Eli Lilly (LLY.US) CEO Dave Ricks stated on Friday that the impending inclusion of weight-loss medications in the U.S. Medicare reimbursement system will serve as a significant catalyst for the market launch of the company's closely watched experimental oral weight-loss drug, orforglipron. In an interview, Ricks noted that Eli Lilly anticipates Medicare will concurrently add this oral drug to its Part D coverage upon its approval, an action he described as something that "will also change the market game rules to some extent." He explained that currently, many patients still have to pay out-of-pocket for GLP-1 class oral weight-loss drugs, such as those from Novo Nordisk (NVO.US). Although Medicare coverage is not yet comprehensive, the market response to a recently launched drug has been robust.
Ricks also mentioned observing that early users of Novo Nordisk's oral weight-loss drug Wegovy were predominantly first-time patients trying GLP-1 therapy, rather than individuals who had previously used injectable versions of such drugs. This trend suggests "the drug's market reach is expanding, accessing more patients, which is a positive signal," he remarked. He added that Eli Lilly is confident in the market competitiveness of its own oral drug and is preparing for a full market launch in the second quarter of this year.
This launch timeline is set to align with the implementation of a new U.S. Medicare policy. According to a drug pricing agreement reached by Eli Lilly and Novo Nordisk with the U.S. President last November, the Medicare system will, for the first time, begin covering weight-loss drugs later this year. Ricks indicated that in the second half of the year, this Medicare coverage is expected to further reduce the out-of-pocket costs for such oral medications. Eligible Medicare beneficiaries using all approved GLP-1 class injectable and oral drugs (including those for diabetes and obesity treatment) will reportedly pay only a copay of around $50 per month.
"This policy will substantially expand the market space, and the subsequent market potential is highly promising," Ricks stated. The inclusion of weight-loss drugs in Medicare coverage is a long-awaited move for the industry. Several healthcare experts believe it will not only enlarge the market size for these drugs but also encourage more private insurers to follow suit and include them in their reimbursement plans. Ricks estimated that between 20 million and 30 million Medicare beneficiaries in the U.S. who have obesity or related complications could potentially meet the criteria for GLP-1 therapy, meaning the implementation of Medicare coverage would significantly expand the potential user base for these drugs.
Ricks also acknowledged that, under the terms of the recently agreed drug pricing deal, some of Eli Lilly's relevant drugs will see price reductions early this year. The agreement requires pharmaceutical companies to voluntarily lower drug prices, including offering existing drugs to Medicaid patients at prices comparable to the lowest international prices, and committing to so-called "most-favored-nation" pricing principles for new drugs. However, Ricks expressed confidence that volume growth for Eli Lilly's drugs "will accelerate in the second half of the year."
"We believe this balance between pricing and volume is positive for the company, though the final outcome will still need time to be verified," he added, noting that the growth in drug volume will depend on the acceptance rate among Medicare patients and Eli Lilly's market share in this segment. Ricks revealed that Eli Lilly will disclose the specific financial impact of this pricing agreement when it reports its Q4 2025 earnings and provides its 2026 guidance next week.
The drug pricing agreement also includes a commitment for pharmaceutical companies to offer a self-pay purchasing channel for relevant drugs at discounted prices on the TrumpRx platform, a direct-to-consumer initiative. While the platform was originally slated for a January launch, it has not yet officially become operational. Ricks mentioned that Eli Lilly is the first pharmaceutical company to sell weight-loss drugs directly to patients through its own platform, LillyDirect, and the TrumpRx platform aims to extend this direct-to-consumer model to other drug categories across the healthcare industry. "We fully support this," he said.
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