U.S. Considers Pilot Program for Weight-Loss Drug Coverage

The Trump administration is exploring a five-year pilot program to include weight-loss drugs under Medicare and Medicaid, as reported by the Washington Post. Citing documents from the Centers for Medicare and Medicaid Services, the report highlights potential coverage of medications such as Novo Nordisk's Wegovy and Ozempic, along with Eli Lilly's Zepbound and Mounjaro. While these drugs have demonstrated the ability to reduce body weight by 15% to 20% in trials, their annual costs of $5,000 to $7,000 pose concerns about long-term affordability.

This potential shift in federal policy follows an earlier decision by the administration to reject a Biden-era proposal for drug coverage. Analysts, like Ryan MacDonald from Needham, see it as a significant departure from the previous focus on cost containment. Currently, 13 states offer Medicaid coverage for these medications, while Medicare restricts coverage to certain approved conditions. The proposed CMS initiative would launch a Medicaid pilot in April 2026 and a Medicare pilot in January 2027, broadening access to weight-loss treatments.

Novo Nordisk and Eli Lilly spokespersons emphasize the necessity of comprehensive coverage for affordable care, while industry analysts see upbeat prospects for companies like Lilly. As Lilly's shares rise, telehealth provider Hims & Hers Health witnesses a decline amid concerns that expanded public drug coverage might lessen demand for their alternatives.

(With inputs from agencies.)