Medicare to Expand Coverage: Eli Lilly's Zepbound for Obstructive Sleep Apnea

The Centers for Medicare and Medicaid Services (CMS) has announced a significant expansion in Medicare coverage, including Eli Lilly's weight loss drug Zepbound (tirzepatide) for the treatment of obstructive sleep apnea (OSA). This decision, which follows the FDA's approval of Zepbound for OSA in December 2024, is set to impact patient access, affordability, and the broader obesity drug market.



Zepbound, a dual GLP-1 and GIP receptor agonist, has demonstrated remarkable efficacy in treating obesity and related conditions. In the SURMOUNT-OSA phase 3 trials, Zepbound was about five times more effective than placebo in reducing breathing disruptions in patients not on positive airway pressure (PAP) therapy, leading to 25 fewer breathing disruptions per hour with Zepbound and five with placebo. In patients on PAP therapy, Zepbound led to 29 fewer breathing disruptions per hour compared to six with placebo. After one year, 42% of adults on Zepbound and 50% of adults on Zepbound with PAP therapy experienced remission or mild, non-symptomatic OSA, compared to 16% and 14% on placebo, respectively (Eli Lilly and Company, 2024).



The expanded Medicare coverage for Zepbound in OSA is expected to significantly improve patient access and affordability. According to BMO Capital Markets, this coverage opens the door to using secondary indications to secure CMS coverage for obesity drugs, which could expand patient access to Zepbound. This greater availability could add another $1.4 billion to Zepbound's peak revenue opportunity, with around $1 billion coming from a Medicare patient population that would see significantly improved access (BMO Capital Markets, 2025).

However, the potential long-term cost implications for Medicare and taxpayers should be considered. While expanded coverage could lead to significant cost savings through improved health outcomes, it could also result in increased costs for Medicare and Medicaid programs. Price transparency, negotiation, and evidence-based decision-making will be crucial in managing these potential long-term cost implications.

The expansion of Medicare coverage for Zepbound could also influence the broader obesity drug market. It opens the door for other obesity drugs to potentially secure CMS coverage for secondary indications, increasing competition in the market. The expanded coverage could lead to a significant increase in patient access to obesity drugs, as Medicare covers a large number of patients, resulting in a substantial boost in sales for the covered drugs. Additionally, the expanded coverage could drive further innovation and investment in the obesity drug market, as companies seek to develop new treatments to meet the growing demand.

In conclusion, the expansion of Medicare coverage for Zepbound in obstructive sleep apnea is a significant development that could improve patient access, affordability, and the broader obesity drug market. However, the potential long-term cost implications for Medicare and taxpayers, as well as the influence on the broader obesity drug market, should be carefully considered and managed through evidence-based decision-making and price transparency.