Biden ramps up Medicare coverage of obesity drugs

Outgoing US President Joe Biden has proposed a dramatic expansion of Medicare coverage of obesity drugs, although it remains to be seen if it will survive under Donald Trump's new administration.

At the moment, anti-obesity medicines (AOMs) like Novo Nordisk's Wegovy (semaglutide) and Eli Lilly's Zepbound (tirzepatide) are not covered by Medicare and Medicaid simply for reducing body weight in obesity – the result of legislation stretching back more than two decades – and are only used when there are related conditions like diabetes.

Biden's proposal – revealed by the White House today – would do away with that restriction, allowing them to be reimbursed for an estimated 3.4 million people in Medicare and 4 million in Medicaid who have obesity alone.

The rationale is that they could prevent people going on to develop obesity-associated conditions like diabetes and cardiovascular diseases like heart attack and stroke, which can end up costing health systems much more to treat.

The current restriction can be traced back to a safety scandal in the 1990s when a widely-used weight-loss regimen called ‘fen-phen’ was shown to cause potentially fatal pulmonary hypertension and heart valve problems.

Medicare coverage would reduce out-of-pocket costs for AOMs – which can currently be as high as $1,000 a month - by as much as 95% in some cases, according to the Biden administration, which has set an implementation date of 2026 for the new access criteria.

"This proposal would allow Americans and their doctors to determine the best path forward so they can lead healthier lives, without worrying about their ability to cover these drugs out-of-pocket, and ultimately reduce health care costs to our nation," it said in a statement.

Changing the criteria for AOMs would also mean that every state Medicaid programme will have to fund treatment by default – something which is currently very rare.

Biden's announcement comes a few months after lawmakers in the House voted to limit the current restrictions on obesity drugs, although their plan did not go as far as the new proposal. Impact modelling of that plan – which would still allow plans to deny coverage – suggested it would cost Medicare just $1.7 billion over 10 years.

The big question is whether the proposals will make it past the incoming administration, given that Trump has been making a lot of noise about reining in federal spending, but has also pledged to "end the chronic disease epidemic and make America healthy again."

Pricing quid pro quo?

In its statement, the White House trumpeted its work on allowing Medicare to negotiate drug prices – a power currently being challenged by the pharma industry – and noted that "international prices for anti-obesity medications are much lower than US list prices and generally lower than US net prices for these same medications."

It added that the proposed rule to expand coverage "would be implemented at the same time as a comprehensive agenda to lower the costs of drugs, including the drug price negotiation program and increased market competition."

That ties in with speculation that Wegovy and Zepbound may be included in the next round of Medicare pricing negotiations, which would come into effect in 2027.