Written by Eleanor Rice

Obesity drugs used solely for weight management are still not covered by Medicare

New guidance from the Centers for Medicare and Medicaid Services says older adults should only take popular bariatric treatments if used to reduce the risk of serious heart disease and not just for weight loss. The drug Wegoby will now be covered by Medicare.

Anti-obesity drugs that have received regulatory approval to treat other conditions can be covered by Medicare Part D prescription drug plans for those alternative uses, CMS said in guidance sent to Part D plans on Wednesday. Stated.

This would pave the way for wider access to weight loss drugs for people who are overweight, obese or have other health conditions. A decades-old law excludes drugs prescribed for weight loss from Medicare prescription drug benefits.

The new guidance comes as the Food and Drug Administration approves Novo Nordisk’s (NVO) Wigovy to reduce the risk of heart attack and other serious cardiovascular disease in adults with heart disease and obesity and overweight. It was announced less than two weeks later. Eli Lilly & Co. (LLY) is also studying tirzepatide, the active ingredient in Zepbound and Mounjaro, for sleep apnea and other conditions.

“CMS is committed to ensuring people have access to treatments and treatment options that improve health outcomes,” an agency spokesperson said in a statement Thursday.

A spokesperson said Medicare drug plans can add drugs to their formulary or list of covered drugs or remove restrictions on covered drugs at any time during the year. The plan could require prior approval for obesity drugs used for other conditions to ensure they are used for medically recognized indications, a spokesperson said. That’s what it means.

Medications that are approved solely for weight management are not covered by Part D unless your plan offers additional benefits.

The regulatory move comes amid broader debate about how Medicare coverage of obesity drugs will affect the federal budget deficit. The Congressional Budget Office reiterated its view in a presentation Wednesday that Medicare coverage of drugs at current prices (about $1,100 to $1,300 per month) would increase overall federal spending. However, the CBO noted that costs will depend on the patient’s actual use of the drug, length of treatment, and other factors.

Semaglutide, the active ingredient in Wegovy and Ozempic, will also be selected for Medicare drug price negotiations in the coming years and will likely see its price reduced, the CBO said in a presentation Wednesday.

The Obesity Treatment and Reduction Act, which would eliminate Medicare’s restrictions on weight loss drugs, has some bipartisan support. But policy analysts say it is unlikely to gain any real support in Congress until there is broad agreement on the long-term costs to the federal government.

Eli Lilly shares and Novo Nordisk’s American deposit income were essentially flat on Thursday afternoon. Lilly stock is up 32% since the beginning of the year, while Novo’s ADRs are up 26%.

– Eleanor Rice

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03/21/24 1540ET

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