The Trump administration's policy shift considers reimbursing GLP-1 class weight loss drugs, with Eli Lilly and Novo Nordisk's stock prices rising

According to a report by American media citing documents from the Centers for Medicare & Medicaid Services (CMS) on Friday, the Trump administration is considering a five-year pilot program to include weight loss medications in the reimbursement scope of Medicare and Medicaid.

The report states that these documents outline a plan that would allow federal government insurance programs to reimburse for weight loss medications such as Wegovy and Ozempic from Novo Nordisk, as well as Zepbound and Mounjaro from Eli Lilly.

These medications have been shown in clinical trials to reduce weight by 15% to 20%, with annual costs ranging from $5,000 to $7,000, raising concerns about whether states and the federal government can bear these costs in the long term. Analysts believe this move would mark a shift in federal policy, as the Trump administration had previously vetoed a proposal from the Biden era to include weight loss medications in Medicare reimbursement earlier this year.

Needham analyst Ryan MacDonald stated that the government's past focus in this area has been on controlling costs and limiting coverage.

“This does indeed seem like a significant shift in policy stance, at least in terms of federal Medicare.”

According to media reports, currently, 13 states already reimburse for such medications for Medicaid patients, while Medicare prohibits reimbursement for medications solely used for weight loss but allows it for other approved indications, such as sleep apnea and heart disease.

The proposed CMS plan would expand coverage, with the Medicaid pilot set to launch in April 2026 and the Medicare pilot program starting in January 2027.

A spokesperson for Novo Nordisk declined to comment on the pilot program but stated:

“Achieving comprehensive coverage through government and commercial insurance plans is crucial for ensuring affordable healthcare services and treatment options.”

CMS indicated that it would not comment on potential reimbursement models or coverage plans.

Currently, over 70 million people in the U.S. receive healthcare coverage through state and federally funded Medicaid programs, while approximately 65 million receive Medicare coverage, which primarily covers seniors aged 65 and older and some individuals with disabilities.

A spokesperson for Eli Lilly stated that the company is committed to working with Medicare payers and policymakers to expand Medicare coverage and improve healthcare services.

“Eli Lilly is dedicated to ensuring that all patients, regardless of their insurance type, have access to evidence-based obesity treatments.”

As one of the key players in this field, Eli Lilly's stock rose over 3%, while Novo Nordisk's stock increased by more than 2%.

Bernstein analysts believe that this development is favorable for Eli Lilly and expect that once its oral weight loss drug under development is approved for market, the company will benefit significantly. According to media reports, once the drug receives regulatory approval, it will also be included in the pilot program.

In contrast, the stock price of telemedicine platform Hims & Hers Health fell by 6%. Analysts pointed out that if the brand GLP-1 drug receives broader public insurance coverage, it may weaken the market demand for the mixed alternative drugs offered by the company