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AMA Classifies Obesity as a "Disease;" Obesity Drugs Now Could be Covered

  +Follow June 20, 2013 2:51PM
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BurgerOn Wednesday, the American Medical Association (AMA) officially declared obesity to be a disease. The AMA currently defines obesity as having a Body Mass Index (BMI) of over 30. At previous points, the AMA had referred to obesity as a “major health concern,” a “complex disorder,” and an “urgent chronic condition.” But moving obesity classification of “disease” will have several implications. Notably, if obesity is no longer considered merely a lifestyle choice in need of tweaking, insurance companies could be required to cover the cost of weight loss drugs. According to Vivus, approximately 30 percent of insurers cover its obesity drugs. Some providers such as Aetna (AET) and Blue Shield do include coverage for weight loss drugs, but this new definition could cause that number to rise significantly.

This is news that could affect pharamceutical companies such as Arena and Vivus significantly.

Arena Pharmaceuticals, Inc. (ARNA)

This San Diego-based biopharmaceutical company could be a major beneficiary of the ADA’s declaration. On June 27,2012 the FDA approved the obesity-reduction drug lorcaserin, which will be marketed by Arena under the name Belviq. Belviq stimulates serotonin so patients feel satiated, and thus more full after meals.

Arena announced last week that after a few delays, they’d finally be rolling out Belviq. Since obesity is now considered a disease, Belviq could be covered under most insurance plans that currently force patients to pay out of pocket for obesity-reduction drugs. Belviq was specifically approved for patients with a BMI over 30, or people with a BMI over 27 who suffer from at least one obesity-related condition like high blood pressure, type-2 diabetes, or high cholesterol, which fits neatly into the AMA’s new parameters for defining obesity.

Arena suffered a setback earlier this year when they withdrew the European Union application for Belviq. Their stock opened the day at $7.60 a share on moderate trading, and is down nearly two percent on the day. Their next earnings report is August 7.

Vivus, Inc. (VVUS)

Mountain, California based Vivus beat Arena to the punch in the obesity pharmaceutical battle, rolling out their own drug Qsymia last September. And Qysmia, a combination of phentermine and topiramate, has been shown to produce weight loss more effectively than Belviq. Qysmia is currently also approved by the FDA for patients with a BMI over 30, or over 27 with blood pressure, type-2 diabetes, or high cholesterol.

Qysmia though, has faced sluggish sales despite outperforming Belviq on weight loss effectiveness. Analysts have speculated this might be due to Qysmia’s side effects, which include drowsiness, increased heart rate, and increased chance of birth defects for pregnant women. Belviq has a relatively clean safety profile in comparison.
Vivus opened the day at $14.15 a share and is seeing above-average volume. This is well down from Vivus’ high posted on July 18, 2012 of $31.21 a share. Their next earnings report is August 5.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for ARNA
Stockaholics
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RT @SharonAConklin: $NVO $ARNA $VVUS Why won't Medicare cover effective obesity drugs? Billions in savings,please call your congressmen. h…
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i alerted $ARNA  last night and it had a nice spike today from 4.29 open to 4.74 high, a good scalp for the ones… https://t.co/oV1ZiraB8G
KbestTrading
19 Sep 14 17:07:19
i alerted $ARNA last night and it had a nice spike today from 4.29 open to 4.74 high, a good scalp for the ones that traded it!
#WeightLoss
19 Sep 14 16:12:45
RT @Pzaa_Guy: $ARNA - Statement of Changes in Beneficial Ownership (4) http://t.co/gZP81AY7Tq
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CS" Qsymia $VVUS TRx/NRx 11014/7749 +9.9%/+13.0% w/w. Belviq $ARNA TRx/NRx 11569/8640 +15.0%/+19.7% w/w.
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$ARNA ...to reduce obesity by improving access to weight-loss counseling and new prescription medications for chronic weight management.
Simon Chouldjian
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$ARNA A solution is available in H.R. 2415, the Treat and Reduce Obesity Act which provides Medicare beneficiaries with meaningful tools....
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RT @simonig1: $ARNA Changing current rules to allow Medicare Part D to cover obesity drugs could save the country billions of dollars in he…
carl s
19 Sep 14 14:21:40
RT @simonig1: $ARNA Why won't Medicare cover effective obesity drugs?--> http://t.co/5ADcu3Cqxc
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19 Sep 14 14:21:39
$ARNA & $VVUS both closed at 4.16 No insight, just an observation
carl s
19 Sep 14 14:21:25
RT @SharonAConklin: $NVO $ARNA $VVUS Why won't Medicare cover effective obesity drugs? Billions in savings,please call your congressmen. h…
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$ARNA Changing current rules to allow Medicare Part D to cover obesity drugs could save the country billions of dollars in healthcare costs.
Simon Chouldjian
19 Sep 14 14:18:59
$ARNA Why won't Medicare cover effective obesity drugs?--> http://t.co/5ADcu3Cqxc
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19 Sep 14 14:11:02
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RT @Pzaa_Guy: $ARNA - Statement of Changes in Beneficial Ownership (4) http://t.co/gZP81AY7Tq
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$ARNA New SEC Document(s) for Arena Pharmaceuticals, Inc. From our Stock News Alerts App
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$ARNA - Statement of Changes in Beneficial Ownership (4) http://t.co/IQPMj8KnbF
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$ARNA - Statement of Changes in Beneficial Ownership (4) http://t.co/Q3Qyjsyt0H
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$ARNA - Statement of Changes in Beneficial Ownership (4) http://t.co/9LnKK7TsjY
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19 Sep 14 13:46:18
$NVO $ARNA $VVUS Why won't Medicare cover effective obesity drugs? Billions in savings,please call your congressmen. http://t.co/K3cB394sTU
Sterph1
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19 Sep 14 13:15:37
This is probably the most sickening 1 day gyration in $ARNA stock in its history. Oh yeah there is no manipulation at all. We all know that!
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$NETE Gained 551.93% In The Past 6 Weeks! Major News: http://t.co/PU7GW934W5 $TECD $ARNA $AET
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19 Sep 14 12:30:23
RT @redacre: $ARNA just saw belviq tv spot while kI'd was watching tv on MTV2
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19 Sep 14 12:28:41
$ARNA just saw belviq tv spot while kI'd was watching tv on MTV2
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$ARNA 5 Things Arena Pharmaceuticals, Inc.'s Management Wants You to Know http://t.co/0u4oz70Ksh
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Real-Time feed of company contracts, original agreements and executive updates from Arena Pharmaceuticals, Inc. $ARNA http://t.co/qiICMAVHp0
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RT @mikezzz111: @jembalabala IMS BELVIQ 11,569. TRX up 15.0%. NRX up 19.7%. Excellent numbers. $ARNA.
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$ARNA | Arena Pharmaceuti is down 27% since we reported $1,308,582 of insider selling on 07/03/2014. Did you ... - http://t.co/ZC31TJwV8N
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@jembalabala IMS BELVIQ 11,569. TRX up 15.0%. NRX up 19.7%. Excellent numbers. $ARNA.
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RT @toobigtofails: $arna know what you hold folk..."gold mine"
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19 Sep 14 10:33:52
bought back full position w/ 4.25-.27 $ARNA
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19 Sep 14 10:31:41
@biogemfinder What are the IMS numbers? $ARNA
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19 Sep 14 10:30:22
$arna know what you hold folk..."gold mine"
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RT @SharonAConklin: $ARNA $VVUS Belviq single agent launched 9 months after Q. has now surpassed Q. This w/o Belviq phen combo results …
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19 Sep 14 10:22:57
Commented on StockTwits: $ARNA but all sorts of forces are out today to curb ANY and ALL enthusiasm for this stoc... http://t.co/dcTgo5zWri
				
				
  +Follow June 20, 2013 2:51PM
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