US President Donald Trump makes an announcement in the Oval Office of the White House in Washington, DC on November 6, 2025.
Andrew Caballero-Reynolds | AFP | Getty Images
President Donald Trump signed a landmark agreement Thursday. Eli Lilly and novo nordisk That could be a turning point in how many people have access to expensive blockbuster obesity drugs.
Under the agreement, Medicare will begin covering GLP-1 for obesity in certain patients for the first time in mid-2026, which some experts say could open up access to millions of older adults and encourage more employers and other private insurers to follow suit. Novo Nordisk and Eli Lilly are also lowering the price paid for GLP-1 in all state Medicaid programs, but it is up to states to choose coverage.
Coverage of obesity drugs among state Medicaid systems, employers and other private insurers remains uneven, as existing GLP-1 drugs, such as Eli Lilly’s obesity drug Zepbound and Novo Nordisk’s competitor Wegoby, have list prices of more than $1,000 per month.
Limited insurance coverage excludes patients who cannot afford high premiums. This lack of access has increased pressure on health plans and governments to expand coverage, and could signal major changes in agreements between governments and drug companies.
“It’s going to start with the government, it’s going to start with Medicare, and insurance companies will soon follow,” Nick Fabrizio, an associate professor in Cornell University’s Health Policy Program, told CNBC. “I think it’s coming.”
“This is a great step towards addressing a chronic and serious problem, and a great step for patients who feel there is no hope,” he said.
Eli Lilly CEO David Rix said at a press conference Thursday that approximately 8 million to 9 million people in the United States are using GLP-1. He said the addition of Medicare coverage under the deal could add up to 40 million new eligible patients and could facilitate the expansion of commercial plans to cover drugs.
The agreement could also address the lack of access to treatments for many patients with limited or no insurance coverage for obesity drugs by offering the treatments at a discount on the Trump administration’s direct-to-consumer website, TrumpRx.gov.
Monthly out-of-pocket costs for existing injectables and upcoming tablets could range from $50 to $350 starting next year, depending on the dose and insurance coverage a patient has.
Still, laws prohibit Medicare from covering weight-loss drugs, so any changes would require proposals from Congress. Eli Lilly’s Ricks told reporters on Thursday that for now, the government will launch the first pilot program in spring 2026 under an interim legal mechanism. Because it will be optional for Medicare prescription drug plans, “we expect that almost all plans will participate, although some plans may not participate,” he said.
But Ricks said the plan is to transition to a formal so-called Centers for Medicare and Medicaid Innovation Pilot Program in 2027, meaning it will be required for all Medicare Part D plans.
“We therefore expect broad coverage in all plans beyond 2026,” he said.
Medicare coverage could bring big changes
Perhaps the most notable feature of the deal is Medicare coverage of obesity drugs, which could make the treatment available to new patients in the program and lead to increased private insurance coverage.
Under the agreement, Eli Lilly and Novo Nordisk agreed to reduce the price paid by Medicare and Medicaid for GLP-1 to $245 per month. Specifically, under Medicare, certain patients would pay a $50 monthly copayment for all approved uses of injectable and oral GLP-1 drugs, including treatments for diabetes and obesity.
However, the Trump administration has placed some restrictions on whether Medicare beneficiaries are eligible to receive GLP-1 as part of their obesity, cardiovascular disease, and metabolic benefits. Eligible patients include patients with a BMI of 27 or higher and prediabetes or cardiovascular disease. People with a BMI of 30 or higher and associated health conditions. or those who are severely obese or have a BMI of 35 or higher.
GLP-1 for weight loss is approved for a wider range of people, including people who are obese or overweight with one associated medical condition. David Reisinger, an analyst at Leerink Partners, also said in a note Thursday that it is unclear whether the government will allow patients to continue taking GLP-1 for obesity even after their BMI levels have decreased.
Even with these restrictions, “I think it’s actually going to reach a significant number of people,” said Darius Lakdawala, chief scientific officer at the University of Southern California’s Schaefer Center.
JPMorgan analyst Chris Schott said the eligibility criteria mean that 80% of Medicare’s obese population could qualify for GLP-1 coverage, despite the limitations.
“Today’s agreement opens meaningful access to obesity drugs,” Schott said Thursday in a memo about Eli Lilly.
Lakdawala added that while there is no clear evidence that private insurers will follow the government’s plan and increase coverage, “it’s just going to be harder and harder for private insurers to continue to limit coverage when Medicare and Medicaid cover it.”
“That will also put some pressure on expanding the commercial scope of these drugs,” Lakdawala said.
The coverage of GLP-1 for obesity has increased slightly, but remains small. A May survey of more than 300 companies by the International Employee Benefits Foundation found that 36% of companies have GLP-1 coverage for both weight loss and diabetes, up from 34% in 2024.
Medicaid direct-to-consumer services could fill the gap
Lakdawala said the deal’s direct-to-consumer sales could help people who are underinsured, uninsured, or don’t have insurance for obesity drugs. Still, it’s unclear how many more patients the drug will reach.
Eli Lilly and Novo Nordisk have introduced lower-cost options for medicines for people who pay with cash and purchase medicines directly through their websites. But the deal with President Trump will give those patients even bigger discounts.
At TrumpRx, the average monthly cost for Wegovy, Zepbound and other injectable GLP-1s will start at $350 and drop to $250 within the next two years, Trump administration officials said. Eli Lilly and Novo Nordisk both offered some GLP-1 on their direct-to-consumer platforms for up to $450 to $500 per month.
An initial dose of Eli Lilly and Novo Nordisk’s obesity drug, expected to be released next year, will cost $149 per month with TrumpRx, Medicare and Medicaid.
Eli Lilly announced Thursday that it is cutting prices on its direct-to-consumer platform LillyDirect by $50. LillyDirect already offers drugs such as Zepbound at discounted prices to patients who pay cash. Zepbound’s multi-dose pen can be purchased for $299 per month for the lowest dose, with additional doses priced up to $449 per month.
Regarding Medicaid, Cornell University’s Fabrizio said states would want to start covering obesity drugs at a lower cost, but “the question is, how are we going to pay for it?”
About 12 states’ Medicaid programs cover obesity drugs, according to 2024 estimates from KFF, a health policy research organization. Although GLP-1 provides significant health benefits to Medicaid recipients, state programs already face limited budgets and administrative demands.
Fabrizio added that increasing taxes to cover drugs “could be a thorny issue.”
Still, JPMorgan’s Schott said offering lower prices to Medicaid programs could lead to a “significant increase in coverage” in the channel, where Zepbound’s penetration has been very limited.
