Shares of Danish weight-loss drug maker Novo Nordisk rose 1.3% on Tuesday after US President Joe Biden proposed expanding coverage of anti-obesity drugs for millions of people on Medicare and Medicaid.
“This is an important step forward for patients,” Novo Nordisk said in a statement commenting on the proposal, adding that coverage could come into effect in 2026.
The shares pared their early gains of up to 4.9% to trade 1.3% higher at 12:36 GMT.
Current rules for the government health insurance programs Medicare and Medicaid cover the use of drugs such as Mounjaro, Ozempic and Wegovy for certain conditions such as diabetes, but not for obesity as a condition in itself.
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Novo Nordisk Stock Rises as Biden Proposes Obesity Care Coverage
The White House said in a statement that the proposal could reduce out-of-pocket costs for weight-loss drugs by up to 95%, expanding access to millions of Americans.
Nordnet analyst Per Hansen said the move in Novo Nordisk shares came in the wake of the proposal, with US peer Eli Lilly.
Separately, a potential rival in the fast-growing obesity therapy market is Amgen with its experimental drug MariTide, which caused an average weight loss of up to 20% in a mid-stage trial with participants with overweight or obese.
However, Amgen shares fell nearly 8% before the US market opened as the data fell short of investor expectations.
With information from Reuters.
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