Medicare GLP-1 Bridge may unlock obesity drug volumes, with Zepbound expected to lead in share

Overview

This report focuses on the temporary GLP-1 Bridge program launched by the U.S. CMS on July 1, 2026. The program will run through December 2027, allowing Medicare beneficiaries to obtain coverage for GLP-1 drugs for obesity use at a monthly out-of-pocket cost of $50. Covered products include Novo's Wegovy injectable and oral formulations, as well as LLY's Zepbound Kwikpen and Foundayo oral drug. Goldman Sachs believes the policy removes the statutory barrier that previously prevented Medicare from covering drugs used solely for weight loss, representing an important volume-unlocking event for the anti-obesity drug market.

Core views

The core view is that unlocking Medicare coverage will increase penetration of GLP-1 obesity treatments and provide a positive volume read-through for LLY and Novo. The survey shows high patient interest, with physicians expecting adoption to increase from approximately 31% shortly after launch to approximately 45% one year later; based on approximately 15 million eligible patients, approximately 7 million could be treated after one year. In terms of share, Zepbound Kwikpen is expected to remain the leader, while injectables should continue to account for the majority due to their greater efficacy and perceived value.

Analysis framework

The report cross-validates a KOL physician survey with Goldman Sachs' AOM market model. The sample includes 25 physicians: 13 endocrinologists and 12 primary care/internal medicine/family medicine physicians, all with experience treating Medicare obesity patients and prescribing GLP-1 drugs. Goldman Sachs combines survey-derived adoption rates, patient interest, product shares, prescription drivers, and execution bottlenecks with its 2026-2027 Medicare channel revenue forecasts and prescription-trend monitoring framework.

Methodology notes

• surveyKOL physician survey

  Physician expectation survey

  Goldman Sachs surveyed 25 physicians with experience treating Medicare obesity patients and prescribing GLP-1 drugs to anticipate the GLP-1 Bridge program's early adoption rate, drug shares, and execution bottlenecks.

• market_modelGlobal Anti-Obesity Medication market model

  Anti-obesity drug market model

  The report compares the survey results with Goldman Sachs' AOM market model, which forecasts Medicare channel revenue of approximately $2.6 billion in 2026 and approximately $8 billion in 2027.

• Valuation methodsP/E and DCF

  Valuation methodology

  Eli Lilly's price target is based on 28.0x P/E multiplied by Q5-Q8 EPS estimates; Novo Nordisk's price target is based on a 50%/50% blend of DCF and P/E methodologies.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Eli Lilly & Co. (LLY)

  One of the core beneficiaries of the GLP-1 Bridge program, with Zepbound Kwikpen and Foundayo included among covered drugs.

  Strengths

  Zepbound Kwikpen has the highest expected share among surveyed physicians; Buy rating and a 12-month price target of $1,283.

  Weaknesses

  Obesity drug price declines, intensifying competition, or weaker-than-expected pipeline data could pressure valuation and medium- to long-term earnings expectations.

  Comparison

  Versus Novo, LLY's Zepbound Kwikpen is expected to have a 44% share in the Bridge program, higher than the shares of Wegovy pen and Wegovy pill.

  Risks

  Annual price declines exceeding expectations, lower-than-expected market share, execution shortfalls, and weaker-than-expected pipeline-asset data.

• Novo Nordisk (NOVOb.CO; NVO)

  One of the core beneficiaries of the GLP-1 Bridge program, with Wegovy pen and oral drug included among covered products.

  Strengths

  Wegovy is available in both injectable and oral formulations, and physicians did not view the oral drug's food-effect/fasting requirements as a prescription barrier.

  Weaknesses

  Neutral rating, with limited implied upside to the disclosed price target; manufacturing expansion and pricing pressure remain constraints.

  Comparison

  Wegovy pen is expected to have a 27% share and Wegovy pill a 16% share, together below Zepbound Kwikpen's 44% share as a single product.

  Risks

  A slower-than-expected Wegovy pill ramp, CagriSema or amycretin development failure, slower-than-expected expansion of Wegovy/Ozempic production capacity, stronger data from competing obesity drugs, and continued pricing pressure.

• Anti-obesity drug/GLP-1 market

  Industry-wide demand release resulting from expanded Medicare coverage.

  Strengths

  The historical statutory coverage barrier has been removed by the temporary program, while patient interest and physician adoption expectations are both high.

  Weaknesses

  The survey sample may be skewed toward early adopters and active GLP-1 prescribers, potentially overstating adoption among the broader Medicare population.

  Comparison

  Physicians expect approximately a 70/30 split in favor of injectables, while Goldman Sachs' model also expects injectables to account for approximately 85% of Medicare channel revenue in 2026.

  Risks

  Prior authorization, utilization management, patient screening, channel price declines, and slower-than-expected conversion to actual prescriptions.

Key data

• Bridge program timeline2026-07-01 to 2027-12CMS launched the temporary GLP-1 Bridge program.
• Patient out-of-pocket cost$50/monthEligible Medicare beneficiaries receive coverage through the program.
• Physician sample2513 endocrinologists and 12 primary care/internal medicine/family medicine physicians.
• Expected program adoption rateapproximately 31% shortly after launch, approximately 45% after approximately one yearBased on the surveyed physicians' average expectations.
• Eligible-patient population assumptionapproximately 15 millionA 45% adoption rate corresponds to approximately 7 million patients receiving treatment.
• Patient interest38%Surveyed physicians said that 38% of eligible patients had already expressed interest in GLP-1 treatment for obesity.
• Expected Bridge program sharesZepbound Kwikpen 44%; Wegovy pen 27%; Wegovy pill 16%; Foundayo 13%Zepbound Kwikpen is expected to have the highest share.
• Medicare channel revenue forecastapproximately $2.6bn in 2026, approximately $8bn in 2027Forecast from Goldman Sachs' AOM market model.
• Illustrative incremental revenueover $2bn in 2H26, over $6bn in 2027Based on 15 million Bridge patients and weighted DTC monthly pricing assumptions.
• Key prescription driversmaximum weight loss efficacy, followed by tolerabilityOral versus injectable preference was not among the most frequently cited primary factors.
• Key execution bottleneckprior authorizationPhysicians viewed prior authorization as the most important logistical and process bottleneck.

Impact & implications

From an investment perspective, the survey results are positive for both LLY and Novo, but the structural benefit is skewed toward LLY due to Zepbound's leading share. The positive read-through for Novo is that physicians did not view the food-effect/fasting requirements associated with Wegovy pills as a significant obstacle. However, Medicare pricing is below that of some self-pay channels, so near-term revenue could be offset by pricing headwinds. Investors should monitor DTC and government-channel prescription volumes, prior-authorization approval efficiency, product-share migration, and the oral drug ramp.

Risks

• The survey sample may be biased, as surveyed physicians are more likely to be early adopters or active prescribers of GLP-1 drugs.
• The Medicare price of approximately $245/month may be below prices in self-pay or DTC channels, creating a near-term pricing headwind.
• Prior authorization and utilization management standards may slow program adoption.
• Price declines in the obesity drug market may be greater than expected.
• Stronger-than-expected data from competing drugs or oral small-molecule GLP-1-related assets could affect market share.
• Pipeline and manufacturing expansion execution risks remain for Novo's CagriSema, amycretin, and other assets.

What to watch

• Whether Zepbound Kwikpen prescriptions increase meaningfully in DTC and government channels.
• Whether actual adoption shortly after launch and after one year of the Medicare Bridge program approaches physicians' expectations of 31% and 45%.
• Whether prior-authorization approval efficiency, denial rates, and patient-screening processes become actual bottlenecks.
• Whether the injectable-to-oral share structure remains approximately 70/30.
• Changes in the relative shares of Wegovy pill and Foundayo among endocrinologists and in PCP channels.
• Whether the revenue offset from lower Medicare pricing is less than the incremental volume benefit.