President Donald Trump announced a landmark agreement Thursday with pharmaceutical giants Eli Lilly and Novo Nordisk to dramatically slash prices for their blockbuster weight-loss drugs, potentially cutting monthly costs from over $1,300 to as low as $149.
The deal marks a major victory for the administration’s “Most Favored Nation” pricing push and signals a turning point in how the federal government approaches drug affordability.
In exchange for slashing prices, the companies gain expanded Medicare coverage for obesity treatments and tariff relief on imported drugs.
The move comes as a trade-off that could reshape the $100 billion weight-loss drug market and bring these life-altering medications within reach for millions of Americans who previously couldn’t afford them.
How the deal works: A breakdown of pricing and Medicare access
The agreement introduces multiple pricing tiers designed to make GLP-1 medications accessible across different consumer segments.
For consumers paying out-of-pocket through TrumpRx, the administration’s direct-to-consumer platform launching in early 2026, injections like Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound will initially cost $350 per month, dropping to $245 monthly within two years.
Here’s where it gets genuinely significant: the lowest-dose oral tablets, pending FDA approval, will be priced at just $149 monthly, representing a staggering 88% discount from current list prices exceeding $1,300.
For Medicare beneficiaries, the landscape changes even more dramatically.
Eligible seniors will pay a $50 co-payment for approved GLP-1 medications used to treat both obesity and diabetes, while Medicare itself reimburses manufacturers at $245 per month, substantially below the current $1,000-plus list prices.
Novo Nordisk and Eli Lilly have committed to extending this $245 government pricing to all 50 state Medicaid programs, though states must opt into these arrangements individually.
The eligibility criteria, however, represent a more conservative approach than the Biden administration’s previous proposal.
Rather than opening access to all obese Medicare beneficiaries, Trump’s framework targets roughly 10% of the program’s 66 million enrollees.
It includes specifically those who are overweight with prediabetes or cardiovascular disease, individuals with obesity and uncontrolled hypertension, or patients with severe obesity and related health conditions.
This measured approach differs from Biden’s plan, which would have cost Medicare an estimated $25-35 billion over a decade but would have reached approximately 3.4 million beneficiaries.
Why this matters beyond just lower prices
The pharmaceutical companies aren’t simply accepting price cuts out of altruism; they are making calculated bets on volume and future growth.
Novo Nordisk CEO Mike Doustdar emphasized that expanded Medicare coverage represents “a pivotal moment,” signaling the company’s confidence that lower prices combined with government backing will drive unprecedented demand.
The deal also grants both companies expedited FDA review timelines and potential tariff exemptions, sweeteners that Trump leveraged to secure what he considers his signature domestic achievement.
For the broader market, the agreement signals a fundamental shift in bargaining power.
Trump has repeatedly and publicly highlighted GLP-1 drugs as his go-to example of pharmaceutical price gouging, even joking about the “fat drug” and referencing that Ozempic costs $88 in London but $1,200 in New York.
By securing this high-profile deal, the administration strengthens its negotiating position with other drugmakers facing similar “Most Favored Nation” pressures. Pfizer and AstraZeneca have already agreed to similar arrangements.
However, questions remain about implementation. The $149 pricing only applies to lowest-dose oral tablets not yet approved by the FDA. Higher doses will cost substantially more.
Private insurers remain largely uninvolved in these negotiations, meaning their pricing decisions could diverge significantly from government rates.
Additionally, the staggered rollout, with key provisions taking effect in mid-2026, suggests patients shouldn’t expect immediate relief at their local pharmacy.
What’s undeniable is that Thursday’s announcement represents one of the most significant drug pricing victories of Trump’s presidency and could permanently alter the economics of the $100 billion obesity medication market.
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