Medicare allows coverage of Wegovy for heart patients

By Eleanor Laise

Obesity drugs used for weight management alone still won't be covered by Medicare

Older adults may now get Medicare coverage for the popular obesity drug Wegovy, so long as they're using it to cut their risk of serious heart problems and not for weight loss alone, according to new guidance from the Centers for Medicare and Medicaid Services.

Anti-obesity medications that get regulatory approval for treatment of other conditions can be covered in Medicare Part D prescription-drug plans for those alternative uses, CMS said in guidance sent to Part D plans Wednesday.

That paves the way for people who are overweight or with obesity as well as other health conditions to gain much broader access to weight-loss drugs. Under a decades-old law, drugs prescribed for weight loss are excluded from coverage under Medicare's prescription-drug benefit.

The new guidance comes less than two weeks after the Food and Drug Administration approved Novo Nordisk's (NVO) Wegovy to cut the risk of heart attacks and other severe cardiovascular problems in adults who have heart disease as well as obesity or are overweight. Eli Lilly & Co. (LLY) is also studying tirzepatide, the active ingredient in Zepbound and Mounjaro, in sleep apnea and other conditions.

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

Medicare drug plans can add drugs to their formularies, or lists of covered drugs, and remove coverage restrictions at any time during the year, the spokesperson said. The plans can require prior authorization for obesity drugs that are being used for other conditions, the spokesperson said, to ensure they're being used for a medically accepted indication.

Drugs that are approved for weight management alone still won't be covered under Part D, unless plans provide it as a supplemental benefit.

The regulatory move comes amid a broader debate about how Medicare coverage of obesity drugs could impact the federal deficit. The Congressional Budget Office in a presentation Wednesday reiterated its view that Medicare coverage of the drugs at their current prices-roughly $1,100 to $1,300 per month-would increase overall federal spending. But the costs will depend on the actual use of the drugs among the eligible population, the duration of their treatment, and other factors, the CBO noted.

Semaglutide, the active ingredient in Wegovy and Ozempic, is also likely to be selected for Medicare drug-price negotiations in the next few years, lowering its price, the CBO said in its presentation Wednesday.

The Treat and Reduce Obesity Act, which would lift Medicare's restriction on coverage of weight-loss drugs, has won some bipartisan support. But it's unlikely to get real traction in Congress, policy analysts say, until there's a broader consensus on the longer-term costs to the federal government.

Eli Lilly's stock and Novo Nordisk's American depositary receipts were roughly flat Thursday afternoon. Lilly shares have gained 32% year to date, while Novo's ADRs are up 26%.

-Eleanor Laise

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03-21-24 1540ET

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