The Zhitong Finance App learned that according to reports, the administration led by US President Joe Biden is proposing a regulation requiring payment for diet pills, which may expand the access of millions of obese Americans to diet pills and bring a huge new medical bill to President-elect Donald Trump.
According to information, the US Medicare (Medicare) program now pays for drugs such as Novo Nordisk (NVO.US) Ozempic and LLY.US (LLY.US) Mounjaro (LLY.US) for people with health conditions such as diabetes. According to the White House, the new rules will allow approximately 3.4 million American seniors with health insurance and 4 million adults on Medicaid (Medicaid) programs for the poor to receive weight loss treatment.
According to a White House official, the proposal would cut the monthly out-of-pocket costs of $1,000 for medicines by up to 95%. Medicare covers approximately 52 million American seniors, and currently does not pay for obesity-related drugs such as Wegovy and Zepbound. Only 13 states' Medicaid programs cover these blockbuster weight loss pills.
The move is a major victory for pharmaceutical companies Novo Nordisk and Eli Lilly, which have just emerged from the situation of restricting access to branded drugs for the past two years due to drug shortages. According to relevant analysis, the booming injectable diet drug market is expected to reach 130 billion US dollars by 2030, and the two companies have been competing to persuade insurance companies to provide premiums for these drugs.
Boosted by this, Novo Nordisk's stock price rose about 2% and Eli Lilly's stock price rose about 1.4% before the US stock market on Tuesday.
The report said that the proposal still needs to go through a formal rule-making process, and this also challenges the administration led by President-designate Trump. The Trump administration has made reducing government spending a key goal. If the provision takes effect, any future efforts to control costs by reducing subsidies for this drug will be extremely unwelcome.
Patients and doctors have also been advocating for wider access to medicines, and efforts to lift restrictions on health insurance coverage have been stepped up in Congress. However, industry observers and analysts expect no changes until next year at the earliest.
Covering these drugs at current prices isn't cheap. Expanding Medicare coverage for these drugs could cost $35 billion over nine years, according to an analysis released by the US Congressional Budget Office last month.
However, the US Congressional Budget Office also stated that it is expected that the active ingredient simeglutide in Novo Nordisk's Wegovy, Ozempic, and Rybelsus will be included in government price negotiations in 2025 under the Inflation Reduction Act, which may help reduce costs.
White House officials said the proposed rules for diet pills will take effect at the same time as plans to reduce the cost of drugs through price negotiations.
Meanwhile, Novo Nordisk and Eli Lilly have been conducting research to prove that this injectable drug has health benefits in addition to weight loss, as part of their efforts to expand insurance coverage. In March of this year, major health insurance companies began paying Novo Nordisk's Wegovy to some health insurance beneficiaries with heart disease, opening the door for more people to get this medicine.
Eli Lilly introduced cheaper disposable Zepbond vials in August, in part to give Medicare beneficiaries a way to get medication.