Eli Lilly's Zepbound Can Now Be Covered by Medicare to Treat Sleep Apnea

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, but can be covered when prescribed to treat another disease like sleep apnea.
• The Biden administration proposed including the drugs in Medicare and Medicaid coverage in November as a treatment for obesity.

Popular Eli Lilly (LLY) weight-loss drug Zepbound can be covered by Medicare plans to treat sleep apnea after it received Food and Drug Administration (FDA) approval last month.

A Center for Medicare and Medicaid Services spokesperson told Investopedia Thursday that "current Medicare Part D and Medicaid coverage rules apply" to Zepbound, meaning, it can be added to Part D plans and covered by Medicare. Millions of Americans are estimated to suffer from obstructive sleep apnea, a sleep disorder.

Eli Lilly and Ozempic and Wegovy-maker Novo Nordisk (NVO) are testing their weight-loss drugs' abilities to treat conditions that typically accompany obesity, such as diabetes and sleep apnea. The change was first reported Wednesday by CNBC.

The drug can also be covered by state-level Medicaid programs if it is prescribed to treat sleep apnea, and if the drug maker is part of a Medicaid drug rebate program. About 780 companies participate in the rebate program, which covers drugs under Medicaid plans in exchange for the companies paying rebates that are split between states and the federal government to offset the cost of the drugs.

Zepbound was approved to treat sleep apnea after clinical trials found that patients taking the drug with or without traditional sleep apnea treatments, like a mask, experienced a reduction in breathing interruptions during a night of sleep.

The Biden administration in November proposed including the weight loss drugs in Medicare and Medicaid plans as a prescribed treatment for obesity.

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