Medicare Expands Coverage for Eli Lilly’s Zepbound Drug

Eli Lilly's Zepbound gains Medicare coverage for sleep apnea treatment, expanding access to the high-cost obesity drug.

Eli Lilly's weight-loss drug Zepbound just got a huge vote of confidence. The Centers for Medicare & Medicaid Services announced on Wednesday that it will cover the therapy for use in the treatment of sleep apnea with government-backed Medicare insurance plans. Zepbound is an obesity drug that recently became the first and only therapy so far approved by the U.S. Food and Drug Administration for the treatment of sleep apnea, a common sleep disorder.

Sleep apnea is a condition in which one billion people worldwide stop breathing occasionally during sleep, leading to the disorganization of the sleep cycle and long-term health issues, including cardiac issues. While CPAP machines, surgery, and weight loss are among the treatments available to date, Zepbound is added into Medicare as a new pathway for helping those suffering from the condition.

Previous to the expansion, high-cost treatment valued at more than $1,000 a month, commercial insurance was reluctant to cover. Still, with an allowance for sleep apnea treatment, Zepbound has gained strong grounds to its argument on having wider coverage as Medicare cannot afford to pay for obesity drugs in place without the approval of the FDA to be used as secondary.

While CMS's guidance opens the door to wider availability, insurers can choose not to include Zepbound in their coverage. This decision comes after a similar move was made for Novo Nordisk's obesity drug Wegovy, which was approved for Medicare plans to reduce the risk of heart attacks and strokes.

Eli Lilly and Novo Nordisk are all testing their GLP-1 agonist drugs for a range of conditions, all going full steam ahead to make the claim that these drugs have health benefits in addition to treating obesity. Analysts predict that the market for GLP-1 drugs could reach over $150 billion annually by the early 2030s.