According to informed sources, Eli Lilly (LLY.US) has decided to terminate its pharmacy benefits plan with CVS Health (CVS.US) after the latter stopped covering Lilly’s blockbuster weight-loss drug in favor of its competitor Novo Nordisk’s (NVO.US) alternative. Starting January 1 next year, employees enrolled in Lilly’s health insurance plan will automatically transition to Rightway, a private pharmacy benefits manager.

Lilly, headquartered in Indianapolis, employs approximately 50,000 people. A company spokesperson stated that Lilly regularly evaluates benefits providers to ensure high-quality, cost-effective coverage. The spokesperson noted, “Rightway shares our commitment to innovation and exceptional care, while offering competitive pricing and services that align with the best interests of our employees, retirees, and their families.”

CVS Health declined to comment on specific client changes but emphasized an overall customer retention rate exceeding 90%. The pharmacy chain confirmed it offers plans covering both Lilly’s Zepbound and Novo Nordisk’s Wegovy, though such plans are “more expensive for sponsors” compared to standard options excluding Zepbound.

David Whitrap, a CVS spokesperson, said, “Earlier this year, we secured significant cost savings for clients by leveraging competition between Lilly and Novo Nordisk in negotiations.” In May, CVS’s pharmacy benefits unit, Caremark, removed Zepbound from its preferred drug list, prioritizing Wegovy instead. As one of the largest pharmacy benefit managers in the U.S., Caremark influences medication choices for millions of Americans. Lilly had warned that this decision could impact Zepbound’s sales.

Novo Nordisk and Lilly are locked in a fierce battle over the weight-loss drug market, projected to reach $100 billion by the end of the decade. With both drugs costing over $1,000 per month before discounts, companies must persuade insurers to cover their treatments. CVS’s preference for Wegovy may give Novo Nordisk an edge.

Additionally, through its partnership with Novo Nordisk, CVS offers Wegovy at $499 for self-paying customers across its 9,000+ pharmacies nationwide. In a recent interview, Lilly CEO Dave Ricks remarked, “We’ve shifted our pharmacy benefits manager from a traditional model to a new, tech-driven fintech-oriented provider.”

A Rightway spokesperson added, “We’re thrilled to collaborate with Lilly’s benefits team to deliver innovative, top-tier coverage for employees, retirees, and their families.”