Eli Lilly’s CEO, Dave Ricks, indicated that the anticipated Medicare coverage for obesity medications could significantly impact the launch of the company’s new weight loss pill, orforglipron. In an interview with CNBC, Ricks expressed confidence that Medicare will begin covering this treatment immediately following its release, potentially altering the competitive landscape. Currently, many patients are paying out-of-pocket for Novo Nordisk’s GLP-1 obesity treatment, Wegovy, which has gained traction despite limited insurance coverage.
Ricks observed that the early adopters of Wegovy are primarily new users of GLP-1 medications, suggesting an expansion in the patient base. He affirmed Lilly’s readiness for a “full launch” of orforglipron in the second quarter, coinciding with Medicare’s first-time coverage of obesity medications later this year under drug pricing agreements made with the Trump administration.
The introduction of Medicare coverage is expected to make obesity medications more affordable, with eligible patients likely to pay a copay of $50 per month. Ricks estimated that 20 to 30 million Medicare beneficiaries suffering from obesity and related conditions could benefit from these GLP-1 treatments, presenting a significant growth opportunity for Eli Lilly.
Despite a reduction in drug prices due to recent pricing agreements, Ricks emphasized that Lilly anticipates substantial growth during the latter half of the year, contingent upon Medicare patient adoption. He noted that Lilly would provide further financial insights related to these developments during its upcoming fourth-quarter earnings report.
Why this story matters:
- The rollout of obesity treatments under Medicare could expand access for millions of patients.
Key takeaway:
- Eli Lilly’s upcoming obesity drug launch aligns with new Medicare coverage, potentially reshaping the market.
Opposing viewpoint:
- Some critics argue that while Medicare coverage is a step forward, the price reductions may not adequately address the underlying cost barriers for patients.
