Shares of Novo Nordisk and Eli Lilly dipped despite a Thursday report that Medicare could pay for weight-loss drugs for some members.
According to the Wall Street Journal, the Centers for Medicare and Medicaid Services said Part D drug benefits plans — which are administered by private insurers — could pay for weight-loss drugs for patients who have a history of heart disease or are at risk of recurring heart attacks or strokes. The agency notified health plans on Wednesday of the rule change.
On the stock market today, Novo Nordisk stock sank a fraction to 129.83. Eli Lilly stock also fell 0.3% to 770.26.
Rule Reversal For Weight-Loss Drugs
The action reverses a long-standing rule that excludes weight-loss drugs from Medicare coverage. That meant people with Part D plans, which includes mostly older people, have had to pay out of pocket for Wegovy. Wegovy has a list price of about $1,350 for a month's supply.
This month, the Food and Drug Administration approved Wegovy as a means of lowering the risk of heart attacks, strokes and other cardiovascular problems. Last year, a study showed patients who took Wegovy for five years had a 20% lower risk of heart problems compared to placebo recipients.
The news also benefits Eli Lilly, which makes a weight-loss drug called Zepbound.
To gain Medicare coverage, though, Lilly will have to prove Zepbound's benefits on cardiovascular outcomes in clinical testing.
In one study, patients with type 2 diabetes and obesity had a lower risk of cardiovascular problems over a year. Lilly is also running a study of Zepbound in reducing morbidity and mortality associated with obesity. But those test results aren't expected until late 2027, according to ClinicalTrials.gov.
Importantly, the CMS decision doesn't impact diabetes treatments Ozempic and Mounjaro. These drugs use the same chemical backbone as weight-loss drugs Wegovy and Zepbound, respectively. Part D plans already cover these drugs for many beneficiaries.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
