Biden's Proposal Boosts Novo Nordisk Shares Amid Obesity Drug Debate

Novo Nordisk's shares rose due to President Joe Biden's proposal to expand Medicare and Medicaid coverage for anti-obesity drugs. While current rules exclude obesity-specific drugs, this proposal could lower costs and increase access. Meanwhile, Amgen's experimental obesity drug showed promising results but disappointed investors.

In a significant move, President Joe Biden announced plans to expand Medicare and Medicaid coverage to include anti-obesity drugs, causing shares of Danish pharmaceutical giant Novo Nordisk to climb 1.3% on Tuesday. Initially surging nearly 4.9%, the stock settled by early afternoon.

Novo Nordisk described this proposal as a vital progression for patients, as current regulations cover weight-related drugs for diabetes but exclude obesity-specific treatments. The White House highlighted potential out-of-pocket savings of up to 95% for patients, potentially impacting millions.

Competitor Amgen reported that its obesity treatment, MariTide, resulted in a 20% weight loss during trials, yet its shares fell nearly 8% after failing to meet investor expectations, highlighting the competitive nature of this burgeoning market.

(With inputs from agencies.)