COPENHAGEN (Reuters) -Shares of Danish weight-loss drug maker Novo Nordisk (NYSE:NVO) rose 1.3% on Tuesday as U.S. President Joe Biden proposed expanding coverage of anti-obesity drugs for millions on 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 become effective in 2026.
The stock pared initial gains of as much as 4.9% to trade 1.3% higher at 1236 GMT.
Current rules for the Medicare and Medicaid government health insurance programmes cover the use of drugs such as Mounjaro, Ozempic and Wegovy for certain conditions like diabetes, but not for obesity as a condition on its own.
The White House said in a statement the proposal could lower out-of-pocket costs for weight-loss drugs by up to 95%, expanding access to millions of Americans.
Nordnet analyst Per Hansen said Novo’s share move came on the back of the proposal, with U.S. peer Eli Lilly (NYSE:LLY) also rising in premarket trade.
Separately, a would-be challenger in the fast-growing obesity therapy market, Amgen (NASDAQ:AMGN), said its experimental drug MariTide led to an average weight loss of up to 20% in a mid-stage trial with overweight or obese participants.
Amgen’s shares were down nearly 8% ahead of the U.S. market open, however, as the data fell short of investor expectations.