California Aims to Curb Medicaid Coverage for Weight-Loss Drugs

California lawmakers are moving to cut Medicaid coverage for some expensive weight-loss drugs, such as Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound, in a bid to reduce the state’s $12 billion budget deficit.

Lawmakers eliminated Medicaid coverage for such drugs when prescribed for weight loss—though they would still be covered when used for diabetes treatment—in a budget passed earlier this month. The move is expected to save the state $85 million in the fiscal year that starts July 1, a savings that is estimated to grow to $680 million annually by mid-2029.

The California Medicaid program, which serves 15 million ...