Trump administration to pilot covering obesity drugs

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For once, the Trump administration could also be giving some drugmakers a reason to have a good time.

The Trump administration is planning to experiment with covering costly weight reduction drugs under Medicare and Medicaid, the Washington Post reported on Friday. That plan could expand access to thousands and thousands of Americans with obesity who cannot currently afford Novo Nordisk‘s Wegovy and Eli Lilly‘s Zepbound, blockbuster GLP-1 drugs that cost around $1,000 monthly before insurance. 

In a press release to CNBC concerning the plan, the Department of Health and Human Services said all drug coverages undergo a “cost-benefit review.” The Centers for Medicare and Medicaid Services “doesn’t comment on potential models or coverage,” the department added. 

The reported plan – if it ultimately takes effect – can be an enormous win for Eli Lilly, Novo Nordisk and plenty of Americans. 

Spotty insurance coverage of obesity drugs stays the most important barrier to access for patients – and it’s choking broader uptake and revenue growth for the 2 pharmaceutical giants. Many health plans, including Medicare, cover GLP-1s for treatment of diabetes, but not obesity. Medicaid coverage of obesity drugs is limited and varies by state, in line with health policy research organization KFF. 

Nevertheless it’s essential to do not forget that this plan is not exactly latest. 

In November, the Biden administration proposed having Medicare and Medicaid cover obesity treatments, which might have prolonged access to roughly 3.4 million Medicare beneficiaries and about 4 million Medicaid recipients. The proposal was controversial on the time, as it might cost taxpayers as much as $35 billion over the following decade, a congressional evaluation found.

The Trump administration dropped that proposal in April, but said it could reconsider coverage of those drugs in the longer term. 

Let’s get into what the latest reported iteration of the plan looks like. 

Under the Trump administration’s reported pilot plan, state Medicaid programs and Medicare Part D plans would give you the option to voluntarily decide to cover Ozempic, Wegovy, Mounjaro and Zepbound for patients for “weight management” purposes. That is in line with several Centers for Medicare and Medicaid Services documents obtained by the Post.

The plan is predicted to begin in April 2026 for Medicaid and January 2027 for Medicare plans, the Post reported. 

It’s unclear how precisely the plan will play out, Jared Holz, Mizuho health care equity strategist, said in a note to clients on Friday. Holz said he expects the federal government to place some coverage parameters in place related to aspects like age, body weight, body mass index and other comorbidities, or coexisting chronic health conditions. 

He also said the pricing of the drugs will likely be a “major consideration.” Holz said he expects the federal government to pay lower than the present list prices of medication. But having that coverage would expand access and will help drive higher sales volumes, he noted. 

One other factor to contemplate is how much the federal government is willing to crack down on so-called compounding pharmacies, that are allowed in rare cases to sell cheaper, unapproved versions of GLP-1s. The pharmaceutical industry fiercely opposes those knock-off GLP-1s, as their safety and efficacy aren’t vetted by regulators they usually are, in some cases, illegally sold at scale.

Holz said the industry’s complaints to the federal government about compounded GLP-1s have to date “not been met with a widespread shut-down.”

But overall, Holz said the Trump administration’s reported willingness to contemplate covering obesity drugs is “a slight positive so far as industry sentiment.” 

It’s definitely a breath of fresh air for Eli Lilly, Novo Nordisk and other drugmakers – including Amgen, Roche, AstraZeneca and Pfizer – which might be hoping to bring their very own obesity drugs to market. 

The last six months have been anything but smooth for the broader industry: The Trump administration has ratcheted up calls for drugmakers to lower U.S. drug prices, overhauled federal health agencies and will impose sweeping tariffs on pharmaceuticals imported into the country any day now. 

We’ll keep watching to see whether this plan gets implemented, so stay tuned for our coverage! 

Be happy to send any suggestions, suggestions, story ideas and data to Annika at annikakim.constantino@nbcuni.com.

After reporting its second straight earnings miss and guidance cut, UnitedHealth Group accomplished its executive sweep by replacing CFO John Rex. Executives on the earnings call admitted to mis-execution in Medicare Advantage and pledged to get back to profitability and win back investor trust.

The enterprise capital firm brought in Harrison and announced the formation of HATCo in 2023. In a release on the time, General Catalyst said the corporate would work closely with health system partners, and that it might eventually acquire and operate its own health system. 

Months later, HATCo announced its plans to purchase Summa Health, a nonprofit integrated health system in northeast Ohio. Under its latest structure, Summa would develop into a for-profit organization, and General Catalyst said it might introduce latest tech-enabled solutions that aim to make care more accessible and reasonably priced.

Buying a health system is an unprecedented move within the enterprise industry, and the deal wasn’t well received by some members of the Ohio community. Tons of signed a petition urging Summa to stay a nonprofit and to halt negotiations with HATCo.

Ohio Attorney General Dave Yost conditionally approved the deal in June, though he outlined quite a few “enforceable commitments” as a part of the agreement. HATCo may have to notify the Attorney General of transactions that would trigger antitrust concerns for 10 years after the deal closes, as an example. 

Harrison went to medical school within the late Eighties and has spent most of his profession inside health systems, most recently as CEO of Intermountain Healthcare. General Catalyst told CNBC that Harrison will proceed to offer the firm’s CEO, Hemant Taneja, with clinical insights and can remain connected to its ecosystem in his latest role. 

“It became increasingly clear to each Marc and to us that Marc’s role would best be achieved as a strategic advisor to Hemant Taneja as we bring that ambition and vision to life,” a General Catalyst spokesperson said.

Daryl Tol, the top of General Catalyst’s Health Assurance Ecosystem, was promoted to president of HATCo, the spokesperson said. He’ll spearhead the firm’s day-to-day- work with Summa Health leadership.

General Catalyst has also appointed Kate Walsh, the previous Massachusetts Secretary of Health and Human Services, to HATCo’s board. As well as, she’s going to serve because the chair of the board at Summa Health once the transaction closes.

“We’re grateful for Marc’s leadership and collaboration as co-founder and CEO to assist get us up to now within the evolution of HATCo, and we look ahead to leveraging his invaluable perspective as we proceed to progress,” the spokesperson said.

Read more of CNBC’s coverage about HATCo’s acquisition of Summa Health here.
Be happy to send any suggestions, suggestions, story ideas and data to Ashley at ashley.capoot@nbcuni.com.