On November 6, President Trump declared that the producers of popular weight-loss medications have consented to lower the costs for American consumers.

This declaration comes after Trump’s directive from May, when he instructed pharmaceutical firms to tackle the issue of their drugs being more expensive in the U.S. compared to other countries, and to ensure Americans pay the lowest global price.

Under the agreement, Eli Lilly and Novo Nordisk committed to decreasing the price of their injectable GLP-1-based medications to $350 for a one-month supply, with a further reduction to $245 planned over the subsequent two years. Presently, a month’s supply of these drugs costs around $1,000, or approximately half that figure if purchased directly from the companies via recently introduced direct-to-consumer schemes. This pricing structure will apply to an upcoming iteration of Lilly’s weight-loss drug, Zepbound, which may be supplied in a single, multi-dose pen; currently, it is dispensed in vials with varying doses as patients gradually increase their intake. Both pharmaceutical firms also possess an oral GLP-1 based pill for weight management; Novo Nordisk’s version is presently under review by the U.S. Food and Drug Administration (FDA), while Lilly intends to submit its product for approval before year-end. Should they gain approval, these pills would be priced at $149 for a monthly supply. Furthermore, the FDA stated that , is part of a program where certain drugs would be granted priority vouchers, entitling them to significantly shorter review periods for approval, typically weeks or months instead of a year or longer.

These stated prices represent the out-of-pocket expenses for individuals obtaining the medications without insurance and through government channels, utilizing taxpayer money. With these prices now being transparent and accessible to patients, commercial insurers and employer-sponsored insurance plans are anticipated to adopt similar practices and provide coverage for the drugs at the lowered rates. During a company press conference on November 6, Lilly CEO David Ricks mentioned that roughly six out of ten employers currently cover the company’s weight-loss drug for their employees, and expressed optimism that today’s announcement would serve as a “triggering” event to encourage broader coverage.

This decision marks the initial move towards achieving equitable drug pricing, ensuring Americans no longer pay higher amounts for identical medications compared to individuals globally. This disparity stems from an intricate drug-payment system involving pharmacy benefit managers, who oversee prescription drug benefits for insurers and employers and have leveraged their substantial purchasing power to inflate drug costs. Dr. Dan Skovronsky, Lilly’s chief scientific officer, informed TIME, “Our expectation is that by making prices transparent and through government coverage of them in Medicare, it will make it increasingly uncomfortable for employers or pharmacy benefit managers who have chosen not to cover this important class of medicines.” He added, “I think the scale and effectiveness that a small molecule like orforglipron can achieve at a $149 per month price point will change the lives of many Americans.”

The duration of the agreement’s terms is not immediately apparent. This deal mandates pharmaceutical companies to lower prices for both cash-paying customers and government programs, encompassing not only weight-loss medications but also a range of other products. Additionally, it requires them to introduce specific new products to the American market at “most-favored nation status” pricing, which means the lowest global selling price for their drugs. In return, the government commits to offering priority vouchers from the FDA for expedited review and potential approval of a chosen selection of new products.

For those covered by Medicare, the arrangement with Lilly and Novo Nordisk broadens coverage to include obesity, in addition to diabetes—potentially extending benefits to roughly an extra 10% of Medicare recipients. Medicare would begin covering these drugs at $245 monthly for both diabetes and obesity; at present, Medicare covers these medications for diabetes treatment but not for obesity. Beneficiaries would only be liable for a $50 monthly copayment. 

Senior White House officials affirmed that the broadened coverage would not impose costs on taxpayers, as the revised expenditure for the Centers for Medicare and Medicaid Services reflects savings from the diabetes indication; these savings will finance the obesity coverage. The new pricing is anticipated to be implemented in spring or mid-2026.

High-ranking officials indicated that Medicare beneficiaries seeking GLP-1 drug coverage for obesity must satisfy stringent eligibility requirements, which would align with Make America Healthier Again principles aimed at tackling chronic disease risk factors. For instance, the drugs would be covered for individuals with a body mass index (BMI) of 27 or higher if they also present other metabolic risk factors, like prediabetes, given that these medications could reduce their susceptibility to developing diabetes, stroke, heart attack, or peripheral artery disease.

Individuals with a BMI exceeding 30 would qualify for drug coverage if they also suffer from severe kidney disease, heart failure, or uncontrolled high blood pressure. For those lacking any of these conditions, Medicare would provide obesity drug coverage if their BMI is 35 or higher.

Medicaid recipients will also benefit from decreased prices, though the implementation timeline will vary by state.