President Trump announced on Nov. 6 that the manufacturers of popular weight-loss drugs have agreed to reduce prices that Americans pay.
The announcement follows Trump’s executive order from May when he ordered pharmaceutical companies to address the higher price of their drugs in the U.S. compared to other countries, and to charge Americans the lowest price worldwide.
In the deal, Eli Lilly and Novo Nordisk agreed to drop prices of their injectable GLP-1-based drugs to $350 for a month’s supply, and to further reduce that cost to $245 over the next two years. The drugs currently cost about $1,000 for a month’s supply, or about half that amount if patients obtain them directly through the companies through newly launched direct-to-consumer programs. The pricing applies to a new version of Lilly’s weight-loss drug, Zepbound, that could come in a single, multi-dose pen—it currently is sold in differently dosed vials as patients start at low doses and work their way up to higher doses. Both companies also have an oral GLP-1 based pill for weight loss; Novo Nordisk’s is currently being reviewed by the U.S. Food and Drug Administration (FDA), and Lilly plans to submit a request for approval of its product by the end of the year. If approved, the pills would cost $149 for a month’s supply. The FDA also announced that Lilly’s oral drug, orforglipron, is part of a program in which certain drugs would receive priority vouchers that would entitle them to much shorter review periods for approval, on the order of weeks or months rather than a year or more.
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Those prices are the out-of-pocket costs for patients getting them without insurance and through the government, using taxpayer funds. Because these prices will now be transparent and available to patients, commercial insurers and employer-based insurance plans are expected to follow suit and cover the drugs at the reduced prices. Lilly CEO David Ricks said during a Nov. 6 company press conference that currently, about six in 10 employers cover the company’s weight loss drug for their workers, and hoped the announcement today would be a “triggering” event to incentivize more to do so.
The decision is the first step toward the goal of equalizing drug prices so Americans aren’t paying more for the same drugs than people in other parts of the world. That gap is due to a complex drug-payment model that involves pharmacy benefit mangers who manage prescription drug benefits for insurance companies and employers, and have utilized their mass buying power to drive drug prices up. “Our expectation is that by making prices transparent and through government coverage of them in Medicare, it will make it increasingly uncomfortable for employers or pharmacy benefit managers who have chosen not to cover this important class of medicines,” Dr. Dan Skovronsky, chief scientific officer at Lilly, tells TIME. “I think the scale and effectiveness that a small molecule like orforglipron can achieve at a $149 per month price point will change the lives of many Americans.”
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It’s not immediately clear how long the terms of the deal are. The agreement involves the pharmaceutical companies reducing prices to cash-paying and government programs for not just the weight-loss drugs but a portfolio of other products as well, and also providing certain new products to the American market at so-called most-favored nation status pricing, or the lowest price for which it sells its drug in the world. For the government’s part, it would provide priority vouchers from the FDA for quicker review and potential approval of a selected group of new products.
For Medicare beneficiaries, the deal with Lilly and Novo Nordisk expands coverage beyond diabetes to include obesity as well—which would cover an additional 10% or so of Medicare beneficiaries. Medicare would start to cover the drugs at $245 a month for both diabetes and obesity; currently, Medicare covers the drugs to treat diabetes but not for obesity. Beneficiaries would only be responsible for a $50 copay per month.Â
The expanded coverage would not cost taxpayers, senior White House officials said, because the new cost to the Centers for Medicare and Medicaid Services represents a savings on the diabetes indication; that savings will fund paying for coverage for obesity. They expected to roll out the new pricing in spring or mid 2026.
Senior officials said that Medicare beneficiaries seeking coverage for GLP-1 drugs for obesity would have to meet strict eligibility criteria and that these would follow Make America Healthier Again principles to address chronic disease risk factors. The drugs would be covered for people with a body mass index (BMI) at or above 27, for example, if they also have other metabolic risk factors, such as prediabetes, since the medications could lower their risk of developing diabetes, stroke, heart attack, or peripheral artery disease.
For those with a BMI over 30, the drugs would be covered if they also have serious kidney disease, heart failure, or uncontrolled high blood pressure. For people without any of these conditions, Medicare would cover the drugs for obesity if they have a BMI of 35 or greater.
Medicaid beneficiaries would also receive reduced prices, but the timing of when these would be launched would depend on individual states.
