U.S. Government Secures Agreements for Reduced Drug Prices
The Trump administration has announced agreements with pharmaceutical companies Novo Nordisk and Eli Lilly to reduce prices for specific obesity and Type 2 diabetes medications for Medicare beneficiaries. These deals are part of the "most-favored-nation drug pricing" initiative, an effort to align U.S. drug prices with those in other developed countries.
Coverage and Cost Details
Under these agreements, Medicare beneficiaries will have a $50 monthly copay for the covered drugs. The companies will provide these medications to Medicare and state Medicaid programs at a rate of $245 per month. State Medicaid programs retain the option to opt into these agreements separately.
While the companies' drugs were already covered for Type 2 diabetes, the new deals extend coverage to certain patients who are overweight or obese, provided they meet specific health criteria.
Eligibility Criteria for Expanded Coverage
Expanded coverage for overweight or obese patients will be available under the following conditions:
- A body mass index (BMI) over 27 with established prediabetes or cardiovascular disease.
- A BMI over 30 with uncontrolled hypertension, kidney disease, or heart failure.
- A BMI over 35.
A senior administration official stated that the initiative aims to enhance public health by preventing conditions such as strokes, heart attacks, and end-stage renal disease.
Broader Policy and Future Initiatives
These agreements are consistent with earlier deals made with Pfizer and AstraZeneca. They include provisions for lower Medicaid prices, commitments from companies to launch new drugs in the U.S. at prices comparable to those in other developed nations, and discounted rates for uninsured patients through TrumpRx.gov.
Novo Nordisk and Eli Lilly have also agreed to offer starting doses of their prospective obesity pills, if approved by the FDA, at $149 per month for individuals covered by Medicare, Medicaid, and TrumpRx. Eli Lilly has applied for an FDA voucher, which could accelerate the review and approval process for its products.
Current injectable medications will be available via TrumpRx without insurance at an average of $350 per month, a reduction from approximately $500. These prices are slated to decrease further to $245 over the next 24 months. Specifically, Eli Lilly stated it would reduce its direct-to-consumer price for Zepbound by $50, setting it at $299 for the starting dose and $449 for higher doses.
Incentives and Timeline
In exchange for these commitments, the pharmaceutical companies will receive a three-year exemption from specific tariffs. The TrumpRx website, designed to direct consumers to pharmaceutical companies' direct-to-consumer platforms for orders, is projected to launch in 2026. These agreements follow an executive order issued in May and subsequent requests to 17 pharmaceutical companies to voluntarily reduce prices.