Two of the biggest insurance providers have expressed reluctance to participate in the government’s BALANCE program that would have made GLP-1 drugs more affordable to patients.
The Centers for Medicare and Medicaid Services has indefinitely postponed the pilot run of its new BALANCE financing model that would have improved patient access to weight-loss medicines. The delay, analysts say, could have a limited but nevertheless negative impact on the bottomlines of biopharma’s obesity frontrunners.
Eli Lilly ended Tuesday’s trading session nearly 2% lower than its previous closing price, while Novo Nordisk took a 4% hit.
The decision to postpone, which the agency announced in an email that has since been made public on LinkedIn, comes after CVS and UnitedHealth Group, two of the biggest insurance providers in the U.S., expressed reluctance to join BALANCE, according to reporting from Bloomberg News.
CVS has already declined to participate, according to the publication, while Bobby Hunter, chief of government programs at UnitedHealth, told investors during the company’s earnings call on Tuesday that “there are some notable challenges and outstanding questions with the currently planned structure.”
“We believe today’s announcement where CVS has declined to participate in CMS’ BALANCE program could have a limited, negative effect of up to ~$500M in peak incretin sales for Zepbound/Foundayo Medicare Part D sales,” Truist Securities told investors in an April 21 note. If all pharmacy benefit managers opt out of BALANCE, however, the revenue hit on Lilly could balloon to around $3.3 billion, the analysts said.
Still, this “potential future revenue impact would be offset if future Medicare Part D patients opted instead to purchase Zepbound/Foundayo through LillyDirect or comparable telehealth channels,” Truist added.
BMO Capital Markets likewise had a balanced view of the news. UnitedHealth’s comments on the call, according to the analysts, “are more reflective of a negotiating posture” rather than an outright refusal to participate. “Nothing in [UnitedHealth’s] response suggested a retreat from GLP-1 coverage,” the firm said.
“Against this backdrop, we think the move in Lilly and Novo shares could be overdone,” BMO added in its note.
BALANCE is the CMS’ proposed payment model for GLP-1 drugs, under which the agency would negotiate directly with manufacturers on behalf of state Medicaid offices and Part D plans. The goal is to make these drugs more affordable and accessible to patients. State agencies had until January 1, 2027, to signify their intent to participate in BALANCE, after which the program would kick in.
CMS had planned an interim measure called Bridge, running from July 1, 2026, through the end of the year that would provide eligible Part D beneficiaries access to certain GLP-1 drugs before BALANCE goes live. With the delay on Tuesday, Bridge has now been extended to December 31, 2027, according to the CMS’ email.
