The Trump administration announced deals with Novo Nordisk and Eli Lilly to sharply lower prices on several blockbuster obesity and Type 2 diabetes medicines for people on Medicare and, optionally, state Medicaid programs. The agreements, unveiled from the Oval Office, are part of a broader “most-favored-nation” effort to align U.S. drug prices with those in other developed countries.
Under the accords, the manufacturers pledged to offer covered drugs to Medicare and Medicaid for $245 per month. Medicare beneficiaries will face $50 monthly copays beginning in April; state Medicaid programs must opt in separately. Officials said the programs already cover the companies’ FDA-approved Type 2 diabetes drugs, and the agreements extend coverage in some cases to patients who are overweight or have obesity.
Eligibility rules limit coverage for obesity treatment to patients who meet specified clinical criteria: a BMI over 27 with established prediabetes or cardiovascular disease; a BMI over 30 with uncontrolled hypertension, kidney disease or heart failure; or a BMI over 35. Senior administration officials stressed the purpose is to prevent serious chronic conditions such as strokes, heart attacks and end-stage renal disease, rather than cosmetic weight loss.
Dr. Mehmet Oz, who leads the Centers for Medicare and Medicaid Services, said the administration expects the deals to be budget neutral within two years because improved health and reduced use of other services will offset drug spending.
Additional pricing and access details
– The companies committed to discounted prices for uninsured consumers through the administration’s planned TrumpRx portal. Current injectable medicines will be available through TrumpRx at an average of about $350 per month up front (down from around $500 direct-to-consumer today), with a plan to reduce those prices to $245 over 24 months.
– Eli Lilly said it will cut $50 from its direct-to-consumer price for Zepbound, setting the starting-dose price at $299 per month and higher doses at $449 per month.
– Both firms agreed to offer starting doses of upcoming oral obesity pills — pending FDA approval — at $149 per month for people on Medicare, Medicaid and via TrumpRx. Eli Lilly also said it applied for an FDA review voucher that could accelerate approval.
Broader concessions and incentives
In exchange for the pricing commitments, Novo Nordisk and Eli Lilly will receive a three-year exemption from certain tariffs. The agreements also mirror terms in earlier deals with Pfizer and AstraZeneca, and include commitments to launch new drugs in the U.S. at prices comparable to other developed nations and to offer discounts for uninsured buyers.
Reaction and context
Medical leaders welcomed the move as a potential step forward in combating chronic disease. Dr. Bobby Mukkamala, president of the American Medical Association, called reducing costs and using Medicare and Medicaid scale to expand access a “transformative step” against obesity and chronic illness. Health economists noted manufacturers likely support such deals both for political reasons and because broader access expands their patient base.
These announcements follow a May executive order and letters to 17 drugmakers urging voluntary price reductions. The administration launched the TrumpRx initiative publicly in late September with a first deal with Pfizer and subsequently reached agreements with AstraZeneca and EMD Serono (the latter covering fertility drugs only).
The TrumpRx website is expected to go live in 2026; it will direct consumers to manufacturers’ direct-to-consumer sites to fill orders. Officials said the new pricing arrangements will phase in over the coming months and up to two years for some products.