Medicare coverage of weight-loss drugs? Don't count on it, analysts say.

Investors should not bank on Medicare covering the powerful new weight-loss drugs from Eli Lilly & Co. (LLY), Novo Nordisk (NOVO-B.KO) and other drugmakers any time soon, Beacon Policy Advisors said in a report Thursday. A decades-old law generally prohibits Medicare from covering prescription drugs for weight loss. Although some lawmakers on both sides of the aisle support changing the law to allow that coverage, such legislation is unlikely to get consideration in this Congress or the next, the Beacon report said. "Our main rationale is that many Republicans preach about personal responsibility and would be loathe to pay billions of dollars for something that they think people should do on their own," the report said. "Certain Democrats may also be concerned with the cost implications for Medicare's fiscal solvency." Investors should also weigh the risk that the Centers for Medicare and Medicaid Services may more rigorously audit doctors' prescribing habits as well as Medicare Advantage and Part D prescription-drug plans paying for these drugs, the report said.

-Eleanor Laise

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06-29-23 0833ET

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