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Still life of Wegovy an injectable prescription weight loss medicine that has helped people with ...
More obesity. It should be used with a weight loss plan and physical activity. (Photo by: Michael Siluk/UCG/Universal Images Group via Getty Images) The Trump administration yesterday nixed a Biden-era plan that would have lifted the prohibition on coverage of obesity medicines by Medicare and considerably expanded access to these products in Medicaid.
Medicare coverage of products prescribed for weight loss only has been prohibited by law for more than two decades. The Biden administration drafted a rule in November 2024 that would allow Medicare plans administering the federal government insurance program for the elderly and disabled to cover obesity drugs in the outpatient benefit called Part D. Specifically, the proposal issued by the Centers for Medicare and Medicaid Services reinterpreted the statutory regulation to “permit coverage of anti-obesity medications.
” The plan would also require coverage of obesity medications in Medicaid, the insurance program for people with limited income and resources. Medicaid is jointly run by the federal government and 50 state agencies. Currently, drugs used strictly for obesity are covered in just 13 states.
Now that the Trump administration has revoked the Biden plan, the question is, what next? The current spokesperson for CMS left the door slightly ajar for a possible future reconsideration of the proposed rule change. One can speculate that perhaps if the net prices of branded GLP-1 drugs such as Wegovy (semaglutide) and Zepbound (tirzepatide) would go down further, the administration would revisit its decision. At current prices, the branded GLP-1 drugs are not considered cost-effective .
CMS had estimated that 7.4 million Medicare and Medicaid beneficiaries would be newly eligible for the medicines if the ban on coverage was removed. Over a ten-year span, this would cost Medicare $25 billion and Medicaid $11 billion.
States would have to pay $4 billion for their share of the Medicaid bill. Notably, the cost figures CMS posted for Medicare were lower than numbers included in a Congressional Budget Office report and in a Health Affairs publication. There’s also the potential problem of how much the Biden administration’s proposed rule change would impact Medicare beneficiary Part D premiums.
They would probably increase, perhaps substantially, as payers that contract with Medicare try to offset some of the increased cost burden. Besides the executive branch, Congress has also been grappling with how to deal with coverage of weight loss medications in public programs like Medicare. A bill in Congress, the Treat and Reduce Obesity Act, has been (re)introduced multiple times since 2012.
TROA was last reintroduced in June 2024, in a previous session of Congress. But the legislation did not proceed to a floor vote despite having bipartisan support and around 130 co-sponsors, roughly 90 Democrats and 40 Republicans. This law would lift the ban on coverage of weight loss drugs in Medicare and not change anything related to Medicaid reimbursement.
The main stumbling block to passage has been the anticipated rise in expenditures associated with implementation of the proposed law. Interestingly, the reasoning behind TROA resembles that given by the Biden administration when it drafted its proposal last year. Namely, given what CMS called a growing consensus among experts that obesity is a chronic disease associated with a large number of health risks ranging from diabetes to cancer, weight loss medicines should no longer be excluded from coverage.
At present, monthly list prices for Wegovy and Zepbound are over $1,000, though payers are able to negotiate significantly lower net prices on behalf of employers and health plans that do insure weight loss products to their enrollees. The problem is that the majority of employers and insurers in the commercial sector do not reimburse these medicines. They cite the cost burden, but also the high drop-out rate as many patients who begin treatment don’t stay on the drugs for a variety of reasons, including side effects.
The maker of Zepbound, Eli Lilly, offers a patient assistance program to people who aren’t in Medicare or Medicaid. And Novo Nordisk launched NovoCare Pharmacy recently, a direct-to-patient delivery option that provides cash-paying customers Wegovy at a reduced cost of $499 per month. But again, Medicare and Medicaid patients are not eligible.
With the federal government prioritizing budget cuts, severe restrictions on coverage of obesity medications in the public sector aren’t likely to change any time soon..
