The Trump administration is preparing a pilot program that could allow some Americans on Medicare and Medicaid to access popular and costly weight-loss medications.
The plan, still in development, would permit state Medicaid programs and Medicare Part D plans to voluntarily cover GLP-1 drugs such as Novo Nordisk A/S’ (NYSE:NVO) Ozempic and Wegovy, and Eli Lilly And Co’s (NYSE:LLY) Mounjaro and Zepbound for weight management, according to internal documents reviewed by The Washington Post.
The pilot would also include Eli Lilly’s GLP-1 drug Orforglipron, pending its expected approval in 2026.
The initiative, set to launch in April 2026 for Medicaid and January 2027 for Medicare, would run through the Center for Medicare and Medicaid Innovation (CMMI).
This testing lab explores new payment models to improve care and reduce health care spending.
While Medicare covers these drugs mainly for Type 2 diabetes, some private insurers already approve them for weight loss.
The proposal comes after the Trump administration rejected a Biden-era plan to provide coverage of GLP-1 drugs for weight loss under Medicare and Medicaid.
Though not yet finalized, the Washington Post report on Friday added that the new pilot could move forward without requiring a formal public comment process.
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Covering these drugs is not without significant cost concerns. The Congressional Budget Office estimates Medicare could spend around $35 billion on GLP-1 coverage for obesity between 2026 and 2034. These medications typically cost $5,000 to $7,000 annually per patient.
Still, experts like David Rind, chief medical officer at the Institute for Clinical and Economic Review, argue the price is reasonable given the potential for substantial health improvements.
Some states are already moving ahead. Thirteen state Medicaid programs currently cover GLP-1s for obesity, despite looming worries about reduced federal Medicaid funding due to a recent tax law overhaul.
On Thursday, Trump issued a 60-day ultimatum to 17 major pharmaceutical companies, demanding that they lower drug prices in the U.S. or face severe consequences.
Trump urged drugmakers to offer all existing drugs to Medicaid patients at the lowest prices in other developed countries, adopt most-favored-nation pricing for all new drugs across Medicare, Medicaid and commercial payers, and push back against “foreign freeloading nations” in pricing negotiations.
Also, Ozempic may enter the realm of price negotiations between drug manufacturers and Medicare.
Ozempic is poised to become eligible for negotiations when the next batch of drugs is chosen in 2025, leading to price adjustments in 2027.
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