President Donald Trump announced Thursday morning that Novo Nordisk and Eli Lilly have agreed to lower the price of two popular GLP-1 medications for weight loss. Lilly’s Zepbound will now cost $346 per month, down from $1,080, while Novo’s Wegovy will now cost $250, down from $1,350, Trump said.
Both companies also agreed to sell oral GLP-1 medications, which are currently under development, for no more than $149 per month.
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The announcement is the latest of the administration’s efforts to reduce the price of prescription drugs in the U.S., something Trump has promised since his first presidential campaign.
“The United States is just 1% of the world’s population and consumes only 13% of all prescription drugs yet pharmaceutical companies make 75% of their profits from American customers,” Trump said during his announcement in the Oval Office.
Americans pay almost three times more for prescription medications than other developed countries, according to the Department of Health and Human Services, even though more than half of those drugs were first developed in the U.S.
That cost gap is predicted to widen as the price of drugs has risen faster in the U.S. than elsewhere.
The administration previously announced deals with Pfizer and AstraZeneca, which agreed to sell medicines directly to Americans at steep discounts and to sell their drugs to every State Medicaid program at the most-favored-nation price, the lowest price paid by any other developed country.
In mid-October, the administration reached an agreement with EMD Serono to lower the cost of a common fertility medication.
Eli Lilly and Novo Nordisk have now also agreed to sell all their drugs to Medicaid at the most-favored-nation price, Trump announced. Eli Lilly also agreed to invest $27 billion and Novo Nordisk $10 billion into U.S. drug manufacturing.
Several experts who spoke with Straight Arrow News noted that the Trump administration’s direct negotiations with pharmaceutical companies are unprecedented.
The administration also announced recently that it was developing TrumpRx, a website where Americans can buy discounted medications directly from pharmaceutical companies, bypassing insurance.
Trump first announced in October that his team was working with several companies to lower the price of GLP-1 medications, which were first approved in 2005 to treat diabetes and then in 2014 for weight management. These drugs mimic GLP-1, a hormone normally found in the body, to stimulate the pancreas’s production of insulin after meals — which is important for diabetes management. GLP-1 drugs also suppress appetite by slowing the movement of food from the stomach to the small intestine and affecting areas of the brain that process hunger.
Although many insurance plans cover GLP-1 drugs when they are used to treat Type 2 diabetes, few help pay for them when used solely for weight management.
In April, the administration dropped a Biden-era effort for Medicare to cover GLP-1 medications for obesity treatment specifically. (The drugs are approved for treating other conditions such as Type 2 diabetes or obstructive sleep apnea.) The Congressional Budget Office estimated that up to 12.5 million Americans would qualify for anti-obesity drugs under Medicare, costing the government some $35 billion between 2026 and 2034.
Health leaders within the administration have sent mixed signals about the use of GLP-1 medications to treat obesity. Dr. Mehmet Oz, the administrator for the Centers for Medicare and Medicaid, has said the medications are “massively beneficial,” and has pushed for expanding Medicare coverage. Robert F. Kennedy Jr., secretary of the Department of Health and Human Services, has remarked that while these drugs have their place, lifestyle changes should be the first line of treatment.
Kennedy reiterated Thursday that reducing the price of GLP-1 drugs and making them more accessible to all Americans, not just wealthy individuals, is an important step toward tackling the obesity and chronic disease crisis in the U.S.
“This is a tool in the toolkit. It is not a silver bullet,” he said. “It will allow a lot of people who are locked into high-risk obesity to finally lose weight, to reset and then start doing the kind of things that will address the root causes of obesity.”
The collective impact will be huge, officials said.
Americans will lose “125 million pounds” by next year, Kennedy asserted.
Why are drug prices so high in the US?
In the U.S., drug prices are determined through a fragmented and opaque process, which is largely why Americans pay more than Canadians and Europeans for the same medicine.
First, the drug manufacturer sets a list price for each drug it makes. Then, middlemen organizations called pharmacy benefit managers, negotiate on behalf of private insurance companies for rebates on each drug, explained Luca Maini, assistant professor of health care policy at Harvard Medical School.
As a result, different U.S. insurance companies pay different amounts for the same drug. The amount that the patient pays depends on the exact insurance plan they have, including their co-pay, deductible and cost-sharing, but generally the patient pays much less than the list price minus the rebate.
For government-run insurance like Medicare and Medicaid, drug prices are usually set using statutorily set formulas. Medicaid generally receives a 23.1% rebate on brand-name drugs and a 13% rebate on generic drugs unless the drug manufacturer enters a deal with a private insurance company at a higher rebate. In that case, the pharmaceutical company must sell drugs to Medicaid at the best rate offered to any U.S. insurance company.
The best price clause for Medicaid drug pricing is limited to the U.S. market, though; it does not matter if a drug manufacturer sells a drug to another country at a much lower rate. Many of Trump’s efforts around drug pricing — including his wide-sweeping deals with AstraZeneca and Pfizer — have focused on this detail specifically, forcing drug companies to sell drugs in the U.S. at the best price offered to any developed country.
If an insurance plan does not cover a drug, as is often the case with GLP-1 medications used strictly for weight management, some drug manufacturers offer a savings plan to help patients pay for a medication. Americans can also buy prescription drugs directly from a pharmaceutical company or telehealth companies such as ro or GoodRx.
The process in the U.S. is markedly different from other developed countries, most of which have a single national health system and where the government directly negotiates the price of drugs with pharmaceutical companies. Foreign governments tend to have much higher bargaining power because they represent an entire nation’s market.
Prior to Trump’s announcement, the average list price of Ozempic in the U.S. was $936 for a one-month supply. For Mounjaro, the monthly cost was $1,023, according to an analysis by KFF. Japan had the second-highest price for these two drugs: $169 per month for Ozempic and $319 for Mounjaro. Ozempic was cheapest in France at $83 for a one-month supply. Some drug manufacturers were already selling GLP-1 medications directly to U.S. consumers. Elli Lilly, maker of Mounjaro, sold another GLP-1 drug, Zepbound, directly to patients for $349 per month, while Novo Nordisk, maker of Ozempic, sold Wegovy directly to Americans for $500.
Pharmaceutical companies have argued that the higher price of drugs in the U.S. market supports innovation by allowing them to recoup the high cost of research and development, including drugs that fail to reach approval.
In his executive actions, Trump repeatedly says his administration’s efforts will ensure that foreign countries can no longer “freeride on American innovation.”
