Shares of Novo Nordisk (NVO) and Eli Lilly (LLY) climbed on Tuesday after President Joe Biden proposed expanding Medicare and Medicaid coverage for anti-obesity drugs, a move that could significantly reduce out-of-pocket costs for millions of Americans. Novo's shares rose as much as 4.9% before paring gains, while Lilly's stock increased by over 3%. The White House highlighted the potential to lower expenses for these medications by up to 95%, with the policy potentially taking effect in 2026.

Novo Nordisk welcomed the proposal, citing the growing evidence of their drug Wegovy's cardiovascular benefits beyond weight loss. Meanwhile, rival Amgen (AMGN) reported disappointing mid-stage trial results for its experimental weight-loss drug MariTide, causing its shares to drop nearly 8%. Analysts noted that Amgen's underwhelming performance likely bolstered Novo and Lilly stocks by reducing concerns over heightened competition in the obesity drug market.

Market Overview:

• Shares of Novo Nordisk and Eli Lilly rise on Biden's proposed anti-obesity drug coverage.
• Amgen's weight-loss drug trial results miss market expectations, dragging its shares down 8%.
• Biden's plan could cut out-of-pocket costs for millions of Americans by up to 95%.

• Medicare and Medicaid may soon cover obesity as a standalone condition, expanding drug accessibility.
• Novo Nordisk's Wegovy has demonstrated cardiovascular benefits, paving the way for policy changes.
• Amgen's disappointing trial results ease competitive pressures on Novo and Lilly.

• Biden's proposal could reshape the obesity drug market, driving further adoption of Novo and Lilly treatments.
• Investors remain cautious about potential policy shifts under the next administration.
• Amgen faces pressure to improve results in a highly competitive weight-loss drug sector.

Biden's proposal to expand coverage for anti-obesity medications marks a significant milestone in public health policy, with major implications for the drug market. Novo Nordisk and Eli Lilly stand to gain as their treatments for obesity and related conditions become more accessible. Meanwhile, Amgen's subpar trial results may allow these industry leaders to maintain their market dominance.

The potential policy shift underscores the importance of evidence demonstrating broader health benefits beyond weight loss. As the market for obesity treatments expands, the competitive landscape will likely depend on innovation and efficacy, with federal policy playing a pivotal role in shaping outcomes.