Finimize - 💉 A slimming proposal

What’s going on here?

Millions of Americans could become eligible to receive pricey obesity drugs – paid for by Medicare and Medicaid – under a new rule proposed by the current White House.

What does this mean?

Drugs like Novo Nordisk’s Ozempic and Eli Lilly’s Mounjaro aren’t cheap: the weekly GLP-1 injections sell for a hefty $1,000 a month. Already, the Medicare insurance program covers those costs for older folks with conditions like diabetes. But the new rule would allow coverage for patients to use it for its proven weight-loss benefits. That would have pharmacies doling out millions more doses of the stuff: between Medicare and the Medicaid program, which covers poorer Americans, there could be as few as seven million new people eligible for the drugs – or as many as 28 million.

Why should I care?

Zooming in: Digging deeper into the pockets.

Congress's budget experts are estimating that – if approved – the meds could cost America $35 billion over the next nine years. But that may be money well spent: the government already shells out billions treating chronic illnesses that are caused by obesity. No wonder, then, that the idea has been met with bipartisan and voter support.

The bigger picture: An ever-expanding market.

Sales of GLP-1 drugs are expected to reach $130 billion by 2030 – almost triple what they are now. And while Denmark’s Novo Nordisk and the US’s Eli Lilly are out in front, a bunch of other pharmaceutical companies are looking to break in. What’s more, some compound pharmacies (which manufacture their own drugs) are producing unapproved GLP-1s, motivated by the shortage in supply and the high prices of the originals. And they’re making inroads into the market.

What’s going on here?

The president-elect said on social media that the US would impose tariffs on goods coming from Canada, Mexico, and China, in a move that could damage the economies of its three biggest trading partners – as well as its own.

What does this mean?

Tariffs – essentially taxes on imports that are paid on the receiving end of the deal – can be used to protect local industries from overseas competition and, at times, have been deployed as a foreign policy bargaining tool. And they were a top talking point in the incoming president’s pitch to voters. Now, he's pledging to tack 25% tariffs onto all goods from Canada and Mexico, and an additional 10% levy on stuff from China until migrants and drugs stop crossing over the US border.

Why should I care?

Zooming in: The US isn’t an island.

The US relies heavily on its neighbors for trade: it imports steel and other goods from the two countries – including almost all of Canada’s oil. What’s more, America’s automakers have expanded their manufacturing footprint across the three countries, thanks to free-trade agreements that have been in place for three decades. An estimated 16% of vehicles sold in the US this year – roughly 2.5 million cars, trucks, and SUVs – were built in Mexico, where labor costs are cheaper. That includes US autos, but also ones from foreign brands. Little surprise then that shares of European car makers sold off on Tuesday alongside their American cousins. And the new tariff threat, while not yet a reality, could shake up Chinese automakers too: they’d been planning to build factories in Mexico to bypass US import taxes.

The bigger picture: Two schools of thought.

Investors are worried tariffs will lead to higher prices, which could diminish consumer activity and endanger corporate profits. But the new Treasury secretary has another theory – that if folks spend more on imports, they’ll spend less on other goods (thanks to having less spare cash), so inflation won’t be a worry. Thing is though, that could be a risk to economic growth – at least in the short term.