Trump Administration Reverses Biden's Plan For Medicare Coverage Of Obesity Drugs Like Ozempic And Zepbound

On Monday, the U.S. Centers for Medicare & Medicaid Services (CMS) released its 2026 payment update for Medicare Advantage (MA) and Medicare Part D prescription drug plans.

This update, along with a final rule issued on April 4, Friday, includes routine annual changes and technical adjustments to both programs.

Under Friday’s ruling, President Donald Trump scrapped the Biden administration’s move for Medicare coverage for anti-obesity treatments, negating the potential coverage for blockbuster GLP-1 drugs like Novo Nordisk A/S’ NVO Wegovy (semaglutide) and Eli Lilly And Co’s LLY Zepbound (tirzepatide).

Also Read: Medicare To Cover Eli Lilly’s Weight Loss Drug Zepbound For Obstructive Sleep Apnea Treatment

In November 2024, the Biden-Harris Administration proposed expanding Medicare and Medicaid coverage for anti-obesity medications, aiming to address the high costs that have drawn criticism.

In its fact sheet, the CMS said it “is not finalizing certain provisions at this time,” including Part D coverage of anti-obesity medications. “CMS may address these proposals in future rulemaking, as appropriate,” according to the fact sheet.

The Biden administration estimated the change could have extended coverage to an additional 3.4 million adults. According to the National Institutes of Health (NIH), approximately 42% of U.S. adults are classified as obese.

As per a media report in March 2024, Medicare may extend coverage for Novo Nordisk’s weight-loss drug Wegovy (semaglutide) to certain members with a history of heart disease. 

The CMS revealed that Medicare Part D drug-benefit plans, overseen by private insurers, could potentially cover anti-obesity medications under specific circumstances. 

In October 2024, the Congressional Budget Office released a report warning that authorizing anti-obesity treatments for Medicare coverage could increase federal spending by around $35 billion from 2026 to 2034.

The report added that direct federal costs of covering weight loss drugs would increase from $1.6 billion in 2026 to $7.1 billion in 2034.

Relative to the direct costs of the medications, total savings from beneficiaries” improved health would be small—less than $50 million in 2026 and rising to $1.0 billion in 2034.

In January this year, the U.S. Department of Health and Human Services (HHS) unveiled the selection of 15 additional drugs covered under Medicare Part D for price negotiations, building on efforts to reduce prescription drug costs. The list included Novo Nordisk’s Ozempic, Rybelsus, and Wegovy.

Price Action: At the last check Tuesday, LLY stock was up 3.18% to $746.78, and NVO stock is down 0.41% to $63.38.

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