Medicare Approval Creates Opportunity for Eli Lilly’s Zepbound in Sleep Apnea Treatment
In a significant development for Eli Lilly & Co., the Centers for Medicare and Medicaid Services (CMS) has confirmed that Medicare Part D plans can now cover the company’s obesity drug Zepbound as a treatment for obstructive sleep apnea (OSA). This news comes after the U.S. Food and Drug Administration (FDA) approved Zepbound for patients dealing with obesity and mild to moderate OSA on December 20, marking it as the first approved treatment option specifically targeting the approximately 20 million individuals suffering from this disorder.
Understanding Zepbound and Obstructive Sleep Apnea
Zepbound, which is not widely covered by Medicare or many insurance plans when aimed solely at weight loss, is an injectable treatment that carries an estimated out-of-pocket cost of about $1,000 per month without insurance. Obstructive sleep apnea is characterized by the blockage of a person’s upper airway during sleep, resulting in breathing interruptions. While OSA can afflict anyone, it is particularly prevalent among overweight individuals.
Zepbound is classified as a GLP-1 (glucagon-like peptide) drug, functioning by imitating a hormone involved in digestion and appetite regulation. Traditionally, OSA treatment relies on positive airway pressure (PAP) devices, but a notable portion of patients find these machines unsuitable for various reasons.
Significant Prescription Growth Potential
The potential for Zepbound to penetrate the market is considerable. David Risinger, a Leerink analyst, estimates that this recent change in Medicare coverage could introduce an additional 3.7 million prescriptions for Zepbound. Currently, about 700,000 patients in the U.S. were using Zepbound as of the third quarter, according to his calculations. This growth represents an intriguing opportunity for Eli Lilly as they expand their reach in the pharmacological treatment of obesity and its complications.
Competition in the Obesity Drug Market
Eli Lilly is not the only player in the obesity drug arena. Its chief competitor, Novo Nordisk, has its own offerings, including Wegovy, which has attained FDA approval for cardiovascular risk reduction. Both companies are exploring GLP-1 drugs for various other medical conditions such as chronic kidney disease and fatty liver disease. Notably, Lilly’s diabetes medications, Ozempic and Mounjaro, are already covered by Medicare and numerous insurance plans, further enhancing their market positioning.
Market Performance and Future Outlook
The stock performance of Eli Lilly indicates market optimism; shares of the company have surged by 26% in the past year, outpacing the S&P 500, which has seen a 24% increase in the same timeframe. This robust growth is largely attributed to the company’s expanding drug portfolio and the favorable response from both the market and the regulatory landscape.
Conclusion: A New Era in Obstructive Sleep Apnea Treatment
The inclusion of Zepbound under Medicare’s coverage for obstructive sleep apnea treatment represents a groundbreaking shift that could provide relief for millions affected by the disorder. As Eli Lilly and Novo Nordisk continue to advance their research and development efforts for GLP-1 drugs, the drug market landscape is poised for transformation. These changes underscore the importance of innovative treatments addressing both obesity and related health conditions, promising a brighter health future for patients and a lucrative opportunity for pharmaceutical companies alike.