Trump's Medicare and Medicaid Plan to Boost Novo Nordisk and Eli Lilly Shares

The Trump administration's plan to cover costly weight loss drugs under Medicare and Medicaid could boost Novo Nordisk and Eli Lilly. The program, led by the Center for Medicare and Medicaid Innovation, would expand access to anti-obesity drugs like Mounjaro and Ozempic. Novo Nordisk and Eli Lilly are the manufacturers of these drugs and could see significant profits if the plan is implemented. The program is scheduled to launch in April 2026 for Medicaid and January 2027 for Medicare.

The Trump administration is reportedly planning to pilot a program that would cover costly weight loss drugs under Medicare and Medicaid. This initiative, led by the Center for Medicare and Medicaid Innovation, could significantly boost the profitability of drug manufacturers like Novo Nordisk and Eli Lilly, which produce popular anti-obesity drugs such as Mounjaro and Ozempic.

Under the proposed plan, state Medicaid programs and Medicare Part D plans would have the option to voluntarily cover these drugs for weight management purposes. The plan is expected to start in April 2026 for Medicaid and January 2027 for Medicare [1].

The move comes as a potential game-changer for the weight loss drug market, which is predicted to reach a market size of $100 billion by the end of the decade [2]. However, the implementation of this plan is not guaranteed, and several factors could influence its success, including coverage parameters, pricing, and potential regulation of compounding pharmacies.

Eli Lilly's Zepbound, which uses tirzepatide as the active ingredient, underperformed in sales during the third quarter of 2024, raising concerns among investors [2]. Conversely, Novo Nordisk's Wegovy has reassured investors with its subsequent sales performance. The potential expansion of coverage under Medicare and Medicaid could help drive higher sales volumes for these drugs, potentially offsetting any underperformance.

The pharmaceutical industry has been under scrutiny for high drug prices, and the Trump administration has been vocal about its intention to lower U.S. drug prices. The proposed coverage of weight loss drugs could be seen as a step towards addressing access issues while also maintaining a focus on cost-effectiveness.

The next few months will be crucial in determining whether this plan gets implemented. Stay tuned for further developments, as this could have significant implications for both the pharmaceutical industry and healthcare policy.

References:
[1] https://www.cnbc.com/2025/08/05/healthy-returns-trump-administration-to-pilot-covering-obesity-drugs.html
[2] https://www.moomoo.com/news/post/37909820/record-tr4cking-news-default