Eli Lilly's obesity drug Zepbound (tirzepatide) can now be covered by Medicare insurance plans for use in sleep apnea, broadening access to the weight-loss treatment.

The statement from the Centers for Medicare & Medicaid Services comes after tirzepatide in December became the first drug approved in the U.S. for sleep apnea, strengthening its case for coverage as Medicare cannot cover obesity drugs unless they are approved for a secondary use by the FDA.

Commercial insurers and employers were previously hesitant to cover the drug due to its high cost of over $1,000 a month.

Insurers can still choose not to cover tirzepatide, despite the CMS's guidance.

Last year, rival Novo Nordisk's obesity drug also gained Medicare coverage to reduce the risk of heart attacks and strokes.

Lilly and Novo are testing their blockbuster obesity drugs for a range of conditions as they race to demonstrate that the treatments have other health benefits.

The Biden administration proposed to expand the coverage of drugs to treat obesity in November last year. If President-elect Donald Trump's incoming administration backs the move, it would be effective from 2026.