Team Metabolic Health
U.S. President Joe Biden on Tuesday proposed expanding coverage of anti-obesity drugs, like Novo Nordisk’s (NOVOb.CO), opens new tab Wegovy, for more than 7 million people with Medicare and Medicaid health coverage, which could cut out-of-pocket expenses for some by as much as 95%.
This would enable more Americans to afford new weight loss medications in the GLP-1 class that have been shown to reduce weight by as much as 20% on average and can help prevent type 2 diabetes but cost as much as $1,000 a month without insurance coverage. The drugs have also been shown in trials to lower the risk of heart attacks and cardiovascular-related death.
Injection pens and boxes of Novo Nordisk’s weight-loss drug Wegovy are shown in this photo illustration in Oslo, Norway, November 21, 2023. REUTERS/Victoria Klesty/File Photo
Current rules for the Medicare government health insurance program cover the use of GLP-1 drugs such as Eli Lilly’s (LLY.N), opens new tab Mounjaro and Novo’s Ozempic for conditions like diabetes, but not the versions of those drugs like Wegovy that have been approved to treat obesity as a condition on its own.
Medicaid programs, which are state-run, can cover the drugs but many choose not to.
Lilly’s shares were up 4.4%, while Novo’s U.S.-listed shares were up around 1.5% in afternoon trading.
The proposed regulation, which was posted on the Federal Register by the Department of Health and Human Services on Tuesday, would require Medicare to cover these drugs as a treatment for obesity, expanding access for an estimated 3.4 million Americans with Medicare.
It would also expand access to the medications for approximately 4 million adult Medicaid enrollees, according to the White House.
The program would be effective starting in 2026 if President-elect Donald Trump’s incoming administration backs the move; the rule’s comment period is open until Jan. 27, after the inauguration. Robert F. Kennedy Jr., Trump’s choice for health secretary, has said that America should tackle obesity through healthy eating, not medicine.
“This is setting up a political landmine for the Trump administration,” said Ge Bai, professor of health policy and management at Johns Hopkins University.
Because the incoming administration is going to be under pressure to cut costs, Bai said the move could help critics on the left build a narrative that Trump is taking away important health benefits.
Indeed, Democratic Senator Ron Wyden said on Tuesday that he was pleased to see the broader coverage and would be watchdogging the Trump administration to ensure there is no backsliding.
Credit: Reuters