Biden administration pushes anti-obesity drug pressure to Trump

• But the drugs are pricey, and insurers, advocacy groups and policymakers warn that opening up coverage for them could be a recipe for runaway costs in an already financially taxed system.

Driving the news: Under current law, Medicare is barred by Congress from covering drugs for weight loss. They're covered only as an optional benefit on state Medicaid plans, and coverage varies by state.

• Biden administration officials say they're reinterpreting the statute by addressing obesity as a chronic condition rather than weight loss.
• "I have heard from countless people about how this coverage exclusion is a barrier preventing people from treating obesity and living healthier lives," Centers for Medicare and Medicaid Services administrator Chiquita Brooks-LaSure said in a call with reporters.

By the numbers: The Biden administration's move, which would take effect in 2026, would expand access to drugs like Novo Nordisk's Ozempic or Wegovy for 3.4 million Americans on Medicare and another 4 million on Medicaid who are obese, per the White House. Officials said they do not expect this would raise seniors' premiums.

• Officials estimated the cost to the federal government of the proposed coverage over 10 years would be roughly $25 billion for Medicare and $11 billion for Medicaid. Biden administration officials estimate states would shoulder roughly $3.8 billion in additional spending during that time.
• Medicare opening coverage to anti-obesity drugs would likely have a much broader impact on access to the drugs via employer coverage, said Kathy Hempstead, a health insurance expert at the Robert Wood Johnson Foundation.
• "The fact that there is such a patchwork of access to this drug is something that strikes a lot of Americans as being unfair. You just sort of randomly might or might not have access to this medication, depending on where you work or what state you live in," she said, adding the current proposal from the White House could be a path to universal coverage.

The other side: It's unclear how the Trump administration will view Medicare coverage of GLP-1s. Health and Human Services secretary nominee Robert F. Kennedy Jr. has slammed use of the drugs while CMS administrator nominee Mehmet Oz has sung their praises.

• The cost is expected to be a key sticking point, particularly as the administration promises to cut back federal spending, Capstone's Hunter Hammond wrote in a note.
• The Trump transition team did not respond to a request for comment.

Between the lines: Generally, rules proposed late in one administration are put on hold or set aside by incoming administrations in favor of their own policy priorities.

• But expanding coverage to the drugs is likely to be popular among seniors who make up a core part of Trump's base.

"We view this more as a parting shot from the outgoing administration, particularly given the likely cost of adding GLP-1 coverage," Evercore ISI analyst Elizabeth Anderson said in note.

• "It's more likely that the proposed ruling may not get finalized (at least not in its current form) given the timing, but helps to raise the profile of this issue further."
• "We have some cautious optimism," Joe Nadglowski, CEO of the Obesity Action Coalition, told Axios. "We've gotten some mixed messages from members of the Trump administration and his team around these therapies. But I think the reality is that obesity is going to be a major issue for the administration."

Between the lines: While a Trump administration might be reticent to put its stamp of approval on a Biden proposal, it may also be a political win to allow this proposal or something like it to cross the finish line, Larry Levitt, executive vice president for policy at KFF, told Axios in an email.

• And members of Congress on "the Hill would be happy to have this done by regulation so they don't have to pay for it."

Friction point: The Alliance of Community Health Plans said the proposal would have "enormous cost consequences for consumers, taxpayers and employers."

• "The proposed expansion is irresponsible without further analysis and stakeholder engagement. It's high time policymakers focus on exorbitant costs and appropriate utilization," it said in a statement.

What to watch: It's unclear whether the proposal would make it through the courts.

• "Even if finalized, legal challenges overturning the rule are highly likely to be successful," Chris Meekins, an analyst at Raymond James who worked at HHS in the first Trump administration, wrote in a note.