S1973

The Treat and Reduce Obesity Act of 2025 (S.1973) was introduced in the Senate on June 5, 2025, and subsequently referred to the Committee on Finance. This bill seeks to amend title XVIII of the Social Security Act to expand Medicare coverage for intensive behavioral therapy for obesity and to include drugs used for the treatment of obesity or for weight loss management under Medicare's prescription drug benefit. A companion bill, HR4231, has also been introduced in the House, indicating a coordinated legislative effort. This bill does not specify an explicit funding amount but rather expands the scope of services covered by Medicare. The money trail would involve increased reimbursements from Medicare to healthcare providers and pharmaceutical companies for obesity treatments. This represents a significant expansion of the total addressable market for these treatments, as Medicare beneficiaries constitute a large and growing demographic with a high prevalence of obesity. The bill authorizes the Secretary to expand qualified healthcare providers for intensive behavioral therapy and explicitly allows coverage for obesity drugs, which are currently not covered by Medicare's prescription drug benefit. Structural winners include pharmaceutical companies developing and manufacturing GLP-1 agonists and other obesity drugs, such as Eli Lilly and Company ($LLY), Novo Nordisk A/S ($NVO), Pfizer Inc. ($PFE), Amgen Inc. ($AMGN), and Johnson & Johnson ($JNJ). Medical device manufacturers involved in obesity management, like Abbott Laboratories ($ABT) and Medtronic plc ($MDT), could also see increased demand. DexCom, Inc. ($DXCM), which produces continuous glucose monitoring systems, may also see indirect benefits if obesity management leads to increased monitoring for related conditions like diabetes. As of 2026-04-07, Eli Lilly and Company ($LLY) is trading at $907.72, down 1.31% over the last 7 days and 8.34% over the last 30 days. Novo Nordisk A/S ($NVO) is at $36.2, down 1.5% over 7 days and 6.17% over 30 days. Pfizer Inc. ($PFE) is at $27, down 3.85% over 7 days and 0.18% over 30 days. Amgen Inc. ($AMGN) is at $337.39, down 4.11% over 7 days and 8.7% over 30 days. Johnson & Johnson ($JNJ) is at $238.67, down 2.36% over 7 days and 0.72% over 30 days. Abbott Laboratories ($ABT) is at $102.03, down 0.62% over 7 days and 6.87% over 30 days. Medtronic plc ($MDT) is at $86, down 0.75% over 7 days and 5.39% over 30 days. DexCom, Inc. ($DXCM) is at $63.29, up 0.76% over 7 days but down 7.08% over 30 days. The bill is in early stages, having been referred to the Senate Committee on Finance, and its passage would require committee approval, a Senate vote, House passage, and presidential assent.