Lisa Jarvis: Obesity drugs for all? White House deal is just a start

A White House deal with Eli Lilly & Co. and Novo Nordisk to lower the prices of their popular obesity medicines, Zepbound and Wegovy, is a step toward making them more affordable and accessible to Americans — but until we have more details, it’s hard to tell how big a step it really is.

The agreement, announced Thursday by the Trump administration, has several key components. For the first time, Medicare will cover obesity medicines, allowing older Americans who qualify for the drugs to obtain them for a $50 monthly copay. Medicaid and Medicare will pay $245 per month for Lilly and Novo Nordisk’s GLP-1 drugs used to treat both diabetes and obesity. Meanwhile, Americans outside of these programs will be able to purchase them at a discount through the new platform, TrumpRx.

Lilly and Novo Nordisk have emerged as clear winners in this deal. In addition to expanded Medicare coverage for their drugs and a potentially larger market for their cash-pay businesses, both companies will enjoy a three-year reprieve from President Donald Trump’s tariffs on all their products and have been granted Food and Drug Administration vouchers for expedited review of one new treatment each.

To be fair, the health and societal benefits of Wegovy and Zepbound are undeniable. In fact, they are so significant that a recent draft report from the Institute for Clinical and Economic Review (ICER) — a nonprofit that evaluates the cost-effectiveness of biomedical innovations — found the drugs to be fairly priced even at their current high levels.

Still, value is not the same as affordability. Various organizations have attempted to estimate the impact of Medicare covering GLP-1s for everyone eligible. Last year, the Congressional Budget Office estimated that such coverage would increase spending by roughly $35 billion over the next decade, while a more recent analysis by a group of academic researchers put the figure closer to $48 billion.

The Trump administration claims that the prices it negotiated will make extending Medicare coverage to weight-loss treatments a cost-neutral initiative within two years.

That is likely in part because the deal doesn’t exactly throw open the floodgates of access for older Americans. Certain people covered by Medicare already have access to the drugs if, for example, they are at risk of a heart attack or stroke. The new plan extends coverage to weight loss, but only for people with severe obesity. Others will need to have, or be at risk of, a related health condition to qualify. Those guidelines make roughly 10% of Medicare beneficiaries eligible for coverage.

It's also worth asking about the underlying reason for these savings. Was that $245 monthly price the result of Trump’s dealmaking, or is it instead due to Medicare’s new authority to negotiate drug prices? Semaglutide, the active ingredient in Wegovy and Ozempic, was included on this year’s list of drugs subject to price negotiations, the outcome of which the government is expected to announce any day now. The $245-per-month cost “could very well be the fair price that was negotiated,” says Stacie Dusetzina, who studies drug policy and prices at Vanderbilt University.

Regardless of the true source of the savings, “the good news for the consumer and for taxpayers is that this is a much lower price than we think the net prices were for those drugs before,” she says. Trump’s deal also got Lilly to agree to a lower price for its medicines that had not been up for Medicare negotiation. (Dusetzina notes that in a highly competitive market, the company had an incentive to do so to ensure its drugs remain eligible for Medicare coverage.)

That $50 copay is also a win for Medicare beneficiaries, as is the very notion that obesity medicines are now being covered for seniors. “Any increase in access is good,” says Diana Thiara, medical director of the University of California, San Francisco, Weight Management Program, adding that getting Medicare to finally cover obesity medications — even if in a limited way — is a positive step toward acknowledging and treating obesity as a disease. “We’ve been advocating for years to repeal this idea that obesity medicines are for vanity.”

If there’s a sense that the Medicare side of the deal represents progress toward making these drugs more affordable and accessible, the benefits of the other side of Trump’s big GLP-1 announcement — that the drugs will be offered on TrumpRx at “lower” prices — are less certain.

So far, the administration’s plan only specifies that the average monthly price of Wegovy and Zepbound will be around $350 initially, dropping to $245 over two years. It also promises the starting dose for Lilly’s obesity pill, orforglipron — expected to receive FDA approval next year — will cost $149 per month. And while that is lower than the lofty list prices for the products, both Novo and Lilly already sell their drugs at a discount through their own direct-to-consumer sites for about $500 per month.

Lilly separately announced that it will start selling the pen version of Zepbound on its direct-to-consumer website at a $50 discount across all doses.

To be sure, any price cut is welcome for people already paying cash for the drugs. But at a time when many Americans are struggling to afford groceries, it’s hard to imagine anything short of a much steeper discount — or, ideally, broad insurance coverage — making these drugs genuinely accessible, particularly for the most vulnerable.

Any progress on an issue that has felt so intractable is also welcome. But it’s still too early to know how much this deal will actually change people’s lives by expanding access to GLP-1s or help rein in the country’s ballooning health care costs. As more details emerge, let’s hope the balance of the benefits shifts more heavily toward patients and taxpayers than Big Pharma.

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This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Lisa Jarvis is a Bloomberg Opinion columnist covering biotech, health care and the pharmaceutical industry. Previously, she was executive editor of Chemical & Engineering News.