Biden administration proposes coverage for obesity drugs through Medicare
- The Biden administration proposed a rule change that would enable Medicare and Medicaid to cover obesity drugs starting in 2026.
- Eli Lilly's Zepbound is among the key treatments that may gain coverage under this new proposal.
- If implemented, this change could substantially enhance access to obesity treatments for millions of Americans.
In a significant move for public health, the Biden administration announced a proposed rule that would allow Medicare and Medicaid to cover obesity drugs starting in 2026. This change is anticipated to impact millions of Americans who are enrolled in these government health programs, providing them access to treatments like Eli Lilly's Zepbound and Novo Nordisk's Wegovy. According to a fact sheet from the Centers for Medicare and Medicaid Services, the coverage will be applicable for anti-obesity medications intended to reduce excessive body weight and support long-term weight management. Currently, many states, including New York and Texas, do not offer any coverage for obesity treatments, highlighting the potential wide-reaching benefits of this proposal. In addition to this positive development, Eli Lilly also benefitted from news of Amgen's experimental obesity drug, MariTide, which has shown disappointing mid-stage trial results. Although analysts are mixed about MariTide's competition with Zepbound, Jim Cramer viewed the trial data as less impactful compared to Eli Lilly's offerings. The industry is currently under scrutiny, especially as Robert F. Kennedy Jr., known for his critical stance on obesity medications, has been nominated to lead the Health and Human Services Department. Despite these challenges, the overall narrative for Eli Lilly has shifted positively with the proposed changes that would likely enhance their market position and financial outlook within the obesity treatment landscape.