Combating Obesity: Trump’s Pharmaceutical Agreement Cuts Costs for Millions
- Trump administration secures $350-$149/month price cuts for GLP-1 drugs via TrumpRx.gov, expanding Medicare/Medicaid coverage to 40% of obese Americans. - Lilly and Novo Nordisk commit to aligning U.S. pricing with global benchmarks under MFN framework, part of broader cost-control measures including FDA incentives. - Policy faces $35B annual deficit risks from high demand, while pharma firms gain tariff certainty and access to 60M+ beneficiaries previously excluded. - Market reacts cautiously as Novo sh
President Donald Trump has announced a major deal with leading pharmaceutical companies
The administration highlighted that the deal requires
The financial impact of this policy is considerable. While the administration has pointed to patient savings, some critics caution that the broader coverage could add $35 billion per year to the national deficit due to the high demand for GLP-1 drugs, Fortune reported. CMS Administrator Mehmet Oz mentioned ongoing talks in October, highlighting the challenge of keeping treatments affordable while maintaining fiscal responsibility. At the same time, pharmaceutical firms gained certain assurances, such as stable tariffs and broader access for patients with obesity—a group that Medicare had previously not covered, according to Morningstar.
The agreements also cover additional medications beyond GLP-1 drugs. Lilly’s Zepbound and Novo’s oral Wegovy will be available for $346 and $150 per month, respectively, and insulin products will be priced at $35 per month through TrumpRx, as reported by Investors Business Daily. The companies are also investing further in U.S. manufacturing, with Lilly committing $27 billion and Novo $10 billion, according to Yahoo Finance. The market response was mixed: Novo Nordisk’s stock dropped by 3.5%, while Lilly’s saw a slight decline, reflecting investor uncertainty amid increased regulatory scrutiny, Investors Business Daily reported.
This policy change addresses a significant public health issue, as the CDC reports that 40% of American adults are obese, according to Investors Business Daily. By including weight-loss medications in Medicare, the Trump administration seeks to tackle chronic illnesses associated with obesity, such as diabetes and heart disease, while also working to lower prescription costs. However, the long-term effectiveness of this approach will depend on controlling Medicare expenses and ensuring all eligible patients have fair access, Axios reported.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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