Will Trump Nix Biden’s Coverage Plan for Weight-Loss Drugs? A Close Call Ahead

Overview of the Coverage Proposal

As President-elect Donald Trump prepares to take office, many policies of the outgoing Biden administration are on the chopping block, including the proposal for Medicare and Medicaid to cover GLP-1 weight-loss drugs. This proposal has gained considerable attention in recent months, with industry analysts closely monitoring its fate under Trump’s leadership. According to Kim Monk, a healthcare-policy analyst at Capital Alpha Partners, the likelihood of Trump maintaining this coverage proposal remains uncertain.

Cost Concerns and Political Dynamics

Monk believes that the substantial financial implications of Biden’s proposal could lead the Trump administration to scrap it. The rollout of the coverage plan, which occurred on November 26 amidst Democratic setbacks in the elections, has raised eyebrows regarding its viability under a new presidency. In her assessment, Monk leans slightly toward the expectation that the proposal will not be finalized.

Influence of Mehmet Oz

However, Trump’s selection of television personality and health figure Mehmet Oz to lead the Centers for Medicare and Medicaid Services (CMS) may complicate matters. Oz is a strong proponent of GLP-1 drugs such as Ozempic and Wegovy, which are produced by Novo Nordisk. Monk states, “Dr. Oz will be given pretty good authority to represent his issues at CMS, and [is] capable of being persuasive.” Thus, Oz’s influence may push Trump toward supporting the Biden coverage plan, despite the potential pushback from the administration’s other advisors.

Conflict within Trump’s Health Advisory Picks

The decision ultimately lies with Trump himself, but he is likely to face contrasting opinions from his appointed health officials. Notably, Robert F. Kennedy Jr., the head of the Department of Health and Human Services, has been an outspoken critic of GLP-1 weight-loss drugs. While there might be scope for dialogue between Kennedy and Oz on certain health issues, their past disagreements on weight-loss drugs could hinder a unified front.

The Role of Health Policy Experts

Monk posits that the dynamic between Oz’s support for GLP-1 drugs and Kennedy’s skepticism could play a pivotal role in shaping the Trump administration’s health agenda. She notes, “It’s possible that RFK and Dr. Oz could get on the same page on that issue, but they obviously have had very different viewpoints in the past.”

Elon Musk’s Position

To further complicate the landscape, billionaire entrepreneur Elon Musk, tasked with cost-cutting initiatives, has expressed both an interest in reducing government spending and a personal endorsement of GLP-1 drugs like Wegovy. Musk stated, “Solving obesity greatly reduces the risk of other diseases, especially diabetes, and improves quality of life,” emphasizing the need for broader access to these medications. His dual roles could lead to nuanced discussions within the Trump administration about the future of obesity treatment plans.

The Implications Beyond Coverage

Another layer to the coverage proposal is its connection to the Democrats’ Inflation Reduction Act (IRA) of 2022, which includes provisions for drug-price negotiation. Monk hinted that Biden’s weight-loss drug proposal could nudge the Trump administration to maintain essential aspects of the IRA. She noted, “The Biden plan would ‘go into effect in 2026, and, by the way, that’s when at least Wegovy and Ozempic will be subject to IRA price controls.’” This could create an interesting interplay between the two administrations concerning drug pricing and health care access.

Market Reactions and Future Outlook

Despite uncertainties surrounding the Biden coverage plan, shares in Novo Nordisk and Eli Lilly & Co. (producer of Zepbound), two leading companies in the weight-loss drug market, saw positive movement following the release of the proposal. Yet, analysts caution that the proposal may not be implemented due to various reasons, including changing political landscapes and economic realities.

Conclusion

The future of Biden’s coverage proposal for GLP-1 weight-loss drugs under a Trump administration remains uncertain. While there are compelling arguments for its retention, especially influenced by the perspectives of Oz and Musk, the deeply entrenched opposition from figures like Kennedy could present significant challenges. As the new administration prepares to take shape, stakeholders in the healthcare sector will be watching closely to see if Trump’s decision aligns with or diverges from Biden’s ambitious healthcare initiatives.