For many years, a major barrier to popular weight-loss medications has been straightforward: although millions of Americans may want them, many cannot afford them.
Eli Lilly (LLY)is beginning to demonstrate what occurs when that barrier is removed.
More than 500,000 people have joined a Medicare pilot offering eligible older adults and people with disabilities access to obesity drugs for $50 a month, according to Reuters .
For Lilly, this increased access contributed to yet another huge quarter.
The pharmaceutical business increased its sales prediction for 2026 to between $91 billion and $92 billion after reporting $24.4 billion in third-quarter revenue, up 39% from the same period last year.
Lilly's market worth might increase by over $80 billion after shares surged 7.5% on Thursday and hit a record.
The fact that Zepbound and Mounjaro are selling well isn't the only intriguing aspect for investors.
In fact, Lilly's realized prices decreased throughout the quarter.
The business gained a lot more clients to make up for it.
This might indicate the next stage of the weight-loss medication boom: reduced costs could not be detrimental to Lilly if they significantly expand the market.
Eli Lilly is trading price for millions of potential patients
Lilly's third-quarter results demonstrate the strength of that trade-off.
Worldwide revenue increased 39% to $24.4 billion.
Sales volume rose 53%, while realized prices declined 15%, according to Eli Lilly's earnings release.
This indicates that even though Lilly made less money per unit on average, it sold a lot more medications.
In the U.S., revenue increased 34% to $15.1 billion. Volume rose 41%, while realized prices declined 7%.
Sales of Lilly's obesity medication Zepbound reached $5.35 billion in the third quarter, a 49% increase over the same period last year.
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Approved for Type 2 diabetes, Mounjaro brought in $10.72 billion, a 65% increase.
Those are huge figures already.
However, because insurance coverage and cost have generally limited obesity therapy, the potential market remains considerably larger.
That may decide if a prescription becomes a real therapy for a typical patient.
A doctor may suggest a medication for weight reduction, but it won't help if the patient has to pay hundreds of dollars each month.
That computation is altered when insurance coverage is increased.
Reuters reported that Lilly's Medicare pilot offers eligible older Americans and people with disabilities obesity medication for $50 per month. More than 500,000 customers have already enrolled in the program.
Therefore, Lilly may be able to reach clients who previously could not afford its products by agreeing to a cheaper price.
One patient paying less may negatively impact pricing.
On an income statement, hundreds of thousands of additional patients may seem quite different.
Lower prices are becoming part of Lilly's growth story
The traditional pharmaceutical model often rewards companies for maintaining high prices on successful drugs.
Weight-loss medications might be evolving differently.
Because there are so many prospective patients, Lilly could increase overall sales even if it sacrifices some income per prescription.
Its most recent quarter illustrates this dynamic.
According to Lilly, the 15% drop in realized price was more than compensated by the 53% rise in global sales volume.
The disparity was considerably more noticeable outside of the United States.
Revenue increased 47% to $9.3 billion as volume jumped 76%, despite realized prices falling 29%, according to Lilly .
Mounjaro's foreign sales reached $5.7 billion, a 93% increase.
The addition of Mounjaro to China's National Reimbursement Drug List, which helps increase access but typically requires drugmakers to accept lower prices, contributed to part of the price decrease.
The pattern is important because it illustrates the potential evolution of Lilly's opportunity.
It is not necessary for the business to charge the maximum amount to every patient.
To get access, begin therapy, and continue taking its medications, it needs a sufficient number of patients.
For someone who is having trouble paying for therapy, it is a much more relevant scenario.
Additionally, it could be a more effective business strategy for Lilly.
More money may be made from a less expensive medication that serves a much wider population than from a more expensive medication that is only accessible to a small number of patients.
Eli Lilly's weight-loss boom is getting even bigger
Wall Street's response indicates that investors are beginning to think the technique is effective.
Lilly shares rose 7.5% Thursday to $1,389 after touching a record $1,408.34.
The rally potentially added about $80 billion to a company already worth roughly $1.2 trillion.
For a firm the size of Lilly, such a stock rise is impressive.
Examining management's expectations makes the explanation more apparent.
From its initial range of $85 billion to $87 billion, Lilly increased its full-year sales expectation to between $91 billion and $92 billion.
That is a $5.5 billion increase in projected yearly income over the company's initial projection at the halfway mark.
Additionally, Zepbound is not the only component of the company's obesity business.
According to Reuters , Lilly has introduced Foundayo, its oral obesity therapy, and is still working on retatrutide, a next-generation injectable medication that, in midstage testing, resulted in an average weight reduction of around 24%.
This allows Lilly to reach individuals who may not want, be able to pay, or be eligible for the same therapy in a variety of ways.
Patients who are hesitant to utilize injections may find pills appealing.
Increased insurance coverage may attract individuals who were previously unable to pay for medical care.
Having enough medication readily available for everyone who needs it is another issue that has continually hampered the business and may be addressed by increasing production capacity.
To make it happen, Lilly is making significant investments.
The business is still growing its manufacturing operations in the United States, including initiatives in Virginia and Texas.
In the end, such factories are important to patients because the weight-loss boom won't be fully widespread until pharmaceutical companies can produce enough dosages at costs that consumers or their insurance companies can afford.
Lilly's biggest opportunity may be making weight loss less exclusive
There is still a major risk in Lilly's strategy. Lower prices only work if additional volume is large enough to compensate. The latest quarter shows that happening. It doesn't guarantee it will continue forever.
Additionally, competition is becoming fiercer. While several pharmaceutical firms are developing injectable and oral obesity therapies, Novo Nordisk continues to be a significant competitor.
Governments and insurers may have more power to drive down pricing when additional medications hit the market.
That may be excellent news for patients.
It increases the significance of scale for Lilly.
The business must continue to draw in new clients more quickly than falling costs reduce earnings.
So far, that equation is working. Third-quarter volume rose 53%. Revenue rose 39%. Zepbound sales rose 49%. Mounjaro sales rose 65%.
Additionally, Lilly increased its projected yearly income by billions of dollars while accepting lower actual pricing.
For this reason, the Medicare pilot's 500,000 new patients could end up being more significant than Thursday's record stock price.
For many years, the weight-loss drug boom was partially a tale of exclusivity and scarcity: although there were exceptional medications, many individuals who desired them were unable to afford them due to their high cost and lack of coverage.
The most recent data from Lilly suggests a different stage.
Each prescription may become less profitable if insurance, governments, and pharmaceutical companies are able to make obesity therapy accessible to a substantially wider audience.
However, the number of prescriptions might be far higher.
This implies that medications previously considered expensive specialist items may become more widely available to those struggling to pay for treatment.
It explains why declining prices do not always translate into declining earnings for Lilly investors.
Making weight-loss medications affordable for millions of Americans might be the largest potential.
Related: Goldman Sachs resets Eli Lilly 12-month stock price target before earnings
This story was originally published by TheStreet on Oct 31, 2026, where it first appeared in the Health section. Add TheStreet as a Preferred Source by clicking here.
