Eli Lilly CEO David Rex talks about Medicare coverage of obesity pills

Eli Lilly Upcoming Medicare coverage for obesity drugs could be a major catalyst for the rollout of an experimental weight-loss pill the company is closely monitoring, orforglipron, Chief Executive Dave Rex said Friday.

In an exclusive interview with CNBC, Rex said Lilly expects to gain Medicare coverage for the treatment “right after this launch, and that will change the game a little bit as well.”

That’s because many patients currently pay cash for a competitor, he said Novo NordiskGLP-1 pills for obesity. That launched earlier this month and is off to a strong start, even with spotty insurance coverage.

Rex said he’s noticed that almost all of the early users of Novo’s Wegovy pill are new to GLP-1 therapies and not users of existing injections, so “it’s expansive, reaching more patients and that’s great.”

He added that Lilly is confident in its cereal’s ability to compete and is preparing for a “full launch” in the second quarter. The launch is scheduled to coincide with Medicare starting to cover obesity drugs for the first time later this year under drug pricing deals Lilly and Novo struck with President Donald Trump in November.

Rex said government coverage would lead to lower grain prices in the second half of the year. Some Medicare patients will pay a copayment of $50 per month for all approved uses of injectable and oral GLP-1 drugs, including treatment of diabetes and obesity.

“This opens things up wide, and we’ll see where we can go from there,” Rex said.

Medicare coverage of obesity treatments is a long-awaited step that some health experts say could expand the drug market and incentivize more private insurers to cover them. Rex estimates that between 20 million and 30 million Medicare beneficiaries with obesity and related health conditions could be eligible for GLP-1 treatments, so coverage is a “large multiple of the eligible group.”

Rex admitted that under the drug pricing deal, there would be a “pricing rollback” as early as this year. The agreements involve drugmakers voluntarily offering their drugs at a lower cost, including selling their existing treatments to Medicaid patients at the lowest prices abroad, and ensuring so-called “most favored nation” pricing for new drugs.

But Lilly’s drug volume growth “will ramp up in the latter half of the year,” Rex said.

“We think this is a positive balance for us, but time will tell,” he said, adding that it will depend on the uptake of the treatments among Medicare patients and the company’s share of that adoption.

Lilly will share more details about the financial impact of the deal when it reports fourth-quarter earnings and 2026 guidance next week, he said.

The pricing agreements include commitments to launch the drugs at discounted cash prices on Trump’s direct-to-consumer platform, TrumpRx. That site, which was expected to launch in January, is not yet live.

Lilly was the first drug company to sell obesity treatments directly to patients through the company’s platform, LillyDirect, and TrumpRx is “taking that and expanding it across the industry” to include other drugs, Ricks said.

“We’re all for it,” he said.