The Trump administration on Friday rejected a Biden plan that would have required Medicare and Medicaid to cover obesity drugs and expanded access for millions of people.
Under the law that established Medicare’s Part D drug benefits, the program was forbidden from paying for drugs for “weight loss.” But the Biden administration’s proposal last November had attempted to sidestep that ban by arguing that the drugs would be allowed to treat the disease of obesity and its related conditions.
Expanding coverage of the drugs would have cost the federal government billions of dollars. The Congressional Budget Office estimated the federal expense would amount to about $35 billion over 10 years.
The decision announced Friday was part of a larger 438-page regulation updating parts of Medicare’s Part D drug benefits and Medicare Advantage, the private insurance plans that about half of Medicare beneficiaries now use.
Catherine Howden, a spokeswoman for the Centers for Medicare and Medicaid Services, said in an email that the agency believed that expanding coverage “is not appropriate at this time.” But she said the agency had not ruled out coverage and “may consider future policy options” for the drugs.
Medicare, the government insurance program for Americans over 65 and people with disabilities, does cover the weight-loss drugs for patients with diabetes, and for a much smaller subset of people who are obese and also have heart problems or sleep apnea.
The Biden plan would have extended coverage to patients who were obese but did not have those diseases. Medicare officials had estimated around 3.4 million more people would have chosen to take the drugs under the policy.
The most popular weight-loss drugs are made by Novo Nordisk, which sells its medicine as Wegovy for obesity and as Ozempic for diabetes, and by Eli Lilly, which sells its product as Zepbound for obesity and Mounjaro for diabetes.
Eli Lilly and Novo Nordisk now offer their products for $350 to $500 a month to patients who pay with their own money instead of going through insurance. But until recently, patients sometimes paid more than $1,300 a month.
Robert F. Kennedy Jr., the health secretary, has been vocal in his criticism of the weight-loss drugs, saying they are inferior to consuming healthy food.
The drugs have been shown in clinical trials to have benefits far beyond weight loss, like preventing heart attacks and strokes.
Proponents of expanded coverage have argued that the government’s expenditure on the drugs would at least partly pay for itself in the long run. Patients, they say, would become healthier and that would prevent expensive medical bills. It’s not clear yet whether such savings will materialize.
State Medicaid programs, which provide health care for the poor, can currently choose whether to cover the drugs, and some do. If the broader Biden policy had been finalized, coverage would have been required in every state.
The obesity drugs cost Medicare and Medicaid hundreds of dollars per patient each month, though the exact prices are secret.
Many employers and private health insurance plans do not cover the drugs. Some, including state employee benefit plans in North Carolina and West Virginia, dropped coverage of the drugs after their popularity surged, citing high costs.
Without insurance coverage, many patients on Medicare and Medicaid have been relying on inexpensive copycat versions of the drugs produced through a drug-ingredient mixing process known as compounding. These versions, which were allowed because the brand-name drugs were in short supply, can cost less than $200 a month. But regulators have ordered such sales to end soon because supply of the brand-name products has improved.
Republicans in Congress have expressed some interest in requiring Medicare to cover the drugs. The idea was included in a list of policy options produced by the House Budget Committee earlier this year. But it does not appear to be a major priority right now.
In an effort to reduce costs, Medicare has selected Novo Nordisk’s Wegovy for negotiations to lower prices under a law passed by a Democratic-controlled Congress in 2022. Those lower prices would kick in for eligible people in 2027, a change that has the potential to limit the long-term costs of coverage.
