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3 months ago
U.S. Withdraws Medicare Coverage Plan for Obesity Drugs — LLY and NVO Shares Fall (Apr 6, 2025)
The Trump administration has officially scrapped a proposal introduced under President Biden to expand Medicare coverage for GLP-1-based weight-loss drugs. On Apr 5 (local time), the Centers for Medicare & Medicaid Services (CMS) announced it would not move forward with the plan to extend coverage for these treatments, which have demonstrated up to 20% weight reduction and a preventive effect on type 2 diabetes. The decision is believed to reflect concerns over the high cost of such drugs, which can reach $1,000 per month without insurance coverage.Following the announcement, shares of companies involved in obesity drug development fell. Novo Nordisk, maker of Wegovy, dropped 1.4% in after-hours trading, while Eli Lilly, which produces Zepbound, declined 3.1%. Currently, Medicare covers GLP-1 drugs approved for diabetes, but not those approved solely for obesity treatment.Analysts viewed the decision as a manageable but clear policy risk. Courtney Breen of Bernstein noted that “with pharmaceutical tariff negotiations underway, it’s politically difficult to offer tangible benefits right now.” Both Eli Lilly and Novo Nordisk expressed disappointment and stated their intention to continue working with the Trump administration to revisit the issue and secure broader coverage.[Compliance Note]All posts by Sellsmart are for informational purposes only. Final investment decisions should be made with careful judgment and at the investor’s own risk.The content of this post may be inaccurate, and any profits or losses resulting from trades are solely the responsibility of the investor.Core16 may hold positions in the stocks mentioned in this post and may buy or sell them at any time.
