, respectively.

Appendix VII: Reimbursement for Obesity Drugs in Medicaid, 2016 and 2017

This appendix presents information on Medicaid reimbursements for  obesity drugs under state Medicaid programs or Medicaid managed care  programs within those states from our analysis of Centers for Medicare &  Medicaid Services’ (CMS) Medicaid State Drug Utilization data. State  Medicaid programs or Medicaid managed care programs reimbursed for  at least one obesity drug prescription in 42 states in 2016 and 41 states in  2017. The amount that Medicaid reimbursed and the total number of  prescriptions for obesity drugs reimbursed by Medicaid in 2016 and 2017  are shown by state (tables 13 and 14), and by obesity drug (tables 15 and  16). Over half of the prescriptions for obesity drugs reimbursed under  Medicaid in 2016 and 2017 were for the generic obesity drug,  phentermine.

Appendix VIII: Estimates of Medical and Prescription Drug Expenditures for Adults Who Used and Did Not Use Obesity Drugs

This appendix presents nationally representative estimates of U.S. adults’  average annual expenditures (spending) for medical care, all prescription  drugs, and for obesity drugs from the Agency for Healthcare Research  and Quality (AHRQ) based on data from the Medical Expenditure Panel  Survey (MEPS) for 2012 through 2016. Table 17 shows the estimated  average annual expenditures for all prescription drugs and table 18  shows the estimated average annual medical expenditures, including  prescription drugs, per adult who used and per adult who did not use any  obesity drugs. For adults age 18 to 64, the differences in the estimated  average annual expenditures for all medical care and for all prescriptions  drugs per adult who used and who did not use any of the nine obesity  drugs in our review were statistically significant. However, the  differences in these estimates do not indicate that there was a causal  relationship between using obesity drugs and having higher average  annual medical or prescription drug expenditures. Table 19 shows the  estimated average annual expenditures per adult for obesity drugs.

Appendix IX: GAO Contact and Staff Acknowledgments

In addition to the contact above, Kim Yamane (Assistant Director), Lisa A.  Lusk (Analyst-in-Charge), George Bogart, Zhi Boon, Kaitlin Dunn, Laurie  Pachter, and Merrile Sing made key contributions to this report. Also  contributing to this report were Alexander Cattran, Leia Dickerson, Diona  Martyn, Christina Ritchie, and Ethiene Salgado-Rodriguez.

About 38% of U.S. adults have obesity and are at risk of developing conditions like heart disease, which are associated with increased risk of death.

There are nine FDA-approved drugs to help treat obesity. Among U.S. adults with obesity, relatively few (about 660,000/year) used an obesity drug, according to estimates for 2012–2016.

Health insurance plans might not cover obesity drugs. Some Medicare and Medicaid plans, and others that cover the drugs, may require prior authorization or may have patients try other treatment options first. However, out-of-pocket payments from the patient or their family made up most payments for these drugs.


U.S. Virgin Islands Recovery: Status of FEMA Public Assistance Funding and Implementation

In September 2017, two major hurricanes—Irma and Maria—struck the USVI, causing billions of dollars in damage to its infrastructure, housing, and economy. FEMA—a component of the Department of Homeland Security—is the lead federal agency responsible for assisting the USVI as it recovers from these natural disasters. Among other responsibilities, FEMA administers the Public Assistance program in partnership with the USVI territorial government, providing the USVI grant funding for response and recovery activities, including debris removal efforts, life-saving emergency protective measures, and the repair, replacement, or restoration of public infrastructure.

GAO was asked to review the federal government's response and recovery efforts related to the 2017 hurricanes. This report describes (1) the status of FEMA's Public Assistance program funding provided to the USVI in response to the 2017 hurricanes as of October 1, 2018, and (2) the USVI's transition to implementing the Public Assistance alternative procedures in the territory. GAO reviewed program documents and data on obligations and expenditures as of October 1, 2018, and interviewed officials from FEMA and the USVI regarding the Public Assistance program specifically and disaster recovery efforts more generally. GAO also conducted site visits to the USVI islands of St. Croix, St. Thomas, and St. John.

GAO is not making any recommendations in this report, but will continue to monitor the progress of the USVI's recovery as part of its ongoing work.

The Federal Emergency Management Agency (FEMA) obligated more than $1.4 billion in grant funding for Public Assistance projects in the U.S. Virgin Islands (USVI) as of October 1, 2018, in response to the 2017 hurricanes. FEMA obligated about $873.8 million for emergency work—debris removal activities and emergency measures to lessen the immediate threat to life, public health, and safety—and about $516.3 million for permanent work—including the repair or replacement of public infrastructure such as roads, electrical utilities, and schools. For example, FEMA obligated about $101 million for the purchase and installation of modular units to be used as temporary classrooms and other facilities while permanent school buildings are repaired or replaced. FEMA's obligations for permanent work also included funding for hazard mitigation measures to reduce the risk of damage during future storms—for example, by replacing wooden utility poles with composite fiberglass poles (see figure).

FEMA and the USVI are transitioning from using the standard Public Assistance program in the territory to using the Public Assistance alternative procedures program. Unlike in the standard Public Assistance program where FEMA will fund the actual cost of a project, the alternative procedures allow awards to be made on the basis of fixed-cost estimates to provide financial incentives for the timely and cost-effective completion of permanent work projects. FEMA and USVI officials stated that the alternative procedures will give the USVI more flexibility in determining when and how to fund projects and provide an opportunity to repair and rebuild the USVI's critical services infrastructure—such as its education system and electrical grid—so it meets industry standards without regard to pre-disaster condition. As of November 2018, FEMA and USVI officials were discussing the process for developing projects under the Public Assistance alternative procedures. GAO will continue to monitor the USVI's plans for using the alternative procedures as part of its broader review assessing the USVI's disaster recovery efforts and will issue a follow-on report later this year.

In the span of 14 days in September 2017, two Category 5 hurricanes— Irma and Maria—struck the territory of the U.S. Virgin Islands (USVI),  causing billions of dollars in damage to its infrastructure, housing, and  economy. These disasters exacerbated an already difficult financial  situation in the USVI, which was operating under severe fiscal constraints  prior to the storms.

The Federal Emergency Management Agency (FEMA)—a component of  the Department of Homeland Security (DHS)—is the lead federal agency  responsible for disaster preparedness, response, and recovery, which  includes assisting the USVI as it recovers from these natural disasters.  Among other responsibilities, FEMA administers the Public Assistance  program in the USVI through a partnership with the territorial government  and provides grant funding for a wide range of eligible response and  recovery activities. These activities include debris removal efforts, life- saving emergency protective measures, and the repair, replacement, or  restoration of disaster-damaged publicly-owned facilities, electrical  utilities, roads and bridges, and more. Further, in July 2018, FEMA  approved the USVI government’s request to use the Public Assistance  alternative procedures program in the territory that offers financial  incentives for the timely and cost-effective completion of permanent work.

You asked us to review the federal government’s response and recovery  efforts related to the 2017 hurricanes. As part of that effort, we have  several reviews ongoing of FEMA’s and the USVI government’s disaster  recovery planning, oversight, and execution efforts in the USVI. In this  report, we discuss:  1.  the status of FEMA Public Assistance program funding provided to the  USVI in response to the 2017 hurricanes as of October 1, 2018— more than 1 year after hurricanes Irma and Maria impacted the  territory; and  2.  the USVI’s transition to implementing FEMA’s Public Assistance  alternative procedures program in the territory.

Another review will examine disaster recovery efforts in the USVI and we  plan to issue that report later this year. In addition, we are conducting a  broader body of work covering various disaster response and recovery  issues, including disaster recovery in impacted states in the contiguous  United States and Puerto Rico, and will be reporting on these issues over  the next year.

For this report, we reviewed relevant documentation on FEMA’s Public  Assistance program—including the April 2018 Public Assistance Program  and Policy Guide and the September 2018 Public Assistance Alternative  Procedures Permanent Work Guide for the USVI. We also obtained and  analyzed data from FEMA’s Emergency Management Mission Integrated  Environment and Integrated Financial Management Information System  on Public Assistance program obligations and the USVI’s expenditures as  of October 1, 2018. An obligation is a definite commitment that creates a  legal liability of the government for the payment of goods and services  ordered or received. For the purposes of this report, obligations represent  the amount of grant funding FEMA provided through the Public  Assistance program for specific projects in the USVI. An expenditure is an  amount paid by federal agencies, by cash or cash equivalent, during the  fiscal year to liquidate government obligations. For the purposes of this  report, an expenditure represents the actual spending by the USVI  government of money obligated by the federal government. We  interviewed FEMA officials, including those stationed in the USVI, as well  as officials from the USVI’s Governor’s office, the USVI’s Territorial  Emergency Management Agency, the USVI’s Department of Finance,  and contractor personnel regarding the implementation of the Public  Assistance program in the territory. Further, in May and October of 2018,  we conducted site visits to the USVI islands of St. Croix, St. Thomas, and  St. John to observe hurricane-damaged areas and eligible Public  Assistance projects, as well as disaster assistance funding from other  federal departments.

We assessed the reliability of the Emergency Management Mission  Integrated Environment and the Integrated Financial Management  Information System data by reviewing existing information about these  systems, interviewing data users and managers responsible for these  data, and cross-checking data across sources to ensure consistency.  Based on these steps we determined these data to be sufficiently reliable  for the purposes of this report.

We conducted this performance audit from October 2018 through  February 2019 in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.

In September 2017, two Category 5 hurricanes struck the USVI, causing  catastrophic damage across the entire territory and neighboring  Caribbean islands. On September 6, 2017, Hurricane Irma struck St.  Thomas and St. John and on September 19, 2017, Hurricane Maria  struck St. Croix (see fig. 1).

The storms severely damaged the territory’s critical infrastructure,  devastating more than 90 percent of aboveground power lines and  shutting down electricity and telecommunications for months. Further, 52  percent of the territory’s housing units were damaged, ports and airports  were closed for weeks, and hundreds of thousands of tons of debris were  generated, often blocking roads and making transportation hazardous. In  addition, according to a September 2018 report from the USVI Hurricane  Recovery and Resilience Task Force, the territory’s economic activity— especially tourism—was severely reduced in the months following the  storms, leading to job losses and a total estimated economic impact of  $1.54 billion.

In response to the request of the Governor of the USVI, the President  declared a major disaster the day after each hurricane struck the  territory. Major disaster declarations can trigger a variety of federal  response and recovery programs for government and nongovernmental  entities and households and individuals, including assistance through the  Public Assistance program. Under the National Response Framework  and National Disaster Recovery Framework, DHS is the federal  department with primary responsibility for coordinating disaster response  and recovery, and within DHS, FEMA has lead responsibility. The  Administrator of FEMA serves as the principal adviser to the President  and the Secretary of Homeland Security regarding emergency  management.

FEMA’s Public Assistance program provides funding to state, territorial,  local, and tribal governments as well as certain types of private nonprofit  organizations to assist with responding to and recovering from major  disasters or emergencies. As shown in figure 2, Public Assistance  program funds are categorized broadly as “emergency work” or  “permanent work.” Within these broad categories are separate  subcategories. In addition to the emergency work and permanent work  categories, the program includes category Z, which represents indirect  costs, administrative expenses, and other expenses a recipient or  subrecipient incurs in administering and managing the Public Assistance  program that are not directly chargeable to a specific project.

FEMA’s Public Assistance program also provides funding for cost- effective hazard mitigation measures to reduce or eliminate the long-term  risk to people and property from future natural and man-made disasters  and their effects. Specifically, FEMA provides funding for hazard mitigation measures in conjunction with the repair of disaster-damaged  facilities to enhance their resilience during future disasters. For example,  a community that had a fire station damaged by a disaster could use  Public Assistance funding to repair the facility and incorporate additional  measures such as installing hurricane shutters over the windows to  mitigate the potential for future damage.

Once the President has declared a disaster, FEMA, the state or territorial  government (the recipient), and local or territorial entities (the  subrecipient) work together to develop damage assessments and  formulate project worksheets for eligible projects. Project worksheets  detail the scope of work and estimated cost for repairing or replacing  disaster-damaged infrastructure as well as any hazard mitigation  measures that may help to increase the resilience of this infrastructure  during future disasters. After a project has completed FEMA’s review  process and is approved, FEMA obligates funding for the project by  placing money into an account where the recipient has the authority to  draw down—or withdraw—funding to pay the subrecipient for eligible  work upon completion (see fig. 3).

In addition, a state or territorial governor may designate a governor’s  authorized representative (GAR) to oversee all aspects of disaster  assistance, including Public Assistance funding. Specifically, the GAR is  responsible for ensuring compliance with program requirements by  providing oversight into how goods and services are procured for  projects, such as construction materials or modular school units. The  GAR also confirms that subrecipients submit complete documentation  demonstrating that all work completed is in accordance with a project’s  approved scope of work and Public Assistance program requirements.  The GAR then approves the paperwork and the recipient can draw down  funding from the account holding the obligations to reimburse  subrecipients for completed work. When a project has been completed,  FEMA conducts a close-out process to certify that all work has been  completed and reconciles the actual cost incurred. If the actual cost of the  completed work is greater than the amount of money FEMA obligated for  the project, FEMA will reimburse the subrecipient for these additional  costs.

FEMA’s Public Assistance Alternative Procedures Program

The Sandy Recovery Improvement Act of 2013 authorized the use of  alternative procedures in administering the Public Assistance program,  thereby providing new flexibilities to FEMA, states, territories, and local  governments for debris removal, infrastructure repair, and rebuilding  projects using funds from this program. Unlike in the standard Public  Assistance program where FEMA will fund the actual cost of a project, the  Public Assistance alternative procedures allow awards for permanent  work projects to be made on the basis of fixed-cost estimates to provide  financial incentives for the timely and cost-effective completion of work.

Under these procedures, if the actual cost of the project exceeds the  fixed-cost estimate agreed upon by FEMA and the recipient, the recipient  or subrecipient is responsible for the additional costs at the time of the  close-out process. However, if the actual cost of completing eligible work  for a project is below the estimate, the recipient may use the remaining  funds for additional cost-effective hazard mitigation measures to increase  the resilience of public infrastructure. In addition, these funds may also be  used for activities that improve the recipient’s or subrecipient’s future  Public Assistance operations or planning.

FEMA Had Obligated More Than $1.4 Billion and the USVI Had Expended About $587 Million in Public Assistance Funding as of October 1, 2018

As of October 1, 2018, FEMA had obligated more than $1.4 billion  through the standard Public Assistance program for 475 projects across  the USVI. As shown in figure 4, FEMA obligated funding for both  emergency work and permanent work projects.

As of October 1, 2018, of the more than $1.4 billion FEMA obligated, the  USVI had expended approximately $586.9 million—about 41 percent of  total Public Assistance program obligations to the USVI—to reimburse  subrecipients for completed work. Of this $586.9 million, the USVI had  expended about $532.8 million (91 percent) for emergency work projects  in categories A and B and $49.1 million (8 percent) for permanent work  projects in categories C through G. The majority of FEMA’s obligations  and the funding the USVI expended as of October 1, 2018, are for  emergency work because these projects began soon after the disasters  struck and focused on debris removal and providing assistance to  address immediate threats to life and property. In contrast, permanent  work projects take time to identify, develop, and ultimately complete as  they represent the longer-term repair and restoration of public  infrastructure.

Emergency work. Of the more than $1.4 billion FEMA had obligated as  of October 1, 2018, about $873.8 million (60 percent) was obligated for  322 emergency work projects in Public Assistance categories A and B.

Category A: Debris Removal. FEMA obligated about $94.0 million for  71 projects focused on debris removal activities across the territory.

For example, FEMA obligated $45.0 million to the USVI Department  of Public Works for territorywide debris removal efforts and $39.1  million to the USVI Water and Power Authority for these activities in  St. Croix (see fig. 5). Of the $94.0 million FEMA obligated for debris  removal, the USVI had expended about $54.6 million (58 percent) as  of October 1, 2018.

Category B: Emergency Protective Measures. FEMA obligated about  $780 million for 251 projects focused on emergency measures. For  example, FEMA obligated about $187 million for the Sheltering and  Temporary Essential Power program, which is intended to provide  essential repairs or restore power to private residences to allow  affected individuals to return or remain in their homes, thereby  reducing the demand for other shelter options. In addition, FEMA  obligated approximately $101 million for the purchase and installation  of modular units to be used as temporary classrooms and other  facilities while permanent school buildings are repaired or replaced  (see fig. 6). Of the $780 million FEMA obligated for emergency  protective measures, the USVI had expended about $478 million (61  percent) as of October 1, 2018.

Permanent work. Of the more than $1.4 billion in Public Assistance  funding FEMA had obligated as of October 1, 2018, about $516.3 million  (36 percent) was obligated for 153 permanent work projects across  categories C through G. These permanent work projects include about  $349.4 million for cost-effective hazard mitigation measures aimed at  reducing the future risk of disaster-damaged facilities in conjunction with  their repair. Further, of the $516.3 million FEMA obligated for permanent  work in the USVI, approximately $500.4 million—or 97 percent of all  permanent work obligations—was obligated to the USVI Water and  Power Authority for the permanent repair of electrical distribution systems  and other utilities across the territory.

Category C: Roads and Bridges. FEMA obligated about $5.2 million  for 35 projects focused on repairing roads and bridges in the territory,  18 of which included hazard mitigation measures totaling about $1.5  million. For example, FEMA obligated about $410,000 for one project  to repair a road on St. Thomas damaged by floodwaters. This project  included approximately $227,000 for hazard mitigation measures,  such as replacing the damaged road surface with reinforced concrete  and building a retaining wall. As of October 1, 2018, the USVI had not  expended funding in this category.

Category D: Water Control Facilities. As of October 1, 2018, FEMA  did not have any projects in this category. According to FEMA  officials, the USVI does not have water control infrastructure that  would fall under category D, such as dams, levees, or berms.

Category E: Buildings and Equipment. FEMA obligated $6.0 million for  77 projects focused on repairing and rebuilding damaged buildings  and equipment, 16 of which included hazard mitigation measures  totaling about $1.8 million. For example, FEMA obligated about $1.5  million to repair damage to the airport terminal building in St.  Thomas—a project where hazard mitigation measures comprised 87  percent of the project’s total cost (see fig. 7). These measures include  replacing the terminal’s roof with materials designed to withstand  higher wind speeds to increase the building’s resilience during future  storms. Of the $6.0 million FEMA obligated for category E, the USVI  had expended about $148,000 (2.5 percent) as of October 1, 2018.

Category F: Utilities. Of the $516.3 million FEMA obligated for  permanent work projects, $502.2 million (97 percent) was obligated  for 15 projects focused on repairing utilities, 7 of which included  hazard mitigation measures totaling about $346.0 million. For  example, FEMA obligated $286.1 million and $50.2 million for  permanent electrical distribution system repairs in St. Croix and St.  John, respectively. This includes replacing damaged wooden utility  poles with more resilient composite fiberglass poles that can  withstand 200 mile per hour winds as well as power transmission lines  and transformers (see fig. 8). Of the $502.2 million FEMA obligated  for category F, the USVI had expended about $49.0 million (10  percent) as of October 1, 2018.

Category G: Parks, Recreational, and Other Facilities. FEMA  obligated about $2.9 million for 26 projects focused on repairing  parks, playgrounds, and other recreational facilities, 1 of which  included hazard mitigation measures. Specifically, FEMA obligated  about $453,000 to repair the Lindbergh Park and Water Playground in  St. Thomas—a project that included about $18,000 for hazard  mitigation measures. As of October 1, 2018, the USVI had not  expended funding in this category.

Future projects. In addition to the more than $1.4 billion in Public  Assistance funding FEMA had obligated as of October 1, 2018, FEMA  expected to review an additional 900 future projects for eligibility  representing an estimated $779.4 million in potential funding. Of this  estimated total amount, FEMA anticipates $128.5 million (16 percent) in  costs for future emergency work projects and $650.9 million (84 percent)  in costs for future permanent work projects.

FEMA and the USVI Are Transitioning From the Standard Public Assistance Program to the Public Assistance Alternative Procedures Program

In July 2018, FEMA approved a June 2018 request from the Governor of  the USVI to transition to using the Public Assistance alternative  procedures program for permanent work in the territory. The alternative  procedures provide new flexibilities to FEMA and the USVI that are not  available through the standard Public Assistance program. In September  2018, FEMA issued the Public Assistance Alternative Procedures  Permanent Work Guide for the USVI to provide guidance on the  implementation of the program in the territory. FEMA and USVI officials  stated that a section of the Bipartisan Budget Act of 2018 and the  flexibilities provided by the program itself influenced the USVI’s decision  to transition to using the alternative procedures.

First, Section 20601 of the Bipartisan Budget Act of 2018 authorized  FEMA, when using the Public Assistance alternative procedures, to  provide assistance to fund the replacement or restoration of disaster- damaged infrastructure that provide critical services to industry standards  without regard to pre-disaster condition. FEMA and USVI officials told  us that the territory therefore has a valuable opportunity to use the  alternative procedures to repair and rebuild its critical services  infrastructure—including the USVI’s education system, electrical grid, and  emergency medical care system, among others—so it is in a better  condition than it was prior to the 2017 hurricanes. Second, USVI  officials stated that under the standard Public Assistance program  currently being used in the USVI, the territorial government is responsible  for providing the initial funding to reimburse subrecipients for completed  work prior to drawing down funds from the account holding the FEMA- obligated amounts of money for each project. They explained that  because of the financial liquidity challenges facing the territory, this  process was problematic and required USVI officials to prioritize projects  based on the availability of the territory’s funding. USVI officials stated  that the Public Assistance alternative procedures will help to address this  challenge by providing the territory with more flexibility regarding when  and how to fund projects. For example, in certain cases, the USVI is able  to consolidate permanent work projects approved under the alternative  procedures and share obligated funding across these projects. In  addition, the USVI is able to use any excess funds for cost-effective  hazard mitigation measures or for activities that improve the recipient’s or  subrecipient’s future Public Assistance operations or planning.

As of November 2018, FEMA and USVI officials stated they were working  to identify and develop permanent work projects using the Public  Assistance alternative procedures and discussing the process for  developing the fixed-cost estimate for each project. Specifically, unlike in  the standard Public Assistance program where FEMA will fund the actual  cost of a project, the Public Assistance alternative procedures use a  fixed-cost estimate which is agreed to prior to obligation and the USVI will  be financially responsible for any actual costs that exceed this amount.  Given the USVI’s difficult fiscal situation, FEMA and USVI officials stated  that ensuring these fixed-cost estimates are as accurate as possible will  be critical. However, FEMA officials also noted that if FEMA and the  territory cannot come to an agreement on a fixed-cost estimate for any  given project, the USVI does have the option to move forward through the  standard Public Assistance program. According to FEMA’s Public  Assistance Alternative Procedures Permanent Work Guide for the USVI,  all cost estimates for projects using these procedures must be finalized by  March 2020. We will continue to monitor the USVI’s plans for using the  alternative procedures as part of our broader work assessing disaster  recovery efforts in the USVI and will issue a follow-on report later this  year.

We provided a draft of this report to DHS and the USVI government. We  requested comments from DHS and the USVI government, but none were  provided. DHS did provide technical comments, which we incorporated as  appropriate.

We are sending copies of this report to the appropriate congressional  committees, the Secretary of Homeland Security, the Administrator of  FEMA, the USVI government, and other interested parties. In addition,  the report is available at no charge on the GAO website at  http://www.gao.gov.

If you and your staff have any questions, please contact me at (202) 512- 8777 or curriec@gao.gov. GAO staff who made key contributions to this  report are listed in appendix II.

Appendix I: GAO Contact and Staff Acknowledgments

Chris Currie, 202-512-8777 or curriec@gao.gov.

In addition to the contact named above, Joel Aldape (Assistant Director),  Bryan Bourgault, Leanna Diggs, Aaron Gluck, Eric Hauswirth, Brian  Lipman, Amanda Miller, Heidi Nielson, and Kevin Reeves made key  contributions to this report.

In September 2017, two major hurricanes hit the U.S. Virgin Islands, causing billions of dollars in damage.

We reviewed the federal response and recovery efforts. The Federal Emergency Management Agency:

Provided $1.4 billion in grant funding to help repair damaged public infrastructure. About $874 million went for emergency work, such as debris removal. About $516 million went for permanent work, such as repairing roads and the electrical grid.

Has started using alternative procedures for providing funding that allows incentives for timely, cost-effective work on permanent projects.