Novo Nordisk, Eli Lilly and Boehringer Ingelheim back bill to bring obesity drug coverage to Medicare

Despite the widespread hype surrounding new and powerful obesity medicines, the drugs are still out of reach for many Americans who could benefit.

One reason is that under current laws, Medicare is barred from covering obesity drugs. But under legislation backed by Novo Nordisk, Eli Lilly, Boehringer Ingelheim and many other organizations, a group of lawmakers aims to change that.

Sens. Bill Cassidy, M.D., R-Louisiana, and Tom Carper, D-Delaware, plus Reps. Brad Wenstrup, R-Ohio, and Raul Ruiz, D-California, have proposed the Treat and Reduce Obesity Act, which would step up the government's fight against the obesity epidemic.

As the lawmakers note, many common conditions such as heart disease and diabetes are associated with obesity. They say the bill would "work to directly prevent these comorbidities through expanded coverage of new health care specialists and chronic weight management medications for Medicare recipients."

“There is a clear need to address obesity,” Cassidy said in a Thursday statement. “Expanding Medicare coverage to the treatments patients need enables them to improve their health and benefits us all.”

Novo Nordisk's Wegovy is the first next-generation obesity medication on the market. The drug has delivered striking weight loss results in the clinic and has gained celebrity notoriety. But without insurance, the drug can cost more than $16,000 per year, according to telehealth company Ro.

At least 10 other lawmakers in both political parties have co-sponsored the legislation. Dozens of organizations, such as the American Diabetes Association, YMCA of the USA and Weight Watchers, are also on board. 

Eli Lilly, Novo Nordisk and Boehringer Ingelheim have also endorsed the legislation, according to the lawmakers' release.

Aside from Wegovy, Novo Nordisk also markets its first-generation obesity drug Saxenda, which recently went into shortage thanks to spiking demand. Meanwhile, Eli Lilly expects to win approval as soon as this year for its Wegovy competitor tirzepatide, while Boehringer is working on a potential third rival.

While Medicare coverage might help more patients afford new weight loss medicines, it certainly wouldn't help with the supply situation.

Amid high demand for Wegovy, Novo Nordisk in May said it was reducing the U.S. supply of Wegovy starter doses to ensure existing patients can access their medicines. The company also paused Wegovy marketing efforts in May.

For its part, Eli Lilly is also struggling to keep up with demand for Mounjaro, which is approved in Type 2 diabetes but may be soon receive an obesity approval. 

Meanwhile, both companies are investing billions to bolster their manufacturing capacity. In 2021, Novo Nordisk pledged $2.58 billion to build three new manufacturing facilities and expand its massive site in Kalundborg, Denmark. Then last month, the company committed $2.3 billion to expand a site in Hillerød, Denmark.

As for Lilly, the company in April said it would invest $1.6 billion to grow its manufacturing footprint in Boone County, Indiana. That takes the company's investment there to $3.7 billion, its largest-ever financial comment for a single site.