In brief
- The plan is tied to a Medicare pilot that would have allowed some GLP-1 coverage for the first time.
- Insurers had resisted coverage of GLP-1s because of high drug prices and rising utilization.
- Lower prices could have forced insurers to revisit exclusions and authorization rules.
The Trump administration announced on Thursday a deal with Eli Lilly and Novo Nordisk to sharply lower the price of GLP-1 drugs, bringing some monthly costs down to about $250. Future GLP-1 drugs will launch at a capped price of $149 under the terms of the agreement.
For the first time, Medicare will cover GLP-1 drugs for obesity, with patient co-pays set at roughly $50. The administration also introduced a federal purchasing option that will allow consumers to buy GLP-1 drugs directly through a government website called “TrumpRX.”
“Eli Lilly and Novo Nordisk have agreed to provide all of their other medications to Medicaid at ‘most favored nations’ prices, meaning you will pay the lowest price anywhere in the world,” President Donald Trump said during the press conference.
Trump also highlighted the fact that the project bears his name.
“They want to use my name, Trump. Better be good,” he said. “I think it’s turning out to be pretty amazing.”
Trump added that the companies planned major U.S. manufacturing investments to support expanded supply, saying they “are building new plants” to produce GLP-1 medications domestically.
GLP-1 drugs are a class of medications that mimic a natural hormone involved in regulating blood sugar and appetite. They were originally developed for diabetes, but have become widely used for weight loss because they slow digestion, reduce hunger, and help control blood glucose levels.
Officials said the pricing changes were part of a broader effort to expand access to obesity and diabetes treatments. Shares of Eli Lilly (LLY) and Novo Nordisk (NVO) both jumped following the announcement, with LLY still recently up about 1% to $936, while NVO is down about 4% to $46 a share amid a broader daily decline for stocks.
Administration officials said about 10% of Medicare beneficiaries would qualify for coverage under the new plan, based on criteria tied to body mass index and preexisting conditions such as prediabetes and cardiovascular disease. Eligible patients would pay a $50 monthly co-pay, with the change expected to take effect in the middle of next year.
Officials also said some Medicaid enrollees could gain access to lower prices beginning in 2027 through a forthcoming pilot program run by the Centers for Medicare and Medicaid Services.
Trump previewed his approach in February, telling Fox News, “The so-called fat drug or fat shot, whatever it’s called, Ozempic or Mounjaro—in London, you get it for $88. In New York, you get it for $1,200, you can’t even buy it. It’s very unfair… I’m going to solve it one way or the other.”
Not present during the press conferences were representatives of major insurers, who did not say whether they would change their coverage rules in response to the new prices. Until now, plans have had limited access largely because of the high cost of the drugs and the large number of patients seeking them for weight-loss treatment.
During the press conference, Health and Human Services Secretary Robert F. Kennedy Jr. said the agreement would broaden access for patients who had been unable to afford GLP-1 drugs.
“Obesity is the number one driver of chronic disease. Fifty percent of our adult population are obese or overweight, and it drives about 50% of healthcare costs in this country,” Kennedy said. “We are going to see a decline because of this historic agreement. We’re going to see a decline in costs, but also, more importantly, in the afflictions themselves.”
The negotiations took “months and months,” Kennedy added, and described the resulting deal as poised to provide “the biggest impact on the American people” among recent health policy moves.
The administration did not say when commercial insurers might adjust their coverage policies. Officials said final implementation of the Medicare provisions would be completed after further review.
“This is a great day for American health and health care,” President Trump said. “For all American patients, these are things that are miracles.”
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