Trump announces lower GLP-1 prices. Will employer plans see them too?
Any development concerning GLP-1 medications – the exceedingly popular drugs used to treat diabetes, obesity, heart disease and other conditions – will generate headlines, and last week’s White House announcement was no exception. In a nutshell, the administration has signed agreements with pharmaceutical manufacturers Eli Lilly and Novo Nordisk that establish reduced pricing for a range of GLP-1 medications when purchased by Medicare and Medicaid and via TrumpRx, the Direct-To-Consumer prescription drug program set to go live early in 2026.
While the agreements do not address prices charged to employer health plan sponsors and covered plan members, as drug manufacturers have begun making GLP-1 medications available well below list price through their own direct-to-consumer programs, the major PBMs say they have generally been able to negotiate discounts and rebates for group health plans that effectively bring net costs for these drugs close to DTC costs. If this pattern holds true with the new round of price cuts, employer plan sponsors and members will eventually benefit.
The agreements include pricing for yet-to-be-approved oral GLP medications as well. The administration also announced that it would expedite approvals of these much-anticipated, less-expensive GLP-1 medications.
Medicare deal is major news
Under the new agreements, Medicare and state Medicaid program prices of Ozempic, Wegovy, Zepbound, and Mounjaro (for diabetes) will be $245/month, according to the White House. Previously, Medicare did not cover Wegovy and Zepbound.
For the first time, coverage for weight-loss medications will be available to Medicare beneficiaries with obesity who don’t also have related health conditions such as diabetes or cardiovascular issues. While Medicare currently is prohibited by statute from covering weight-loss-only medications, the Center for Medicare and Medicaid Innovation has the authority to design and test new payment models that lower program spending while maintaining or improving the quality of care. Under the CMMI demo, as Medicare reduces the prices it pays to Eli Lilly and Novo Nordisk for GLP-1s to treat diabetes, cardiovascular disease, and possible future indications, it can use the savings to pay for the expansion of coverage for GLP-1 drugs solely for weight loss.
Medicare beneficiaries will have a $50 monthly copay for the newly covered obesity indications, which will presumably apply towards the Part D $2,100 (in 2026) annual out-of-pocket maximum. While the timing is not settled yet, this coverage is expected to be in place by 2027.
As for Medicaid, the deals announced last week will also allow states to cover weight loss medications at the negotiated prices. While some states already cover these medications, most don’t because of the cost and large number of Medicaid recipients who would qualify for them. While the price discounts make coverage more affordable, state Medicaid budgets are already under pressure, and it seems unlikely that many will choose to add this coverage now.
How much lower will DTC prices go?
DTC prices have dropped significantly over the past couple of years in response to greater competition, including from compound versions of the drugs. Lilly and Novo both offer DTC websites where people can purchase their popular GLP-1 medications. The White House fact sheet says that the “average price” of GLP-1 injectables and orals will start at $350/month on TrumpRx and trend down to $245/month over the next 24 months.
Using an average price across different manufacturers and doses makes it tricky to estimate actual savings over current DTC prices, which can range significantly from the low “starter” dose to the higher maintenance doses. Lilly announced that it will offer the lowest dose of Zepbound for $299 a month for DTC patients, with higher doses up to $449 per month. Currently, these prices are $349 and $499, respectively. The new prices available via TrumpRx (and presumably LillyDirect as well) would represent a savings of about $50/month, or $600/year, over current DTC prices.
Implications for employers
Each year for the past three years, Mercer’s National Survey of Employer-Sponsored Health Plans has found more large employers (500 or more employees) offering coverage for weight-loss medications, highlighting the importance they place on facilitating access to affordable medication to manage chronic conditions, including obesity. Employers and health plans increasingly recognize that reducing out-of-pocket costs for effective treatments improves adherence, health outcomes, and overall workforce productivity. In 2025, nearly half of all large employers cover GLP-1 medications approved for weight loss. Assuming Medicare will now cover GLP-1s solely for weight loss, the pressure for employers to provide this coverage may grow.
Despite the trend of the past few years, the current acceleration in health benefit cost growth – projected to be 6.7% next year – may have deterred employers from adding coverage for weight-loss medications for 2026. But if the lower DTC prices negotiated by the Trump administration “trickle down” to employer-sponsored health plans, adding or maintaining this coverage may become more feasible.
Another option for employers that don’t currently cover weight-loss medications in their health plans is to provide financial support to employees purchasing the medications through TrumpRx or other DTC platforms via a health reimbursement arrangement. As a lower-cost way for a plan sponsor to help employees access medications that are available DTC, this approach could make it feasible to offer a benefit for the first time or to continue some form of support. A drawback is that drugs purchased outside the pharmacy benefit will bypass important clinical monitoring that PBMs perform today (e.g., checking for drug-drug/drug-disease interactions). In addition, employers currently providing coverage through the pharmacy benefit would need to assess the impact on rebates.
As we’ve written, the GLP-1 market is evolving with incredible speed, and this recent development will doubtless prompt others. For now, employers considering adding coverage for GLP-1 weight loss medications may want to conduct a thorough financial analysis comparing the PBM model versus a DTC HRA – and be ready to adjust when the next development makes headlines.
