Medicare will start covering obesity drugs for the first time. Here's what patients should know

Medicare begins covering obesity drugs Wednesday, unlocking access to GLP-1 medications for millions of seniors previously unable to afford treatment. The policy shift creates a major new patient population for Novo Nordisk (NVO) and Eli Lilly (LLY), the two dominant players in the obesity drug market.

The coverage expansion marks the first time Medicare has paid for weight-loss medications, removing a longstanding barrier for older Americans. GLP-1 drugs like Novo Nordisk's Wegovy and Eli Lilly's Zepbound have carried retail prices often exceeding $1,000 per month, pricing out most seniors without supplemental insurance.

Both companies stand to benefit from the expanded addressable market. Medicare serves approximately 67 million Americans, though the exact number meeting eligibility criteria for obesity treatment remains unclear. The move comes as both drugmakers compete aggressively for market share in the rapidly growing weight-loss segment, which analysts project could reach $100 billion annually within the decade.