Shares of obesity drugmakers Novo Nordisk (NYSE:NVO) and Eli Lilly and Co (NYSE:LLY) moved higher on Tuesday after the Biden administration proposed expanded coverage of anti-obesity medications under Medicare and Medicaid.
Currently, these programs cover the use of anti-obesity medications for certain conditions like diabetes, but under the proposal, this would be expanded to include obesity.
This would open up access to weight-loss therapies to 3.4 million older Americans on Medicare and four million adults under the Medicaid programs for the poor, the Biden administration said.
Coverage would reduce costs by up to 95% for some enrollees, it added. Without insurance coverage, such drugs could cost up to $1,000 a month.
“This proposal would allow Americans and their doctors to determine the best path forward so they can lead healthier lives, without worrying about their ability to cover these drugs out-of-pocket, and ultimately reduce health care costs to our nation,” the Biden administration said in a statement.
Novo Nordisk (NYSE:NVO), which makes several drugs for obesity including Ozempic (semaglutide), saw its shares add 2.4% on the news at $107.
Eli Lilly, the firm behind Zepbound (tirzepatide), was up 5.9% just shy of $800.
The proposal will take months to be finalized, meaning it will need president-elect Donald Trump’s approval.