An injection pen of Zepbound, Eli Lilly’s weight loss drug, is displayed in New York City on Dec. 11, 2023.

Brendan McDermid | Reuters

Medicare drug plans can now cover Eli Lilly‘s blockbuster obesity drug Zepbound for obstructive sleep apnea, CNBC confirmed on Wednesday. 

That opens the door for broader access to Zepbound, which is not currently covered by Medicare and many other insurance plans for weight loss. Demand for the injection has soared over the last year despite its roughly $1,000 per month price tag before insurance.

In a statement to CNBC, a spokesperson for the Centers for Medicare & Medicaid Services, an agency of the U.S. Department of Health and Human Services, said “current Medicare Part D and Medicaid coverage rules apply” to Zepbound following its landmark approval in December for the most common sleep-related breathing disorder.

Medicare Part D plans can only cover obesity drugs if they are used for an additional medically accepted purpose approved by the Food and Drug Administration, the CMS spokesperson said, referring to the agency’s guidance. The spokesperson added that Part D plans may consider using prior authorization — a process where a provider must first get approval from an insurer — for those drugs to ensure they are being used for that specific purpose. 

The FDA on Dec. 20 cleared Zepbound for patients with obesity and moderate-to-severe forms of obstructive sleep apnea, or OSA, which refers to breathing interrupted during sleep due to narrowed or blocked airways. That made Zepbound the first drug treatment cleared for the estimated 20 million people with those forms of the disease, according to Eli Lilly.

In a statement on Thursday, Eli Lilly called Medicare’s coverage of Zepbound for the condition “good news.”

Medicare Part D plans are similarly allowed to cover Novo Nordisk‘s weight loss drug Wegovy for its other approved use: lowering cardiovascular risks. The diabetes counterparts of Wegovy and Zepbound — Ozempic and Mounjaro, respectively — are covered by Medicare and most insurance plans. 

Both Novo Nordisk and Eli Lilly are studying their weight loss medicines as treatments for fatty liver disease, chronic kidney disease, sleep apnea and more. To be covered, those drugs would need to return late-stage trial results and then be submitted for FDA approval for those uses.

Meanwhile, state Medicaid coverage for Zepbound and other obesity medications depends on what condition they are prescribed for and whether their manufacturer has signed a certain Medicaid drug rebate agreement, according to the spokesperson. 

Under that agreement with the secretary of Health and Human Services, manufacturers agree to provide rebates to states in exchange for Medicaid coverage of their drugs. States share the rebates with the federal government. 

A state Medicaid program must cover Zepbound if it is prescribed for OSA and Eli Lilly has signed the Medicaid drug rebate agreement, the spokesperson said. 

But if Zepbound is prescribed for weight loss, state Medicaid programs are not required to cover it. 

The Biden administration in November proposed a rule that would allow Medicare and Medicaid to cover weight loss drugs for patients with obesity. The rule would give millions of people access to weekly injectables, but it would cost taxpayers as much as $35 billion over the next decade.

It is unclear if President-elect Donald Trump’s administration will pursue the rule.

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An Eli Lilly & Co. Zepbound injection pen arranged in the Brooklyn borough of New York, US, on Thursday, March 28, 2024. 

Shelby Knowles | Bloomberg | Getty Images

The Food and Drug Administration on Friday approved Eli Lilly‘s blockbuster weight loss drug Zepbound for treating patients with the most common sleep-related breathing disorder, expanding its use and possibly its insurance coverage in the U.S.

The weekly injection is now the first drug treatment option cleared for patients with obesity and moderate-to-severe obstructive sleep apnea, or OSA, which refers to breathing interrupted during sleep due to narrowed or blocked airways. Zepbound should be used in combination with a reduced-calorie diet and increased physical activity, the FDA noted in a release.

An estimated 80 million patients in the U.S. experience the disease, according to Eli Lilly. Roughly 20 million of those people have moderate-to-severe forms of the disease, but 85% of cases go undiagnosed, the company told CNBC earlier this year.

“Too often, OSA is brushed off as ‘just snoring’ — but it’s far more than that,” said Julie Flygare, president and CEO of Project Sleep, a nonprofit advocating for sleep health and sleep disorders, in a release from Eli Lilly. “It’s important to understand OSA symptoms and know that treatments are available, including new options like Zepbound. We hope this will spark more meaningful conversations between patients and health care providers and ultimately lead to better health outcomes.” 

Eli Lilly expects to launch the drug for OSA at the beginning of next year. It is the first approval beyond obesity treatment for Zepbound, which entered the market late last year and is also being tested for several other obesity-related conditions, such as fatty liver disease. Tirzepatide, the active ingredient in Zepbound, has been sold on the U.S. market for longer as the diabetes drug Mounjaro.

The agency’s decision could pave the way for Eli Lilly to gain broader insurance coverage for Zepbound, which, like other weight loss drugs, is not covered by many insurance plans. That includes the federal Medicare program, which only covers obesity drugs if they are approved and prescribed for an added health benefit.

The approval also backs up mounting evidence that there could be further health benefits tied to GLP-1s, a class of weight loss and diabetes treatments that have soared in popularity and slipped into shortages over the past year. Notably, Zepbound’s main rival, the weight loss drug Wegovy from Novo Nordisk, is not approved for OSA.

Zepbound could be a valuable new treatment option for patients with OSA, which can lead to loud snoring and excessive daytime sleepiness, and can contribute to serious complications including stroke and heart failure. Patients with the condition have limited treatment options outside of wearing masks hooked up to cumbersome machines that provide positive airway pressure, or PAP, to allow for normal breathing.

Eli Lilly in April released initial results from the two clinical trials, which showed that Zepbound was more effective than a placebo at reducing the severity of OSA in patients with obesity after a year.

In June, Eli Lilly released additional data from the studies showing that Zepbound helped
resolve OSA in almost half of patients. The first study examined the weekly injection in adults with moderate-to-severe OSA and obesity who were not on PAP therapy. The second tested Zepbound in adults with the same conditions, but those participants were on and planned on continuing PAP therapy.

The data showed that 43% of people in the first study and 51.5% of patients in the second trial who took the highest dose of Zepbound achieved “disease resolution,” according to the company. That compares with 14.9% and 13.6% of patients who took a placebo in the two trials, respectively.

Researchers came to those conclusions by examining an apnea-hypopnea index, or AHI, which records the number of times per hour a person’s breathing shows a restricted or completely blocked airway. The index is used to evaluate the severity of obstructive sleep apnea and the effectiveness of treatments for the condition.

Disease resolution for OSA is defined as a patient having fewer than five AHI events per hour, the company said. It is also defined as a person having five to 14 AHI events per hour and scoring a certain number on a standard survey designed to measure excessive daytime sleepiness, according to Eli Lilly.

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