Frozen billions for Novo Nordisk and Eli Lilly
According to Reuters, millions of Americans will be able to access modern obesity drugs for $50 per month.
It will soon become possible thanks to an 18-month pilot program Medicare and Medicaid.
The program will cover people aged 65 and older and will for the first time provide reimbursement for drugs used exclusively for treating obesity, including the Wegovy product from the Danish pharmaceutical group Novo Nordisk and Zepbound and Mounjaro from the American company Eli Lilly.
This is a breakthrough change, because until now Medicare did not cover the costs of pharmacological treatment of obesity as a standalone disease.
Reimbursement was only possible when drugs were prescribed for comorbid conditions such as cardiovascular diseases or fatty liver disease.
According to a U.S. administration representative, the number of people eligible for the program could be several million.
Estimates vary, but the management of Eli Lilly and Novo Nordisk assess that up to 20 million Americans could be eligible.
From an investor’s perspective, these changes are crucial for the financial results of drug manufacturers.
Wall Street analysts estimate that expanding reimbursement will translate into multi‑billion revenue growth for the companies.
The new price also means a significant improvement in therapy accessibility, whose costs in recent years often had to be fully covered by patients.
Nevertheless, Reuters, citing doctors’ opinions, reported that implementing the program could be complicated, and that funding may not be extended after the pilot ends in 2027.
“It’s a huge victory. For decades the medical community did not recognize obesity as a disease,” said Dr. Christina Nguyen from Atlanta, quoted by the agency.
“Even with limitations, for the first time we will be able to offer drugs to many patients,” she added.
Dr. Elbert Huang from Chicago also warned that one of the biggest risks is the temporary nature of the program.
“In my opinion, the biggest scientific unknown is how long one must take the drugs to reap the benefits of weight loss,” he said.
“If someone signs up for this program, which is only temporary, what will happen after 2027?,” he added.
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Shares of Novo Nordisk and Eli Lilly on Wednesday, July 1
The share price of Novo Nordisk on Wednesday, July 1 is at 316,60 DKK (+0.64%).
Since the beginning of the year, the company’s shares have fallen by almost 29%.
Chart. Novo Nordisk share price
Source: TradingView.
The share price of Eli Lilly reaches 1202,40 USD in pre‑market trading (+0.25%).
Since January, the shares have risen by almost 12%.
Chart. Eli Lilly share price
Source: TradingView.
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Source: Reuters.
