The news: Novo Nordisk and Eli Lilly struck a deal with the Trump administration to lower their GLP-1 prices in exchange for expanded Medicare and Medicaid coverage.

Why it matters: Novo’s and Lilly’s blockbuster GLP-1s are getting cheaper in exchange for Medicare access—and the Medicare market represents a large base of potential GLP-1 users.

Starting next year, Ozempic, Wegovy, and Zepbound will be priced at around $350 per month on TrumpRx, a new government-run online marketplace that links patients to discounted medication purchases. That’s less than the $499 monthly price on Novo’s and Lilly’s direct-to-consumer (D2C) platforms and at many pharmacies, and significantly down from the drugs’ list price of $1,000 per month. The $350 price point for self-pay patients is expected to drop to about $245 over the next few years, according to the administration.

Meanwhile, the starter prices of Novo’s and Lilly’s soon-to-come oral GLP-1s will be $149 for the lowest dose through TrumpRx. Neither company’s GLP-1 pill candidate has been approved by the FDA yet, but Novo is expected to be first to market with an early 2026 launch.

In return for these price cuts, Novo and Lilly will gain broader Medicare and Medicaid coverage for their GLP-1s.

• For context, Medicare does not currently cover the cost of GLP-1 medications when prescribed for weight loss (as opposed to for diabetes), while about one-quarter of state Medicaid programs cover GLP-1s for obesity.
• Ozempic, Wegovy, Mounjaro, and Zepbound will be priced at $245 in Medicare—but that’s what the government pays, not patients. Medicare members will have a $50 monthly copay.

Around 10% of the 66 million Medicare beneficiaries are expected to be eligible for the drugs starting next year with expanded access. This includes patients who are overweight or obese and also have another condition such as prediabetes, and patients considered severely obese. State Medicaid plans will have the choice to access the same discounted price of $245. Medicaid members typically pay very little out of pocket for prescription drugs.

The tariff incentive: Similar to other recent drug pricing deals between the administration and pharma companies, Novo and Lilly will get a three-year tariff reprieve, as long as they commit to making more of their products in the US, and have secured FDA priority review vouchers for their oral weight loss treatments. Novo and Lilly will also cut cash prices on other drugs, including those for migraines and diabetes. They’ll also apply most-favored-nation drug prices for new products it brings to market.

What it means for the GLP-1 drug market: The Trump administration’s GLP-1 pricing deal with Novo and Lilly is by far its most consequential pharma agreement to date.

For Novo and Lilly, it’s a tradeoff: lower prices for higher patient and prescription volume—a bet that should pay off over time, especially since tariff relief is part of the deal. Between 6% and 12% of Americans use GLP-1 drugs, a share that will rise sharply as Medicare coverage substantially expands and prices in the cash-pay market drop to ~$250 per month over the next few years.

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