Biden administration proposes Medicare, Medicaid coverage of obesity drugs
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The news: The Biden administration is proposing to expand Medicare and Medicaid coverage to include weight-loss drugs, potentially giving 7.5 million Americans access to expensive treatments like Novo Nordisk’s Wegovy and Eli Lilly’s Mounjaro, in one of its last major policy directives.
The context: The White House says out-of-pocket costs for patients could drop by as much as 95%. Currently, Medicare covers these drugs – with costs of as much as USD1,000 ($1,540) a month for the uninsured – only for conditions like diabetes, not for obesity itself.
The proposal must still undergo a formal review process and may face challenges under the incoming Trump administration, which may face pressure to finalise the costly benefit.
Critics, including Trump’s nominee to head the Department of Health and Human Services, Robert Kennedy Jr, have questioned the emphasis on drugs over other obesity solutions.
The numbers: The proposal, which could take effect in 2026, is expected to cost USD35 billion ($53.91 billion) over nine years, according to a recent report by the Congressional Budget Office.
Novo and Eli Lilly, emerging from recent supply shortages, could see demand skyrocket, if the rule is finalised. Eli shares rose 4.7% in pre-market trading, and Novo shares were up 2.25% ahead of the open.
What they said: “This proposal would allow Americans and their doctors to determine the best path forward so they can lead healthier lives, without worrying about their ability to cover these drugs out-of-pocket, and ultimately reduce health care costs to our nation,” the White House said in a statement.
"This is an important step forward for patients," Novo Nordisk said in a statement.
Last month, Kennedy told Fox News that the companies producing the drugs, “They’re counting on selling it to Americans because we’re so stupid and so … addicted to drugs.”
Mehmet Oz, the TV personality and cardiothoracic surgeon whom Trump tapped to lead Medicare and Medicaid Services has repeatedly praised weight-loss drugs.
“[F]or those who want to lose a few pounds, Ozempic and other semaglutide medications can be a big help,” Oz said on Instagram last year. “We need to make it as easy as possible for people to meet their health goals, period.”
The sources: White House statement , Reuters , CNN , The Washington Post , Bloomberg
