Medicare Delays Full Obesity-Drug Program Rollout After Insurers Push Back
Without big Medicare insurers, future of program to cover popular obesity drugs had been in question
- The Medicare agency will extend a short-term program paying for weight-loss drugs like Zepbound and Wegovy until the end of 2027.
- The extension follows major Medicare insurers signaling they would not join a separate, longer-term payment model for the drugs.
- The decision guarantees access for seniors, with beneficiaries paying a $50 monthly copay for discounted drugs from Lilly and Novo Nordisk.
The Medicare agency will extend a short-term program that will pay for weight-loss drugs such as Eli Lilly’s Zepbound and Novo Nordisk’s NOVO.B -4.19%decrease; red down pointing triangle Wegovy, guaranteeing access to the popular medications will continue for seniors next year.
The decision by the Centers for Medicare and Medicaid Services comes after big Medicare insurers signaled that they didn’t initially plan to join a separate, longer-term payment model for the drugs that was supposed to launch at the start of 2027, throwing its future into question.
Instead, the interim Medicare program, which starts in July and was expected to run only until the end of 2026, will continue until the end of 2027. Under this program, the government effectively pays for the medications, rather than adding them to Medicare insurers’ drug plans, which forces the insurers to account for the cost.
A CMS spokeswoman said the agency was extending the short-term program “after listening to stakeholder feedback.” The change will “allow data collection that will support a more effective potential implementation” of the longer-term model.
The decision is good news for manufacturers such as Lilly and Novo Nordisk, which are counting on Medicare coverage to boost sales of their weight-loss drugs. Previously, Medicare Part D plans have been barred from covering weight-loss drugs, which means seniors who want to take them have had to pay several hundred dollars a month out of pocket.
In deals with the Trump administration late last year, both Lilly and Novo Nordisk agreed to provide their weight-loss drugs at a discounted price for Medicare, with eligible beneficiaries paying a $50 monthly copay. The companies expect Medicare coverage will increase the volume of prescriptions, helping to offset the price discounts.
Applications for insurers to join the longer-term Medicare obesity drug program were due Monday. The program was only supposed to launch if plans enrolling about 80% of Medicare beneficiaries joined it. The biggest Medicare insurer, UnitedHealth Group, said Tuesday it had concerns about the model. CVS said Tuesday that it didn’t opt to participate.
CMS still plans to implement the longer-term payment model in Medicaid, and said it was accepting applications from states through the end of July.