Lilly Anticipates Higher Zepbound Costs as Obesity Pill Approaches Phase III Results

More patients are now paying the full list price for Eli Lilly’s weight-loss drug Zepbound (tirzepatide) compared to the sister drug Mounjaro (tirzepatide), which is used for type 2 diabetes. This information was shared by Patrik Jonsson, President of Lilly Diabetes and Obesity, at the Goldman Sachs 45th Annual Global Healthcare Conference.

Jonsson pointed out that in the U.S., a mid-single-digit percentage of patients have to pay out-of-pocket for Zepbound, while only a low-single-digit percentage do so for Mounjaro. Both drugs share the same active ingredient, but their indications differ. Mounjaro is covered for type 2 diabetes, resulting in better coverage and less out-of-pocket expenditure for patients. In contrast, Zepbound is explicitly indicated for weight loss, which currently has less comprehensive coverage.

The limited coverage for Zepbound is a significant factor contributing to this disparity. According to Jonsson, there is full coverage for Mounjaro, while access to Zepbound remains good but not yet complete. A particular concern is the Medicare patient group, who are often required to pay the list price due to existing regulations, leaving them with no other option.

The Centers for Medicare and Medicaid Services (CMS) cover GLP-1 receptor agonists like Mounjaro for diabetes treatment, but not for weight loss. However, a recent policy change by CMS in April 2024 could signal a positive shift. CMS agreed to cover Novo Nordisk’s weight-loss drug Wegovy (semaglutide) for reducing the risk of heart attack and stroke in obese adults with cardiovascular disease. This could potentially open doors for similar coverage for Zepbound and other tirzepatide-based treatments.

Jonsson highlighted this development as promising for Eli Lilly’s tirzepatide brands, especially as the company is advancing GLP-1 agonists into new indications. In April 2024, Eli Lilly presented strong Phase III data for Zepbound in obstructive sleep apnea. The company is also developing tirzepatide for treating heart failure with preserved ejection fraction, with expectations that these new indications may lead to broader Medicare coverage.

Looking ahead, Eli Lilly is optimistic about orfoglipron, its next-generation weight-loss candidate. Orfoglipron is an oral pill designed to be taken once daily. In June 2023, the company released Phase II data showing that orfoglipron reduced patients’ body weight by 8.6% to 12.6% over 26 weeks. This weight loss was sustained through 36 weeks, with a slight increase to 9.4% to 14.7%.

According to Jonsson, Eli Lilly anticipates the first readout for the Phase III study of orfoglipron in April 2025. The company plans to release complete data by the end of 2025, including results from head-to-head trials with Farxiga (dapagliflozin) and Rybelsus (semaglutide) in type 2 diabetes. Jonsson expressed strong confidence in orfoglipron based on the data observed so far.

Eli Lilly's headquarters in Indianapolis remains a pivotal center for the company's global operations. The company's efforts in advancing weight-loss treatments and expanding indications for its existing drugs demonstrate a significant focus on addressing obesity and related health issues.