Weight loss drugs jump in pre-market trading, report: The U.S. government proposes to include weight loss drugs in Medicare and Medicaid
According to reports, the Biden administration plans to include weight loss medications in the existing health insurance, reducing the out-of-pocket cost for purchasing weight loss drugs to 5%. Popular weight loss drugs Wegovy and Zepbound are also on the list of medications. Following the announcement, Novo Nordisk's stock rose over 2% in pre-market trading, while Eli Lilly's stock increased by over 1%
The Biden administration plans to include weight loss drugs in Medicare and subsidy programs, which is expected to further expand the weight loss drug market but may put financial pressure on the Trump administration.
According to Bloomberg, the Biden administration has initiated an agenda to include weight loss medications in existing Medicare to alleviate the drug cost burden for diabetes and obesity patients, with popular weight loss drugs Wegovy and Zepbound also on the list.
The proposal is aimed at 3.4 million seniors with Medicare and 4 million adults benefiting from the Medicaid program for the poor, and it is expected that the out-of-pocket cost for weight loss medications will be reduced to as low as 5% after the proposal is implemented.
Following the announcement, the stock prices of the two major "miracle weight loss drug" manufacturers surged in pre-market trading, with Novo Nordisk rising over 2% and Eli Lilly rising over 3%.
Reports indicate that the production capacity bottleneck for Novo Nordisk and Eli Lilly's weight loss drugs has now been resolved, and they are striving to compete for the weight loss drug market, which is worth hundreds of billions of dollars. However, the nearly $1,000 monthly price still deters many diabetes and obesity patients, and it is expected that the Biden administration's proposal will benefit millions of medication users.
However, the proposal implies significant government spending, which will bring additional financial pressure to the incoming President Trump.
For reference, according to data released by the Congressional Budget Office (CBO) last month, expanding Medicare's coverage for injections could cost an additional $35 billion over nine years.
However, the CBO also added that it is expected that the active ingredient semaglutide in Novo Nordisk's Wegovy (Ozempic) may be included in government price negotiations under the Inflation Reduction Act by 2025, which will help reduce costs