LLY, NVO Stocks Slide As Health Insurers Balk At Medicare Coverage For Obesity Drugs

• UnitedHealth said that the company would “like to find a path” to covering obesity drugs over time.
• The company also said that it is continuing dialogue with the Centers for Medicare & Medicaid Services.
• According to Bloomberg, Trump's program cannot move forward unless most insurers sign up.

Shares of popular obesity drug makers Novo Nordisk (NVO) and Eli Lilly (LLY) slipped on Tuesday after major health insurance companies raised doubts about the Trump administration’s plan to cover GLP-1 weight-loss drugs under Medicare starting in 2027.

NVO and LLY shares traded 2% lower at the time of writing. 

Insurers Are Skeptical

A CVS Health spokesperson told Bloomberg the company has declined to participate in the program. Aetna, CVS Health’s insurance unit, is one of the nation’s largest health insurers.

UnitedHealth also raised concerns during its earnings call earlier on Tuesday. “We'd like to find a path to yes there on coverage over time, but there are some notable challenges and outstanding questions with the currently planned structure,” the company’s chief of government programs Bobby Hunter said on the company’s first quarter earnings call.

Hunter also said that the company is working through the process internally and looks forward to continuing dialogue with the Centers for Medicare & Medicaid Services. “We've provided some specific recommendations that we believe would serve all stakeholders really well,” he added.

In November 2025, President Donald Trump announced deals with Novo Nordisk and Eli Lilly aimed at cutting prices on their drugs in the U.S. in return for a promise of expanding Medicare coverage on their popular weight loss drugs such as Wegovy and Zepbound. The administration subsequently gave insurers a deadline of April 20 to confirm if they would participate in the plan or not.

According to Bloomberg, the program cannot move forward unless most insurers sign up. 

Medicare has never previously covered obesity or weight-loss medications when prescribed specifically for chronic weight management.

Obesity Drug Developers Voice Hopes

Eli Lilly CEO Dave Ricks has previously expressed optimism that Medicare coverage will aid the launch of the company’s oral obesity drug Foundayo (orforglipron), which the FDA approved earlier this month.

In a January interview with CNBC, Ricks said Lilly expects Medicare coverage “immediately following that launch, and that will change the game a bit too.” He added that roughly 20 million to 30 million Medicare beneficiaries could be eligible for GLP-1 treatments, calling the coverage a “big multiplier on the eligible pool.”

How Did Retail Traders React?

On Stocktwits, retail sentiment around LLY and NVO stocks stayed within the ‘bullish’ territory at the time of writing, coupled with ‘high’ message volume

While LLY has gained 11% over the past 12 months, NVO stock has fallen nearly 32%. 

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