Millions more Americans could access obesity drugs after Trump's deals with Eli Lilly, Novo Nordisk

President Donald Trump has brokered landmark deals with Eli Lilly and Novo Nordisk, significantly expanding access to GLP-1 obesity drugs. Under these agreements, Medicare will begin covering GLP-1s for eligible patients starting mid-2026, a move expected to open access to 40 million new beneficiaries and pressure private insurers to broaden their coverage. The drugmakers also committed to lowering prices for state Medicaid programs and offering substantial direct-to-consumer discounts via TrumpRx.gov, with monthly costs for injectables dropping to $250 and new pills to $149, signaling a major market expansion for these high-demand treatments.

Analysis

The Trump administration has secured landmark deals with Eli Lilly (LLY) and Novo Nordisk (NVO) to significantly expand access to GLP-1 obesity drugs. Medicare will begin covering GLP-1s for eligible patients starting mid-2026, potentially adding 40 million new beneficiaries. This initiative is expected to pressure private insurers to broaden their coverage, substantially expanding the market for these high-demand treatments.

Under the agreements, Eli Lilly and Novo Nordisk will cut prices for Medicare and Medicaid to $245 per month, with Medicare patients paying a $50 copay. Direct-to-consumer offerings via TrumpRx.gov will also provide substantial discounts, with injectable GLP-1s dropping to $250 monthly and new oral medications to $149. These measures aim to address current limited insurance coverage and high list prices, historically restricting patient access.

Eligibility criteria for Medicare coverage include patients with a BMI of 27+ with prediabetes/cardiovascular disease, or BMI of 30+ with related conditions, or severe obesity (BMI 35+). JPMorgan analyst Chris Schott estimates these criteria could cover 80% of the obese Medicare population. A pilot program will launch in 2026 under a temporary legal mechanism, transitioning to a mandatory CMMI pilot in 2027, ensuring broad coverage despite a 2018 law prohibiting Medicare from covering weight loss drugs.

The deals are anticipated to exert pressure on commercial insurers to expand their GLP-1 coverage, despite current sparse uptake. While state Medicaid programs will benefit from lower prices, budgetary constraints remain a concern for broader state-level adoption. The long-term sustainability and full legislative backing for Medicare coverage beyond the pilot remain key considerations for sustained market growth.

Key Decisions for Investors

• Monitor the implementation of Medicare's GLP-1 coverage starting mid-2026 and the transition to mandatory CMMI pilot in 2027, as this represents a significant market expansion for LLY and NVO.
• Assess the potential for increased commercial insurer coverage, as Medicare's move is expected to pressure private plans, leading to further market growth for GLP-1 manufacturers.
• Evaluate the impact of reduced pricing for Medicaid and direct-to-consumer channels on overall revenue growth and market share for Eli Lilly and Novo Nordisk, considering state budgetary constraints for Medicaid adoption.
• Watch for legislative developments regarding the 2018 law prohibiting Medicare from covering weight loss drugs, as permanent legislative changes would solidify long-term coverage.