Medicare can now cover Eli Lilly’s Zepbound for sleep apnea, CMS says

Medicare drug plans can now cover Eli Lilly‘s blockbuster obesity drug Zepbound for obstructive sleep apnea, CNBC confirmed on Wednesday. 

That opens the door for broader access to Zepbound, which shouldn’t be currently covered by Medicare and lots of other insurance policy for weight reduction. Demand for the injection has soared over the past yr despite its roughly $1,000 price tag before insurance.

In an announcement to CNBC, a spokesperson for the Centers for Medicare & Medicaid Services said “current Medicare Part D and Medicaid coverage rules apply” to Zepbound following its landmark approval last month for essentially the most common sleep-related respiratory disorder.

Medicare Part D plans can only cover obesity drugs in the event that they are used for a further medically accepted purpose approved by the Food and Drug Administration, the CMS spokesperson said, referring to the agency’s guidance. The spokesperson added that Part D plans may think about using prior authorization – a process where a provider must first get approval from an insurer – for those drugs to make sure they’re getting used for that specific purpose. 

The FDA on Dec. 20 cleared Zepbound for patients with obesity and moderate-to-severe types of obstructive sleep apnea, or OSA, which refers to respiratory interrupted during sleep resulting from narrowed or blocked airways. That made Zepbound the primary drug treatment cleared for the estimated 20 million individuals with those types of the disease, in response to Eli Lilly.

Medicare Part D plans are similarly allowed to cover Novo Nordisk‘s weight reduction drug Wegovy for its other approved use of lowering cardiovascular risks. The diabetes counterparts of Wegovy and Zepbound – Ozempic and Mounjaro, respectively – are covered by Medicare and most insurance policy. 

Each Novo Nordisk and Eli Lilly are studying their weight reduction medicines as treatments for fatty liver disease, chronic kidney disease, sleep apnea and more. To be covered, those drugs would want to return late-stage trial results after which be submitted for FDA approval for those uses.

Meanwhile, state Medicaid coverage for Zepbound and other obesity medications will depend on what condition they’re prescribed for and whether their manufacturer has signed a certain Medicaid drug rebate agreement, in response to the spokesperson. 

Under that agreement with the secretary of Health and Human Services, manufacturers comply with provide rebates to states in exchange for Medicaid coverage of their drugs. States share the rebates with the federal government. 

A state Medicaid program must cover Zepbound whether it is prescribed for OSA and Eli Lilly has signed the Medicaid drug rebate agreement, the spokesperson said. 

But when Zepbound is prescribed for weight reduction, state Medicaid programs will not be required to cover it. 

The Biden administration in November proposed a rule that might allow Medicare and Medicaid to cover weight reduction drugs for patients with obesity. The rule would give tens of millions of individuals access to weekly injectables, however it would cost taxpayers as much as $35 billion over the subsequent decade.

It’s unclear if President-elect Donald Trump’s administration will pursue the rule.