CVS Health Opts Out of Medicare Obesity Drug Coverage, Eli Lilly and Novo Nordisk Shares Drop
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 21 2026
0mins
Shares of Eli Lillyand Novo Nordiskare under pressure on Tuesday after CVS Healthannounced the company's decision regarding Medicare obesity drug coverage. According to a company spokesperson quoted by Bloomberg News, "CVS Health opted out of the Medicare obesity drug coverage model."OPTING OUT:CVS Health said it is steering clear of Medicare's obesity drug coverage model. The company told Bloomberg News that it had "opted out," a stance that pushed the two biggest players in the space – Eli Lilly and Novo Nordisk – into negative territory in morning trading.CHALLENGES:Asked on UnitedHealth'searnings call about the company's plans to participate in the BALANCE Model for GLP-1s and its anticipation of whether the industry thresholds for participation will be met, Bobby Hunter, UnitedHealth's chief of government programs, stated in part, "As it relates to your question about the BALANCE Model, we've been in good active dialogue with both CMS and CMMI on that front. We'd like to find a path to yes there on coverage over time, but there are some notable challenges and outstanding questions with the currently planned structure. We're still working through that process internally, and we look forward to continuing the dialogue with CMS. We've provided some specific recommendations that we believe would serve all stakeholders really well."Medicare insurers had until April 20 to tell the government whether they would participate in the plan to add coverage for weight-loss drugs from Eli Lilly and Novo Nordisk in 2027 and if the Centers for Medicare and Medicaid Services doesn't get most insurers to sign up, the program can't go forward, the agency has said.PRICE ACTION:Shares of Eli Lilly and Novo Nordisk are trading lower on Tuesday by 3% and 4%, respectively.
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Wall Street analysts forecast LLY stock price to rise
20 Analyst Rating
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Current: 1112.000
Low
950.00
Averages
1192
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1500
About LLY
Eli Lilly and Company is a medicine company, which discovers, develops, manufactures, and market products in a single business segment called human pharmaceutical products. The Company manufacture and distribute its products through facilities in the United States, including Puerto Rico, and in Europe and Asia. The Company’s products are sold in approximately 90 countries. Its Cardiometabolic Health products Basaglar; Humalog, Humalog Mix 75/25, Humalog U-100, Humalog U-200, Humalog Mix 50/50, insulin lispro, and others; Humulin, Humulin 70/30, and others; Jardiance; Mounjaro; Trulicity; Zepbound, and others. Its oncology products include Cyramza, Erbitux, Tyvyt, Verzenio, Retevmo, Jaypirca, and others. Its immunology products include Ebglyss, Olumiant, Omvoh, and Taltz. Its neuroscience products include Emgality and Kisunla. Its LillyDirect, a direct-to-patient digital health care platform, provides delivery of select Lilly medicines dispensed by third-party pharmacies to patients.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Financial Performance: In Q1 2026, Eli Lilly reported a 56% revenue increase to $19.8 billion and a 168% surge in net income to $7.4 billion, indicating improved operational efficiency and promising future growth potential despite its large scale.
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See More
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- AI Innovation at Eli Lilly: Eli Lilly collaborates with OpenAI for drug discovery and establishes an AI co-innovation lab with Nvidia to accelerate the identification of promising drug molecules, resulting in a 56% revenue increase to $19.8 billion and a 168% rise in net income to $7.4 billion in Q1 2026, indicating significant efficiency improvements.
- New Drug Potential: Lilly's newly approved weight-loss pill, Foundayo, which can be taken at any time, replaces injections and is expected to attract a broader patient base, further expanding market share and enhancing the company's position in the rapidly growing weight-loss drug market.
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See More
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- Stock Volatility: The company's stock plummeted 23% earlier this month and dropped 36% in March due to lower-than-expected efficacy of another drug, petrelintide, marking the two worst performances since its IPO in 2010, with a year-to-date decline of 38%.
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See More
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- Optimistic Outlook for New Drug: Despite disappointing tolerability data for survodutide, analysts remain positive about the amylin-based drug petrelintide, believing it has the potential for modest weight loss and excellent tolerability, positioning it as a future growth driver.
- Intensifying Market Competition: At the American Diabetes Association meeting, the demand for amylin drugs was widely recognized, and Zealand's petrelintide faces competition from major players like Eli Lilly, necessitating a clear differentiation to attract patients in a crowded market.
- Crucial Future Trials: Petrelintide is set to initiate late-stage trials in the second half of the year, and analysts believe its success will directly influence Zealand's market position, particularly in the treatment of obesity and fatty liver disease.
See More
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- Acquisition of Snowflake: The firm also purchased around 149,700 shares of Snowflake for approximately $34.8 million, indicating a bullish outlook on cloud computing and data analytics, aiming to capitalize on future growth opportunities.
- Reduced Roku Exposure: ARK Invest sold about 561,800 shares of Roku valued at approximately $77.6 million, reducing its investment in the streaming platform, which reflects a reassessment of technology stocks and portfolio adjustments.
- Healthcare Investment: Additionally, ARK increased its stake in Eli Lilly by nearly 2,400 shares worth about $2.7 million, demonstrating a focus on the healthcare sector to diversify its portfolio amid market uncertainties.
See More
Eli Lilly and Twist Leverage AI to Accelerate Drug Development
- AI Innovation at Eli Lilly: Eli Lilly is collaborating with OpenAI to accelerate drug discovery and has established an AI co-innovation lab with Nvidia, aiming to identify promising molecules faster than traditional methods, which is expected to enhance its competitive edge in drug development.
- Strong Financial Performance: In Q1 2026, Eli Lilly reported a 56% revenue increase to $19.8 billion and a 168% surge in net income to $7.4 billion, demonstrating the company's ability to achieve high growth efficiency despite its large scale, further solidifying its market position.
- Growth Potential for Twist: Twist Bioscience's revenue rose 19% to $110.7 million in Q2 of fiscal 2026, marking 13 consecutive quarters of growth; however, its net loss widened to $44 million, yet the partnership with Amazon provides significant momentum for future drug development.
- Market Outlook Analysis: Both companies showcase distinct approaches in AI-driven drug development, with Eli Lilly focusing on innovation in established drugs while Twist seeks higher-risk returns in synthetic DNA, reflecting the broad potential of AI in the pharmaceutical industry.
See More
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- AI Innovation at Eli Lilly: Eli Lilly collaborates with OpenAI for drug discovery and establishes an AI co-innovation lab with Nvidia, aiming to accelerate drug development and enhance its position in the competitive pharmaceutical market.
- Strong Financial Performance: In Q1 2026, Eli Lilly reported a 56% revenue increase to $19.8 billion and a 168% surge in net income to $7.4 billion, indicating improved operational efficiency and promising future growth potential despite its large scale.
- Market Dynamics for Twist Bioscience: Twist Bioscience's revenue rose 19% to $110.7 million in Q2 2026, marking 13 consecutive quarters of growth, although net losses widened to $44 million, highlighting challenges faced during expansion.
- Partnership with Amazon: Twist Bioscience has become a key lab in Amazon's Bio Discovery platform, leveraging AI to design drugs and collaborate with real-world partners, which is expected to create new business growth opportunities and enhance its market competitiveness.
See More
Eli Lilly and Twist Bioscience's AI Drug Development Strategies
- AI Innovation at Eli Lilly: Eli Lilly collaborates with OpenAI for drug discovery and establishes an AI co-innovation lab with Nvidia to accelerate the identification of promising drug molecules, resulting in a 56% revenue increase to $19.8 billion and a 168% rise in net income to $7.4 billion in Q1 2026, indicating significant efficiency improvements.
- New Drug Potential: Lilly's newly approved weight-loss pill, Foundayo, which can be taken at any time, replaces injections and is expected to attract a broader patient base, further expanding market share and enhancing the company's position in the rapidly growing weight-loss drug market.
- Twist's Growth Risks: Twist Bioscience's stock has risen over 136% in the past year, despite a 26% decline over the past five years, with Q2 2026 revenue up 19% to $110.7 million, marking 13 consecutive quarters of revenue growth, although net loss widened to $44 million primarily due to a $7.2 million settlement.
- Partnership with Amazon: Twist's collaboration with Amazon positions it as a key lab in the Amazon Bio Discovery platform, leveraging AI to design drugs and develop them with real-world partners, highlighting the company's critical role in AI-driven drug development despite facing higher uncertainty.
See More
Zealand Pharma Shares Plunge 23% Amid Survodutide Concerns
- Drug Efficacy Concerns: Zealand Pharma's weight loss drug, survodutide, has shown a 19% patient dropout rate due to side effects in clinical trials, prompting analysts to slash peak sales forecasts by nearly 80%, posing a significant challenge to the company's obesity treatment strategy.
- Stock Volatility: The company's stock plummeted 23% earlier this month and dropped 36% in March due to lower-than-expected efficacy of another drug, petrelintide, marking the two worst performances since its IPO in 2010, with a year-to-date decline of 38%.
- Shift in Market Focus: Despite the bleak outlook for survodutide, investors are shifting their attention to petrelintide, with analysts believing it still holds potential in the weight loss market, especially with upcoming late-stage trials.
- Increased Competitive Pressure: At the American Diabetes Association meeting, amylin drugs like petrelintide were highlighted as key future players, and despite competition from major firms like Eli Lilly, Zealand Pharma still has opportunities to carve out a niche in the obesity market.
See More
Zealand Pharma Faces Setbacks, Analysts Reassess Obesity Drug Strategy
- Drug Efficacy Issues: Zealand Pharma's obesity drug survodutide faced significant setbacks with a 19% patient dropout rate, prompting analysts to slash peak sales forecasts by nearly 80%, which will severely impact the company's market performance and investor confidence.
- Optimistic Outlook for New Drug: Despite disappointing tolerability data for survodutide, analysts remain positive about the amylin-based drug petrelintide, believing it has the potential for modest weight loss and excellent tolerability, positioning it as a future growth driver.
- Intensifying Market Competition: At the American Diabetes Association meeting, the demand for amylin drugs was widely recognized, and Zealand's petrelintide faces competition from major players like Eli Lilly, necessitating a clear differentiation to attract patients in a crowded market.
- Crucial Future Trials: Petrelintide is set to initiate late-stage trials in the second half of the year, and analysts believe its success will directly influence Zealand's market position, particularly in the treatment of obesity and fatty liver disease.
See More
