05:33 AM EDT, 08/04/2025 (MT Newswires) -- (Updates to include Lilly's comment in the fifth paragraph.)

Eli Lilly ( LLY ) closed up 3% Friday after media reports said US health officials are proposing a pilot program allowing Medicaid and some Medicare drug plans to cover costly weight loss medications.

The initiative would cover GLP-1 medicines for obesity, a category that includes Lilly's Zepbound, the reports said.

The pilot program for Medicaid may begin in April, with Medicare following in January 2027, the Washington Post reported, citing documents from the Centers for Medicare and Medicaid Services.

The proposal remains under review, the report said.

"Gaps in insurance coverage disrupt effective care and limit access to safe, evidence-based obesity management medications," a Lilly spokesperson said. "We are committed to working with payers and policymakers to expand coverage and improve care."