Trump Cuts GLP-1 Drug Prices, Expands Medicare Coverage

The Trump administration’s agreement with Eli Lilly and Novo Nordisk represents one of the most substantial pharmaceutical pricing interventions in recent memory. Under the terms announced Thursday, some monthly GLP-1 drug costs will drop to about $250, while future GLP-1 medications will launch at a maximum price of $149. The deal also includes a revolutionary Medicare expansion that will cover GLP-1 drugs for obesity treatment for the first time, with patient co-pays set at approximately $50 monthly. This marks a dramatic departure from current practice, where insurers have largely resisted coverage due to high drug prices and rising utilization.

President Donald Trump highlighted the international pricing disparities that motivated the negotiations, noting during the announcement that “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.” The administration estimates that approximately 10% of Medicare beneficiaries will qualify for coverage under the new plan based on body mass index criteria and preexisting conditions such as prediabetes and cardiovascular disease. The changes are expected to take effect in the middle of next year, with some Medicaid enrollees gaining access to lower prices beginning in 2027 through a forthcoming pilot program.

Central to the administration’s strategy is the introduction of TrumpRX, a government website that will allow consumers to purchase GLP-1 drugs directly through a federal purchasing option. President Trump emphasized the personal branding of the platform during the press conference, stating “They want to use my name, Trump. Better be good. I think it’s turning out to be pretty amazing.” The agreement also requires Eli Lilly and Novo Nordisk to provide all their other medications to Medicaid at ‘most favored nations’ prices, ensuring the government pays the lowest price available anywhere in the world.

To support the expanded access and anticipated increased demand, both pharmaceutical companies have committed to major U.S. manufacturing investments. President Trump confirmed that the companies “are building new plants” to produce GLP-1 medications domestically, addressing supply chain concerns that have previously limited availability. These manufacturing expansions represent significant capital investments in American pharmaceutical production capacity that could create jobs while ensuring stable drug supplies.

The announcement triggered immediate market reactions, with shares of Eli Lilly (LLY) initially jumping before settling at a recent gain of about 1% to $936, while Novo Nordisk (NVO) declined approximately 4% to $46 amid broader market weakness. The mixed investor response reflects uncertainty about how the price reductions will affect long-term profitability for the drugmakers, despite the potential for significantly expanded patient access.

Health and Human Services Secretary Robert F. Kennedy Jr. framed the agreement as a transformative moment for American healthcare, stating that “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 predicted that the deal would lead to declines in both healthcare costs and disease prevalence, describing the negotiations as taking “months and months” and characterizing the resulting agreement as having “the biggest impact on the American people” among recent health policy moves.

Notably absent from the press conference were representatives of major insurance companies, who have not indicated whether they will adjust their coverage policies in response to the new pricing structure. Until now, insurers have limited access to GLP-1 drugs primarily because of high costs and the large number of patients seeking them for weight-loss treatment. The administration did not specify when commercial insurers might revise their coverage rules, leaving open a crucial question about how broadly these medications will become available beyond government healthcare programs.

GLP-1 drugs, which mimic a natural hormone involved in regulating blood sugar and appetite, were originally developed for diabetes treatment but have gained widespread popularity for weight management due to their ability to slow digestion, reduce hunger, and help control blood glucose levels. The Trump administration’s pricing initiative represents a strategic effort to expand access to these medications as part of a broader campaign against obesity and diabetes, conditions that affect millions of Americans and contribute significantly to healthcare costs.

President Trump concluded the announcement by declaring “This is a great day for American health and health care. For all American patients, these are things that are miracles.” The administration indicated that final implementation of the Medicare provisions would be completed after further review, suggesting that additional regulatory details may emerge in coming months. As the healthcare industry digests these sweeping changes, all eyes will be on whether commercial insurers follow the government’s lead in expanding coverage now that pricing barriers have been substantially reduced.