COPENHAGEN (Reuters) – Shares in Danish drugmaker Novo Nordisk (NYSE: ) rose 1.3% on Tuesday as U.S. President Joe Biden proposed expanding coverage of anti-obesity drugs to millions through Medicare and Medicaid.
“This is an important step forward for patients,” Novo Nordisk said in a statement commenting on the proposal, adding that the coverage could be implemented by 2026.
The stock pared early gains of as much as 4.9% to trade 1.3% higher at 1236 GMT.
The current rules of the federal 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 obesity as a single condition.
The White House said in a statement that the proposal could reduce the out-of-pocket cost of weight loss drugs by 95%, expanding access to millions of Americans.
Nordnet analyst Per Hansen said Novo’s share came after the proposal, with US peer Eli Lilly (NYSE: ) also rising in market trading.
Separately, a challenger in the fast-growing obesity treatment market, Amgen (NASDAQ: ), said its experimental drug MariTide led to up to 20% weight loss in a mid-stage trial with overweight or obese participants.
Amgen shares were down nearly 8% before the US market opened, however, as the data fell short of investor expectations.
