Jim Cramer is convinced health insurance companies will start paying for “revolutionary” weight loss drugs and thinks analysts who preach the opposite are “insane.”
On a recent episode of CNBC’s “Mad Money,” the TV host expressed his bullishness on GLP-1 drugs, used to treat diabetes and obesity, and the companies that make them, including Eli Lilly (NYQ:LLY) and Novo. repeated the posture. Nordisk (NYQ:NVO).
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“It’s cheaper for insurance companies to spend a lot of money on new weight-loss drugs than to just let their morbidly obese customers get heart disease,” he said.
And as the widespread uses of drugs such as Ozempic, Wegovy, Mounjaro and Zepbound are better understood, Cramer believes they will eventually be mass-produced and readily available in pill form. I am. health insurance plan.That, him said on the programpharmaceutical giants Eli Lilly and Novo Nordisk will experience huge valuation increases.
“When I hear analysts talking about insurance companies not paying for innovative weight loss drugs, it makes me want to scream,” Kramer added. This is why he is so bullish on this particular sector.
Novo Nordisk touts trial success
Kramer’s comments came shortly after Novo Nordisk’s disclosure. 5 year clinical trial resultsThey found that the company’s semaglutide drug, sold under the brand name Wegovy, reduced the risk of serious cardiovascular complications by 20% in patients with obesity and heart disease.
Additionally, although the study was not designed as a weight loss trial, participants who received semaglutide lost an average of 9.4% of their total body weight, which was maintained throughout the study.
Immediately after the results were released, several market analysts asserted that the findings would not change the game and would not persuade insurance companies to cover drugs intended for weight loss. One of the reasons is that the drug is very expensive. For example, Ozempic currently costs around $900 for one month, while Wegovy’s list price is $1,349 for one month.
“I think these analysts are insane,” an exasperated Kramer continued, pointing to patient groups that health insurance companies are “really keen to cover.”
For example, he said, people with type 2 diabetes are at risk for other health problems, so insurance companies should be “willing to pay for drugs that work.” [that] In the bud. ”
Cramer is not alone in seeing the potential of GLP-1 drugs. Emily Field, head of European pharmaceutical research at Barclays, said of how weight-loss drugs are likely to evolve over time: CNBC’s “Squawk Box”: “There will probably be different treatments available… [with] Maybe there’s an oral drug further down the pipeline…for people who fall right into the overweight category.
He believes “there are many other potential uses for these drugs,” and that “research is just beginning.”
“We think we’ll continue to see this push and pull between manufacturers and insurers. If insurers can show more data that shows they can save payers money, perhaps coverage will change. will gradually expand.” And it will expand. ”
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On Nov. 13, the first trading day after Novo Nordisk announced trial results at the American Heart Association (AHA) Annual Scientific Sessions in Philadelphia, the company’s stock rose 3% and Wegoby’s This highlights investors’ confidence in its heart benefits. NVO stock has risen 42.5% since the beginning of the year, according to market analysis site Tipranks.
Eli Lilly, a major rival in weight-loss treatments and Mr. Kramer’s favorite drug maker, also rose 1.17% on Nov. 13. LLY stock has increased 62.61% since the beginning of the year, according to Tipranks.
Kramer dismissed concerns from fellow market analysts about the drug’s effectiveness, saying: drugs. I say: let them run. They are too devastated. ”
He believes that once “miracle drugs” are mass-produced and available at affordable prices, the value of NVO and LLY will be “much higher than they are today.”
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