Key Takeaways Eli Lilly's Zepbound can be covered by Medicare Part D plans after the FDA approved the drug as a treatment for sleep apnea last month.Weight loss drugs like Zepbound and Novo Nordisk's Ozempic aren't covered under Medicare,

Eli Lilly's obesity drug Zepbound can now be covered by government-backed Medicare insurance plans for use in sleep apnea, broadening access to the blockbuster weight-loss treatment. The Wednesday statement from the Centers for Medicare & Medicaid Services comes after Zepbound in December became the first drug approved in the U.

Medicare now covers Eli Lilly's Zepbound for obstructive sleep apnea, FDA-approved for obesity and sleep apnea treatment, reducing apnea events by 62.8%.

According to BMO Capital Markets, Medicare coverage of Lilly’s Zepbound opens the door to using secondary indications to secure CMS coverage for obesity drugs.

Both Novo Nordisk and Eli Lilly are studying their weight loss drugs to treat fatty liver disease, chronic kidney disease, sleep apnea and more. To be covered, these drugs would need to have late-stage trial results and then seek FDA approval for these uses.

Terence Flynn, Biotech Analyst at Morgan Stanley, discusses Eli Lilly's recent stock boost and its designation as Morgan Stanley's top pick for 2025. He highlights the robust growth potential of Eli Lilly's drug Zepbound,