The agreement

The agreement between the two pharmaceutical manufacturers and the federal government was announced on November 6, 2025 in a White House fact sheet from the White House and press releases from Eli Lilly and Novo Nordisk. Eli Lilly and Novo Nordisk manufacture several GLP-1s that will be covered under the agreement.

GLP-1s agonists are a class of medications that help manage blood sugar levels in people with Type 2 diabetes and can also help treat obesity. Although generally the medications are injectables, the agreement will be expanded to some oral medications once they are approved by the U.S. Food and Drug Administration (FDA).

The agreement also requires additional investment in U.S. manufacturing of prescription drugs. It also provides a three-year reprieve from tariffs for the manufacturers.

However, there are no specific details about the arrangement or how it will be implemented.

Direct-to-consumer pricing

The medications subject to the agreement, their price for the DTC channel and the manufacturer are noted in the following table.

* Although this drug, which treats migraines, is not a GLP-1, it is part of the agreement.

Sources: November 6, 2025 White House fact sheet and manufacturer press releases

To learn about GLP-1s, see our article, “New Drugs for Weight Loss: What Plan Sponsors Need to Know.”

It appears that the TrumpRx prescription drug website, expected to be launched in early 2026, will link to the manufacturer DTC websites to allow purchase of the medications. Some medications are already available on LillyDirect, but the prices will be lowered. Lilly states that there will be a $50 discount from current DTC prices, similar to what is available in Europe.

Medicare and Medicaid

Medicare does not currently cover GLP-1 medications for weight loss, but does cover them for other indications, such as diabetes and cardiovascular risk reduction. In 2024, the Biden administration proposed that Medicare cover GLP-1s for weight loss, but the Trump administration did not finalize that proposal.

Because Medicare Part D is currently not permitted to cover GLP-1s for weight loss, it appears that the Centers for Medicare & Medicaid Services (CMS) will create a pilot program to cover the drugs beginning as early as April 2026. According to press reports, the initial pilot program would be voluntary but the program would become mandatory in 2027 — likely through statutory or regulatory action. Part D plans would cover the medications, which would be priced at $245 per month. Copayments for the drugs for Medicare beneficiaries will be no more than $50 per month.

The criteria for coverage under Medicare and Medicaid for weight loss was announced to be patients “at high metabolic or cardiovascular risk” with:

• A body mass index (BMI) greater than 27 with prediabetes or established cardiovascular disease or who have had a stroke
• BMI over 30 and uncontrolled hypertension despite treatment, advanced kidney disease, or heart failure
• BMI greater than 35

Medicare is required to negotiate prices for certain high-cost medications under the Inflation Reduction Act. For 2027, Ozempic and Wegovy are listed among the medications for which a negotiated price will be set. It is unclear whether the new agreement is tracking prices at the same amount as will be negotiated. CMS should announce the negotiated prices for the 2027 drugs by November 30, 2025, with an effective date of January 1, 2027.

Medicaid programs will have access to the medications at the same prices as Medicare. However, it is unclear whether states would be required to cover the medications.

Impact of the GLP-1 agreement on employer-sponsored health plans

The price reductions announced in the agreement are only for Medicare, Medicaid, and DTC coverage. Consequently, the agreement does not directly impact group health plans.

It is unclear what effect this deal will have on group health plans covering active participants and retirees under age 65. Some speculate that the price improvements offered to the government will also make their way to group health plans. Others believe the manufacturers will look to make up for these price concessions with price increases (or lower rebates) for group health plans.

It is also unclear whether individuals who have coverage under a group health plan will be able to take advantage of the lower pricing offered through the TrumpRx DTC program. Availability of these drugs on TrumpRx is anticipated sometime in 2026.

For plan sponsors that offer Medicare Part D coverage (either traditional or a Medicare Advantage Prescription Drug Plan), this agreement will likely result in a cost increase in the short run, as those plans will now cover GLP-1s for weight loss for the first time. As noted above, Medicare patients seeking coverage for GLP-1 drugs for weight loss will be required to meet one of several clinical criteria.

Segal will continue to review details of this agreement as they become available.