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Novo Nordisk and Eli Lilly Can Sell Their Weight-Loss Drugs to Medicare Market

Nov 06, 2025 13:34:00 -0500 by Josh Nathan-Kazis | #Biotech and Pharma

President Donald Trump announced the weight-loss drug agreement in the Oval Office on Thursday. (Andrew Harnik/Getty Images)

Key Points

The Trump administration on Thursday announced a new agreement with Novo Nordisk and Eli Lilly that would allow Medicare for the first time to pay for weight-loss medicines, potentially unlocking a major new market for the mega-blockbusters Wegovy and Zepbound.

In return, Novo and Lilly agreed to offer lower prices in the U.S. for the two drugs for patients who choose to pay cash. Both companies also cut the prices they charge Medicare and Medicaid plans for both drugs, according to the White House.

The deals will not change the prices of the medicines for the roughly half of Americans who receive their health insurance through their employer, unless they choose to pay cash for the weight loss drugs.

“The scope of the agreement does not include pricing obligations in the commercial channel,” Lilly said in a statement.

Novo shares were down 3.1% on Thursday, while Lilly was up 0.6%. In a statement, Novo said that it expects the deal to drag on global sales growth next year.

“Novo Nordisk currently expects an estimated direct, negative low single-digit impact on global sales growth in 2026,” the company said in a statement.

Lilly did not forecast any such hit to its revenue in a separate statement.

Both companies said that, as a result of the deals, they would be exempted from tariffs for three years. The White House has been threatening sector-specific drug tariffs for months, and has been using the threat to bring drugmakers to the table.

The changes for cash-paying patients are likely the least significant part of the agreement, and are only relevant to patients who don’t use insurance to pay for the medicines. What’s more, they are only marginally below the cash prices that were already available to patients through each company’s in-house telehealth storefronts for cash paying patients.

The White House said Novo’s Wegovy will cost $350 through TrumpRx, the new government-run website the administration will launch for patients paying cash**.** Novo currently charges $500 a month to cash paying patients.

Lilly said the lowest dose of Zepbound will be available for cash-paying patients at $299 a month, while higher doses will cost $449. Today, Lilly sells most dose presentations through the company’s direct-to-consumer storefront for $500 a month to cash-paying customers. Lilly sells the lowest dose version of Zepbound to cash-paying customers for $350 a month.

Cash prices “will trend down” to $245 a month over the next 24 months, said deputy Centers for Medicare and Medicaid Services administrator Chris Klomp.

One wrinkle for investors is the unanticipated inclusion in the deal of Lilly’s weight loss pill orforglipron and Novo’s pill version of Wegovy, both of which could launch next year and are not yet FDA approved. Starting doses of both pills will cost $149 a month for cash-paying customers, Klomp said.

Lilly said that orforglipron will cost $149 for cash-paying patients at the lowest dose, with higher doses costing $399.

The change in Medicare policy, meanwhile, appears to be the most significant aspect of the agreement. While Medicare covers GLP-1 drugs for certain indications, federal law currently bars the program from paying for weight loss drugs, based on ideas current at the time the law was passed that obesity is a lifestyle choice rather than a medical condition.

Now, Novo and Lilly will charge Medicare $245 a month for Ozempic, Wegovy, Mounjaro, and Zepbound. Klomp said that the Medicare program will use the savings from the price cuts to Ozempic and Mounjaro, which are prescribed to treat Type 2 diabetes, “in a cost-neutral way to fund the new indications.”

That framework seems designed to sneak around the legal barriers to Medicare paying for weight loss drugs.

The new $245 a month price will also be offered to state Medicaid plans.

The question is what this means for drugmakers’ bottom lines, and whether the increased volume will make up for the lower Medicare prices.

Eli Lilly CEO David Ricks and Novo CEO Mike Doustdar stood behind President Donald Trump during the White House press conference announcing the deal. Trump referred to Ricks as “a friend of mine,” and asked Commerce Secretary Howard Lutnick if he takes GLP-1 drugs. Lutnick said no.

Trump has long fixated on the price of the new weight loss medicines, telling reporters last month that their prices would drop to “about $150.”

Lilly reported last month that sales of Zepbound were $3.6 billion in the third quarter, up from $1.3 billion from the same quarter last year. Novo said yesterday that Wegovy sales were $3.1 billion in the quarter, up from $2.5 billion in the same quarter last year. Novo trimmed its full-year guidance, saying that growth rates were slowing for Wegovy and Ozempic.

“After some years of hyper growth, then we’ve seen deceleration of growth rates for the company,” Novo CFO Karsten Munk Knudsen told Barron’s. “It’s really a function of our growth expectations for our GLP-1 franchise in diabetes and obesity. And based on that runway, we expect continued deceleration into the fourth quarter.”

Earlier on Thursday, Lilly said that an experimental obesity drug eloralintide, which works differently from Wegovy and Zepbound, had worked well in a Phase 2 trial, with average weight loss between 9.5% and 20.1%, depending on dosage level. “The emergence of eloralintide underscores the depth of LLY’s portfolio and provides it compelling optionality,” Cantor analyst Carter Gould wrote on Thursday.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com