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On Friday, shares of Eli Lilly & Co (NYSE:LLY). and Novo Nordisk (NYSE:NVO) A/S experienced declines in after-hours trading following the Trump administration’s decision not to proceed with a Medicare regulatory update that could have expanded coverage for obesity drugs. The Centers for Medicare and Medicaid Services (CMS) had been considering a proposal from the Biden administration that would have potentially provided access to these medications for millions of older adults. CMS indicated that it might revisit the possibility of covering these drugs at a later date.
Eli Lilly’s stock fell by 2.3% to close at 4:35 PM ET in after-hours trading, while Novo Nordisk’s American depositary receipts saw a decrease of 1.7%. This development came as a surprise to investors who had been anticipating a favorable ruling for the coverage of obesity drugs under Medicare.
The proposal under consideration by CMS was aimed at addressing the needs of older Americans struggling with obesity, a condition that can lead to more serious health issues. The decision to postpone a verdict on this matter leaves the status of obesity drug coverage for Medicare recipients uncertain.
Both Eli Lilly & Co. and Novo Nordisk A/S are significant players in the weight-loss drug market, and their financial performance is closely tied to regulatory decisions that affect drug coverage and accessibility. The delay in the Medicare decision could impact the companies’ strategies and market expectations moving forward.
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