Eli Lilly CEO Sees Medicare Coverage Support Upcoming Obesity Pill Launch: Report

CEO Dave Ricks said in an interview with CNBC that many patients are currently paying in cash for the oral obesity drug from rival Novo Nordisk.

• Ricks expects to have Medicare coverage for its oral obesity drug Orforglipron immediately following launch. 
• The FDA is expected to approve the drug in April. 
• According to the CEO, about 20 million to 30 million Medicare beneficiaries could be eligible for GLP-1 treatments and the coverage could be a “big multiplier on the eligible pool.”

CEO of Eli Lilly & Company (LLY) reportedly said on Friday that the rollout of the company’s oral obesity drug could be influenced by the upcoming Medicare coverage of obesity drugs.

Dave Ricks said in an interview with CNBC that Lilly expects to have Medicare coverage for the treatment “immediately following that launch, and that will change the game a bit too.”

The CEO noted that many patients are currently paying in cash for the oral obesity drug from Danish drugmaker and rival Novo Nordisk (NVO). Reuters reported last week, citing IQVIA data shared by analysts, that Novo’s weight-loss pill was prescribed 18,410 times in the week ended Jan. 16 or its first full week after launch. As per the report, this was a stronger debut than observed with Novo’s injectable Wegovy or its rival Lilly’s Zepbound.

Oral Obesity Drugs

Oral obesity pills are expected to be the next major innovation in the obesity market, doing away with needles and offering customers more flexibility and ease.

The U.S. Food and Drug Administration (FDA) approved the Wegovy pill to reduce body weight and maintain weight reduction for a longer term in December.

The Wegovy pill is now the first FDA-approved oral GLP-1 class drug for weight management and marks a crucial step forward for the company in its ongoing efforts to protect market share from Eli Lilly, whose injectable GLP-1 drug Zepbound is fast taking over Wegovy’s market dominance. The company launched the Wegovy pill earlier this month.

Lilly is looking forward to getting FDA approval for its oral obesity drug Orforglipron by April.

According to Ricks, early adopters of Novo’s Wegovy pill are new to GLP-1 treatments rather than users of existing injections. This implies that the drug is reaching more patients and that is great, the CEO said, while expressing confidence in his company’s obesity pill. As per the report, Lilly is preparing for a full launch in the second quarter.

Deal For Medicare

Medicare coverage for obesity drugs was part of the deal struck by Novo Nordisk and Eli Lilly with President Donald Trump late last year. Medicare will start covering obesity medicines for the first time later this year and the government coverage will bring the price point of the oral pills lower in the second half of the year, Ricks said.

According to Lilly’s CEO, about 20 million to 30 million Medicare beneficiaries could be eligible for GLP-1 treatments and the coverage could be a  “big multiplier on the eligible pool.”

Under Lilly’s deal with Trump, the company will also lower prices on some of its medicines this year. But the company will ramp volume growth in the back half of the year, the CEO told CNBC, providing a “positive balance.”  

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around LLY stock stayed within the ‘bearish’ territory over the past 24 hours, while message volume remained at ‘normal’ levels.

LLY stock has gained 26% over the past 12 months. 

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