The US Centers for Medicare & Medicaid Services (CMS) confirmed that it will not proceed with a Biden administration proposal to expand Medicare coverage for anti-obesity drugs such as Novo Nordisk’s Wegovy (semaglutide) and Eli Lilly’s Zepbound (tirzepatide).
First introduced in November 2024, the proposed rule sought to allow Medicare and Medicaid coverage for glucagon-like peptide 1 receptor agonists (GLP-1RAs) when prescribed alone, not just for type 2 diabetes. The Biden administration estimated the change could have extended coverage to an additional 3.4 million adults. According to the National Institutes of Health (NIH), approximately 42% of US adults are classified as obese.
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Under its current policy, Medicare only covers GLP-1RA drugs such as Novo Nordisk’s Ozempic (semaglutide) and Eli Lilly’s Mounjaro (tirzepatide) when prescribed for diabetes, not for weight loss. While some states opt to cover weight-loss medications through Medicaid, the majority do not.
The Trump administration’s finalised 2026 Medicare Advantage and Part D policies did not include the proposed changes related to weight-loss drug coverage, and the CMS stated it does not intend to finalise the anti-obesity medication provisions from the proposed rule. The decision was published in the Federal Register on 4 April 2025.
This decision is a blow for Eli Lilly and Novo Nordisk, who had both previously endorsed the proposed expansion. Their stock prices dropped following the CMS announcement. As of 7 April premarket trading, Eli Lilly shares were down 3.8% and Novo Nordisk shares were down 2.7%. These drops could also be a result of global stock prices dropping due to the Trump administration’s tariff announcements.
Opposition to the proposed rule also came from payer groups. Alliance of Community Health Plans (ACHP) CEO Ceci Connolly said that the CMS decision was a sensible one, in a 4 April statement.
“While these drugs offer hope for many, the excessive costs carry enormous consequences for consumers, taxpayers and employers,” she said.
“ACHP was the leading national payer organisation to speak out against the proposed expansion, which would have been irresponsible without further long-term efficacy and safety studies and economic analysis.”
The Trump administration has previously said that getting hold of America’s obesity rate is a focus of its ‘Make America Healthy Again’ movement. However, US Secretary of Health and Human Services (HHS) Robert F Kennedy Jr has expressed reservations about relying on drugs to address obesity.
During his high-profile January 2025 confirmation hearing, Kennedy said: “The GLP class of drugs are miracle drugs, but I do not think they should be the first, front-line intervention for six-year-old kids. That is the standard of practice now.”
The financial and public health stakes surrounding obesity remain high. A study published in Nature Nutrition & Diabetes in December 2024 estimates the economic burden associated with obesity on major US industries to have been more than $347bn in 2023.
This latest update comes as regulatory uncertainty in the US is creating challenges. Last week, the White House revealed plans to cut around 10,000 employees from HHS departments, including the US Food and Drug Administration (FDA), the Centers for Disease Control and Prevention (CDC), and the NIH.
