Key Takeaways
- Starting October 1, CVS Caremark will include Lilly’s Zepbound on its formulary, while the oral GLP-1 medication Foundayo receives coverage beginning June 1, overturning last year’s exclusionary policy.
- This policy shift means Lilly now has complete obesity drug coverage across America’s three dominant PBMs: Express Scripts, Optum Rx, and Caremark.
- Last year, CVS had chosen Novo Nordisk’s Wegovy as its exclusive preferred GLP-1, a decision that contributed to a nearly 12% drop in LLY shares.
- First-quarter 2026 results showed Lilly’s revenue surging 56% to $19.8 billion compared to the previous year, while adjusted earnings per share climbed 156% to $8.55.
- Following the CVS announcement, LLY shares advanced roughly 4%, positioning the stock within 5% of its record peak.
On May 28, Eli Lilly secured a significant victory when CVS Caremark announced it would reverse its prior exclusion of Zepbound from insurance coverage. The pharmacy benefit manager confirmed that Zepbound will join its formulary on October 1, while Lilly’s recently approved oral GLP-1 medication, Foundayo, will receive coverage starting June 1.
This represents a complete reversal from CVS’s stance just over twelve months ago. At that time, the company entered into an exclusive arrangement with Novo Nordisk, designating Wegovy as its sole preferred GLP-1 obesity treatment while removing Zepbound from coverage entirely. That move, coupled with underwhelming quarterly results from Lilly, triggered a stock decline of nearly 12%.
The new policy puts both manufacturers on equal ground. According to a CVS representative, employees whose insurance plans include obesity medication coverage will now access both Novo and Lilly GLP-1 treatments under identical copayment terms.
Shares of LLY climbed approximately 4% following the coverage announcement.
Complete Coverage Across Top Three PBMs
Caremark’s decision completes a clean sweep for Lilly across the nation’s three largest pharmacy benefit managers. Express Scripts (owned by Cigna), Optum Rx (part of UnitedHealth), and CVS Caremark now all provide coverage for Lilly’s entire approved obesity medication lineup.
This development carries substantial implications. PBM formulary decisions directly influence both patient accessibility and the amount individuals pay from their own pockets. Broader coverage across these powerful intermediaries typically drives higher prescription demand.
The announcement arrives at a particularly opportune moment for Foundayo. Lilly’s oral pill formulation only received FDA clearance in April, entering the market well after Novo’s oral alternative had already secured Caremark coverage months prior. Achieving parity eliminates a competitive disadvantage that had hindered Foundayo’s market penetration.
Notably, approximately 80% of patients receiving Foundayo prescriptions represent new GLP-1 users, indicating the oral format appeals to demographics who may have avoided injectable alternatives.
The expanded coverage also strengthens Lilly’s position against telehealth providers marketing lower-cost compounded versions of Zepbound. When insurance coverage reduces out-of-pocket expenses, the branded medication becomes considerably more price-competitive.
Stock Valuation and Analyst Perspectives
LLY shares currently command a forward price-to-earnings ratio of approximately 29x. While this exceeds the S&P 500’s roughly 21x multiple and the healthcare sector’s 17x average, it remains significantly below Lilly’s three-year historical forward P/E average of around 43x.
Before releasing first-quarter 2026 earnings, LLY had declined nearly 21% year-to-date. The strong quarterly performance—featuring 56% revenue growth to $19.8 billion and adjusted earnings per share jumping 156% to $8.55—sparked a substantial rebound. The stock now trades less than 5% beneath its all-time peak, though it continues lagging the S&P 500’s year-to-date advance exceeding 10%.
Analyst consensus establishes a price target around $1,227, suggesting potential upside of approximately 15% from present levels. Targets revised following the Q1 earnings release average slightly higher at $1,239.
Barclays maintains the street’s most optimistic projection at $1,400, while Rothschild & Co Redburn takes the most conservative stance at $900.
The forward P/E multiple has compressed from 32x when shares last traded near current prices in February, indicating that earnings projections have begun catching up to the stock’s valuation.
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