Biden proposes expanded Medicare, Medicaid coverage of obesity drugs

U.S. President Joe Biden on Tuesday proposed expanding coverage of anti-obesity drugs, like Novo Nordisk's (NOVOb.CO), opens new tab Wegovy, for more than 7 million people with Medicare and Medicaid health coverage, which could cut out-of-pocket expenses for some by as much as 95%.

This would enable more Americans to afford new weight loss medications in the GLP-1 class that have been shown to reduce weight by as much as 20% on average and can help prevent type 2 diabetes but cost as much as $1,000 a month without insurance coverage. The drugs have also been shown in trials to lower the risk of heart attacks and cardiovascular-related death.

Current rules for the Medicare government health insurance program cover the use of GLP-1 drugs such as Eli Lilly's (LLY.N), opens new tab Mounjaro and Novo's Ozempic for conditions like diabetes, but not the versions of those drugs like Wegovy that have been approved to treat obesity as a condition on its own.

Medicaid programs, which are state-run, can cover the drugs but many choose not to.

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