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Vivus (NASDAQ:VVUS) announced Monday in an 8K filed with the SEC that it has entered into amended insurance agreements with Express Scripts (NASDAQ:ESRX) and Medco Health Solutions (NYSE:MHS). The change makes the anti-obesity drug Qsymia available on tier 2 or tier 3 for insurers that offer anti-obesity drugs in their design. Essentially, a patient with coverage in the tier 2 category would be expected to fund a co-pay of between $25 to $30 per month for a prescription.

VIVUS, Inc., or VIVUS, entered into an Amendment to the Preferred Savings Grid Rebate Program Agreement with Express Scripts, Inc., or ESI, whereby effective July 1, 2013 Qsymia® will be available in either a tier-2 or tier-3 position for those clients of ESI that offer obesity drugs in their benefit design. Under the Amendment, patients with benefits where Qsymia is offered on tier-2 should expect to pay an estimated $25.00 to $30.00 co-payment for a monthly prescription of Qsymia.

VIVUS also entered into an Amendment to the Commercial Rebate Agreement with Medco Health Solutions, Inc., or Medco, whereby effective July 1, 2013 Qsymia will be available in either a tier-2 or tier-3 position for those clients of Medco that offer obesity drugs in their benefit design. Under the Amendment, patients with benefits where Qsymia is offered on tier-2 should expect to pay an estimated $25.00 to $30.00 co-payment for a monthly prescription of Qsymia.

Insurance coverage, and more specifically, patient cost is perhaps one of the biggest hurdles facing the anti-obesity drugs Qsymia and Arena's (NASDAQ:ARNA) Belviq. It is estimated that only 30% to 35% of covered lives currently offer a benefit for anti-obesity drugs. Both Vivus and Arena have been working diligently to get more insurers to cover drugs. Both companies are also offering discount programs to help encourage sales.

The bottom line for both Vivus and Arena is impacted by discounts that may not have been offered if insurance coverage was more widely available. Last month the AMA voted to classify obesity as a disease, which many feel is a big step in getting broader insurance coverage.

For investors, any positive traction in the insurance space is a win. Insurance coverage has a two pronged benefit of increasing prescription levels, while at the same time allowing the companies to reduce the use of rebates and discounts. Any positive news regarding insurance should be seen as carrying an immediate impact revenue.

While this particular 8K was filed by Vivus, it is a pretty safe assumption that Arena's Belviq will get similar treatment in short order if not in conjunction with any Qsymia announcement. In contrast, any insurance coverage progress announced by Arena will also likely benefit Vivus. For this reason it is important that if you are invested in this sector that you follow the news flow announced by either company.

While insurance news may not seem as noteworthy as prescription numbers, it is perhaps far more important. As stated, broadening insurance coverage carries longer term benefits for these companies. Stay tuned.

Source: Vivus Offers Positive Insurance News

Additional disclosure: I have no position in Vivus.