Under Friday’s final ruling anti-obesity medications for weight-loss will remain ineligible for Medicare coverage.
President Donald Trump has reversed the Biden administration’s move to have Medicare cover anti-obesity treatments. The move negates potential coverage for blockbuster GLP-1 drugs like Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound.
In a Sunday note to investors, analysts at BMO Capital Markets said the decision to scrap Medicare coverage for obesity drugs could be a “minor headwind” to the obesity space. “CMS’ decision to decline obesity medicine coverage was not particularly surprising given economic implications and recent political shifts in Washington,” they wrote.
In its fact sheet for its final rule, the Centers for Medicare and Medicaid Services said it “is not finalizing certain provisions” from former President Joe Biden’s proposal “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.
“Obesity medicine coverage is still possible, but there remains a long path ahead,” the BMO analysts noted. “There is still an avenue for obesity medicine coverage in 2025 through the Treat and Reduce Obesity Act,” they continued, though a Republican-controlled Senate makes this unlikely.
Since its inception, Medicare Part D has always denied coverage of drugs that are used for weight loss. Companies have side-stepped this rule by expanding their obesity drugs into indications that Medicare covers. Novo, for instance, broadened Wegovy’s label with a cardiovascular approval in March 2024, winning Medicare coverage a few weeks later. Lilly made a similar move with Zepbound, which was approved for obstructive sleep apnea in December 2024 before securing Medicare coverage in January.
But the Biden administration in November 2024 proposed to include these agents for their obesity indications in the Part D program, with the goal of improving Americans’ access to these “transformative” therapies, according to the CMS fact sheet at the time.
“CMS’ revised interpretation would recognize obesity to be a chronic disease based on changes in medical consensus,” the agency wrote in November, however emphasizing that weight-loss drugs would only be covered for patients with obesity—and not those who are overweight but not obese.
The move would have been expensive for the government, even by its own calculus. In July 2024, Biden—alongside Sen. Bernie Sanders (I-VT)—wrote an opinion piece for USA Today, noting that the high prices set by pharmas like Novo and Lilly of anti-obesity medications were “ripping off Americans” and could “bankrupt the American healthcare system.” These drugs, which cost around $1,100 per month, could run Medicare and Medicaid around $166 billion per year if half of beneficiaries who are obese took these medications, Biden and Sanders wrote.
In October 2024, the Congressional Budget Office released a report warning that authorizing these anti-obesity treatments for Medicare coverage could increase federal spending by around $35 billion from 2026 to 2034. Meanwhile, the total savings from improved health “would be small,” according to the report, totaling under $50 million in 2026 and around $1 billion in 2034.
