CVS Health has announced a significant expansion of its coverage for Eli Lilly's weight-loss medications, confirming it will restore the popular injection Zepbound to its formulary and add the newly approved obesity pill, Foundayo. This move marks a pivotal shift for patients seeking access to these highly sought-after treatments.
Reversal of Previous Decision
The decision, announced on Thursday, reverses a previous move by CVS Caremark, one of the nation's largest pharmacy benefit managers, which had removed Zepbound from its covered list on July 1 last year. At that time, CVS continued to reimburse for rival Novo Nordisk's Wegovy, citing a more favorable pricing agreement. Following the announcement, Eli Lilly's shares rose over 5% in morning trading.
Details of Coverage Change
Zepbound is slated to return to CVS Caremark's commercial formularies as an additional preferred option starting October 1. Foundayo, meanwhile, will be included in the standard commercial formulary template as a co-preferred weight-loss drug from Monday, following the removal of a new-to-market block. This strategic change aims to provide employers and health plans with more affordable access to GLP-1 weight-loss treatments.
A CVS spokesperson clarified the impact, stating: "What this change means is that, for those clients that do (choose to provide coverage), they will have equal access to both the Novo and Lilly products, and consumers will have the same copays for each."
Patient Costs and Market Impact
Eligible patients with commercial coverage can expect to pay as little as $25 a month for Lilly's Zepbound and Foundayo, aligning with the cost structure for Novo's competing weight-loss drugs. Pharmacy benefit managers, which negotiate rebates with drugmakers and manage formularies, play a crucial role in determining drug accessibility. With this development, all three of the largest U.S. pharmacy benefit managers now cover Lilly's complete portfolio of obesity medicines.
BMO Capital Markets analyst Evan Seigerman highlighted the potential benefits for Lilly, suggesting that more affordable access through CVS's approximately 90 million patients could significantly boost Foundayo sales in the latter half of the year.
