Zippound injection pen, Eli Lilly's weight-loss drug, is on display in New York City on December 11, 2023.
Brendan McDiarmid | Reuters
Medicare drug plans can now cover you Eli LillyCNBC confirmed on Wednesday that the blockbuster obesity drug Zepbound has been used to treat obstructive sleep apnea.
This opens the door to broader access to Zepbound, which is not currently covered by Medicare and many other weight loss insurance plans. Demand for the injection has soared over the past year despite its $1,000-a-month price tag before insurance.
In a statement to CNBC, a spokesperson for the Centers for Medicare and Medicaid Services, an agency under the U.S. Department of Health and Human Services, said that “existing Medicare and Medicaid Part D coverage rules apply” to Zepbound following its landmark approval in December for the most common sleep-related breathing disorder.
Medicare Part D plans can only cover obesity drugs if they are used for an additional medically acceptable purpose and approved by the Food and Drug Administration, a CMS spokesperson said, referring to the agency's guidance. The spokesperson added that Part D plans may consider using prior authorization — a process in which a provider must first obtain approval from the insurance company — for those drugs to ensure they are used for that specific purpose.
The U.S. Food and Drug Administration on Dec. 20 approved Zepbound for use in patients with obesity and moderate to severe forms of obstructive sleep apnea, or OSA, which refers to interruption of breathing during sleep due to narrowing or blockage of the airways. This makes Zibound the first cleared drug treatment for the estimated 20 million people suffering from those forms of the disease, according to Eli Lilly.
Medicare Part D plans are similarly permitted to cover it Novo NordiskWeight-loss drug Wegovy's other approved use: lowering cardiovascular risk. Wegovy and Zepbound's diabetes counterparts — Ozempic and Mounjaro, respectively — are covered by Medicare and most insurance plans.
Novo Nordisk and Eli Lilly are studying weight-loss drugs as a treatment for fatty liver disease, chronic kidney disease, sleep apnea, and more. To be covered, these drugs would need to return results from late-stage trials and then submit for FDA approval for those uses.
Meanwhile, state Medicaid coverage for Zepbound and other obesity drugs depends on the condition for which they are prescribed and whether their manufacturer has signed a certain Medicaid drug rebate agreement, according to a spokesperson.
Under this agreement with the Secretary of Health and Human Services, manufacturers agree to offer rebates to states in exchange for Medicaid coverage of their drugs. States share rebates with the federal government.
The state Medicaid program must cover Zepbound if it is prescribed for OSA and Eli Lilly signed a Medicaid drug rebate agreement, the spokesperson said.
But if Zepbound is prescribed for weight loss, state Medicaid programs are not required to cover it.
The Biden administration in November proposed a rule that would allow Medicare and Medicaid to cover weight-loss drugs for patients with obesity. This rule would allow millions of people to get weekly injections, but it would cost taxpayers up to $35 billion over the next decade.
It is unclear whether President-elect Donald Trump's administration will follow this rule.
