Eli Lilly Lands Medicare/Medicaid Coverage Expansion, Eyes $150B GLP-1 Market
Baron Health Care Fund named Eli Lilly a top contributor in Q4 as shares rose on strong Zepbound obesity launch and a U.S. agreement expanding Medicare and Medicaid coverage while excluding Lilly from near-term pricing programs. The firm projects Lilly’s GLP-1/GIP therapies could tap a $150 billion market and double revenues by 2030.
1. Baron Fund Highlights Q4 Outperformance
In its Q4 investor letter, Baron Health Care Fund reported a 13.10% gain versus an 11.92% benchmark rise, citing strong stock selection in biotech and naming Eli Lilly as a leading contributor due to successful diabetes and obesity treatments.
2. Zepbound Launch and Policy Agreement
Lilly shares climbed as Zepbound’s obesity launch gained traction, and the company struck an agreement with the U.S. administration to expand Medicare and Medicaid coverage for its obesity drugs, secure lower Medicaid pricing and avoid near-term pricing programs and tariffs.
3. Long-term Market Outlook
Baron forecasts that Lilly’s GLP-1/GIP therapies, including Mounjaro, Zepbound and oral orforglipron, target a $150 billion-plus market and anticipates a doubling of total revenues by 2030 as adoption accelerates.