Medicare obesity drug pilot extended after insurer pushback

The Trump administration has extended the duration of a pilot programme to provide access to obesity drugs through Medicare, as too few insurance companies have agreed to sign up.

The pilot has been extended by a year, with the federal government footing the bill for the medicines while discussions continue with the insurers about signing up for a longer-term programme, originally due to begin at the start of next year.

The Medicare GLP-1 Bridge pilot is due to start in July and lay the groundwork for coverage of drugs like Novo Nordisk's Wegovy (semaglutide) and Lilly's Zepbound (tirzepatide) and Foundayo (orforglipron) under Medicare Part D, an outpatient prescription drug benefit provided to more than 50 million older adults in the US.

Some insurers, including UnitedHealth and CVS Health, have said there are challenges with the proposal for the programme that need to be addressed before they can join in.

On UnitedHealth's first-quarter results call, the company pointed to "notable challenges and outstanding questions" with the structure of the Center for Medicare & Medicaid Services' (CMS) BALANCE model for the scheme. That is designed to bypass the historical prohibition on coverage of weight-loss drugs under Medicare while data is collected on their ability to reduce healthcare costs and improve health outcomes.

UnitedHealth has nevertheless agreed to participate, according to a Bloomberg report, but others like CVS Health have declined. The deadline for insurers to opt in to the programme passed at the start of this week, and needed an 80% sign-up rate to proceed.

The pilot, meanwhile, had been due to run until the end of this year, with a full rollout following on 1st January 2027, but will instead continue with government funding until the end of that year, according to a CMS update.

A report in the Wall Street Journal, citing a CMS spokesperson, indicated that the extension to the pilot will be used to "allow data collection that will support a more effective potential implementation" of the BALANCE Medicare programme. That will include "data on GLP-1 utilisation to share with Part D plan sponsors ahead of potential implementation of BALANCE."

The extension to the pilot looks likely to be good news for Novo Nordisk and Lilly, as they are now looking at additional months of government-bankrolled coverage of their weight-loss therapies, which at the moment are mostly paid for out of pocket by cash purchasers.

That also means that, for now, the delay to the full programme should not impact deals agreed between the federal government and Novo Nordisk and Eli Lilly last year, which saw them slash prices in return for coverage of the drugs through Medicare and Medicaid.