Eli Lilly's CEO Says This Could Be a Game Changer for Its Business

Eli Lilly (NYSE: LLY) is a leading healthcare company that has been generating some incredible results in recent years. It has some excellent GLP-1 drugs in its portfolio -- Zepbound and Mounjaro -- which are in high demand from patients looking to lose weight and become healthier.

The knock on the stock these days, however, is that it may have gotten too expensive, and that demand may also slow down in the future. As a result, shares of Eli Lilly haven't been all that hot of late. Instead, they've been in a bit of a tailspin.

But investors shouldn't count out the healthcare stock, as its CEO believes there could be a catalyst in the near future.

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Medicare coverage for GLP-1 could be huge for Eli Lilly

Eli Lilly's business has been impressive. The company has been generating fantastic growth, and it's still in the early innings of what's proving to be a huge market opportunity for anti-obesity drugs. Zepbound and Mounjaro are two excellent GLP-1 products that are helping patients lose weight, but there may be a catalyst that leads to an acceleration of demand, and that's Medicare coverage.

CEO Dave Ricks expects Medicare to cover obesity drugs in the near future, and when that happens, "that will change the game a bit." Many people are paying cash for these drugs in an effort to save money, but with economic conditions being far from ideal, having Medicare help pick up the tab could lead to even better growth numbers for the business. And with patients shedding pounds, they can become much healthier in the process, potentially requiring less medical care in the future, thus, it can benefit the industry as a whole. Effectively, it becomes a win-win for both sides.

The stock is down this year, but it could be a good time to buy

Heading into this week, shares of Eli Lilly are down more than 18% since the start of 2026. That's a far worse performance than the S&P 500, which has declined by 7%. Investors have been growing concerned about how much demand there will be for GLP-1 drugs and if the market may have become overly optimistic about it.

However, GLP-1 drugs offer many potential benefits beyond weight loss (e.g., treating sleep apnea and reducing cardiovascular risk), and they can have a significant impact on patients' overall health and well-being. If anything, there may be even more upside than what the market is currently pricing in.

While Eli Lilly's stock is priced at a premium (trading at 38 times trailing earnings), it may still be an excellent long-term buy, as it has plenty of growth opportunities ahead.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.