U.S. President Donald Trump, Eli Lilly and Novo Nordisk announced an agreement to reduce the price of the popular GLP-1 weight loss drug for government Medicare and Medicaid programs and cash payers.
The agreement, announced Thursday, aims to increase access to care through U.S. Medicare for people 65 and older and the Medicaid program for low-income people, which together would provide health insurance coverage to nearly half of all Americans.
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U.S. patients currently pay by far the most for prescription drugs, often nearly three times as much as in other developed countries, and President Trump is pressuring drug companies to lower prices to what patients would pay in other countries.
“The world is going to be equal,” Trump told reporters from the Oval Office, noting that Lilly and Novo plan to offer other drugs to Medicaid at “most-favored-nation” prices.
The event ended abruptly when an attendee collapsed in the Oval Office.
If approved, the first dose of rival weight-loss drugs being developed by Lilly and Novo will cost $149 a month for all Medicare and Medicaid enrollees through TrumpRx, the White House’s new direct-to-consumer site, administration officials said.
They said the price of currently available injectable GLP-1 used for diabetes and other targeted health problems would drop to $245 per month for Medicare or Medicaid patients.
On TrumpRx, average prices for shots and pills start at less than $350 per month and are expected to drop to $245 within two years.
Lilly announced that under the new agreement, the lowest dose of Zepbound will be available for $299 per month, with additional doses priced at $449 per month for cash-paying patients.
Officials say Medicare will limit patients’ out-of-pocket costs to $50 a month.
Commercial health insurers will also have access to prices estimated to be 25% lower than current cash prices.
Under the agreement, the government will expand GLP-1 coverage to overweight patients with prediabetes or heart disease, obese patients with comorbidities, and severely obese patients, who make up 10% of Medicare patients, officials said.
Currently, Medicare typically does not cover obesity medications. Medicaid coverage, which is administered by each state and jointly funded with the federal government, varies.
The agreed-upon prices are expected to go into effect no later than January for cash payers, mid-2026 for Medicare patients, and on an ongoing basis for Medicaid enrollees, depending on when each state signs on.
Administration officials said both companies would receive tariff relief as part of the deal. Lilly said it would be exempt from customs duty for three years.
Officials also said Novo and Lilly would receive fast-track regulatory vouchers for some of their future drugs.
Novo’s Wegovy and Lilly’s Zepbound are the only highly effective GLP-1 weight loss drugs sold primarily as weekly injections in the United States. List prices exceed $1,000 per month, but both offer a supply of $499 per month for cash buyers.
Novo Nordisk has committed to an additional $10 billion in investments in the United States, according to a White House fact sheet.
Lilly said the agreement will improve access to medicines for the approximately 40 million Americans covered by government insurance programs, as well as the millions of Americans who pay out-of-pocket.
The company announced that it will add its diabetes drugs Emgality, Trulicity, and Munjaro to its direct-to-consumer platform and offer them at prices 50-60% lower than their current list prices.
Wall Street’s reaction
Deutsche Bank analysts saw the deal as a potential catalyst for Lilly’s growth. It is estimated that the $150 monthly cap would give access to up to 15 million Americans if applied to orforglipron, an experimental weight loss drug that was successful in late-stage trials.
Deutsche Bank said that an estimated 20% of obese adults prefer pills to needles, which will increase their intake. Approximately 2.7 million Americans are currently taking Lilly’s Zepbound injection.
Lilly and Novo are competing to bring oral GLP-1 treatments to market. Novo’s once-daily oral drug Wegovy is under review by the Food and Drug Administration, with a decision expected later this year, while Lilly’s Orforglipron could be submitted to regulators by the end of the year and launched in 2026.
BMO Capital analyst Evan Sagerman said Lilly’s dominance in the GLP-1 space continues to deepen, with doctors and patients increasingly favoring Lilly’s drugs.
Pfizer and AstraZeneca previously entered into a new pricing agreement related to the TrumpRx platform.
On Wall Street, Novo Nordisk shares have fallen 3.6% since the market opened. Eli Lilly was relatively flat, rising just 0.03%. As of 2:00 p.m. (7:00 p.m. Japan time) in New York, Pfizer shares were up 1%, and AstraZeneca shares were up 3.4%.
