Unpacking recent federal actions on GLP-1s

On November 6, the White House unveiled its plan for GLP-1 medications. The plan relies on 3 major components to lower GLP-1 prices: 

• Work through the Centers for Medicare & Medicaid Services (CMS) to reinterpret the statutory exclusion of agents for weight loss to allow Medicare Part D coverage of anti-obesity medications for the first time. 
• Lower costs by requiring manufacturers to provide an MFN-based supplemental rebate in addition to the standard Medicaid Drug Rebate Program (MDRP).
• Give patients access to discounted prices via the new direct-to-consumer platform, TrumpRx. 

The recent announcements were made possible due to agreements reached with pharmaceutical manufacturers Eli Lilly and Company and Novo Nordisk, makers of the popular GLP-1 medications.

These deals appear distinct from an existing CMS initiative to lower drug prices, the Medicare Drug Price Negotiation Program, which directly negotiates with manufacturers. Under this program CMS negotiates a Maximum Fair Price (MFP) for certain high expenditure, single source drugs. Beginning in 2027, popular GLP-1 medications, Ozempic®, Rybelsus®, and Wegovy®, will become MFP drugs. MFP pricing on the drugs was announced by CMS in November 2025.

Details on many key aspects of the plan are still undetermined or forthcoming. These include:

Timing

Implementation of Medicare Part D coverage for GLP-1s (for obesity) is expected to begin as a pilot via the Center for Medicare and Medicaid Innovation (CMMI). The timeline for CMS guidance and program launch is still uncertain, and different scenarios may emerge according to when the program begins. 

• If the CMMI demonstration project commences as early as April 1, 2026, the cost of expanded GLP-1 coverage was not built into the 2026 bidding process. There will need to be an adjustment to account for additional costs. 
• If the CMMI demonstration project is delayed until January 1, 2027, Part D plan sponsors can adjust bids for the 2027 plan year to accommodate the cost of these treatments. With a CMMI demonstration project, the net cost of the drugs will be $245. This is in comparison to the 2027 MFP pricing for Ozempic, Rybelsus, and Wegovy of $274.

Eligibility and clinical criteria

Weight loss GLP-1 drugs are subject to clinical criteria for prescribing, for example, meeting a certain body mass index (BMI). Certain comorbid conditions including heart and kidney disease are also part of the clinical criteria for approval. As many as 26 million Medicare beneficiaries could become eligible based on current criteria.

• If eligibility is consistent with package labeling, the largest population of possible new users will fall within the BMIs of 27 and 35 for the Medicare population. However, the uptake is generally expected to be greater for members with higher BMIs.
• In contrast, if the requirements are made stricter than the current label it will temper the impact of adding these drugs.

Potential statutory changes

The announced agreements could increase access to GLP-1 treatments with discount prices for Medicare beneficiaries and through TrumpRx. However, long-term Medicare coverage of GLP-1s for obesity may face legal and fiscal barriers. For example, legislative action may be required to overturn the existing Medicare exclusion for obesity drugs.

Participation

The 10 largest plans currently account for 80% of Medicare Advantage membership. It remains unclear whether plan participation will be voluntary or mandatory for Part D plan sponsors.

• If participation is voluntary, plans need to consider whether they would benefit from the new pricing. Competition may drive the need to join but will not influence the 2026 enrollment period. Plans also need to consider where the drugs will be placed on their formulary.
• If mandatory, one unresolved question is whether plan sponsors will retain flexibility to use formulary placement and rebate negotiations to prefer certain products.

Dosage and pricing

GLP-1 drugs are indicated for a range of conditions and come in various dosages and price points. CMS has not yet indicated if the announced pricing is for all doses or limited to specific doses such as those used for short periods of time early in therapy for titration.

• If the deal covers all non-diabetic GLP-1 prescriptions, it will apply to the broadest population of utilizers. Therefore, it can be expected to produce maximum savings opportunities associated with reduced pricing.
• If the new discounted price applies only to select doses it would lessen overall savings for plan sponsors as the discounts would apply to a limited subset of utilizers.

Administration

Another unknown is whether the program will be administered like the existing Medicare Drug Price Negotiation Program (MFP) or by some other mechanism. 

• If MFP consider this: In general, discounting the cost and removing the rebates for a given drug does not lead to as large of savings as expected for current users, because members will not reach the catastrophic phase as quickly, resulting in a decrease in reinsurance with a possible increase to plan cost. However, there is always variation based on the specifics of your member population. 
• If the administration does opt for an alternative to MFP, the alternative may be using list price with a rebate. Members would hit the catastrophic phase as quickly as the current year. Such an alternative mechanism would affect the Manufacturer Discount Program, reinsurance, and rebate taxes.

For commercial employer-sponsored plans, immediate changes are unlikely given existing contractual agreements in place for 2026. However, federal actions may set important precedents for pricing for obesity treatment, influencing future clinical guidelines and consumer expectations. Optum Rx is monitoring these developments closely to help plan sponsors anticipate potential downstream effects. 

In addition, these moves may alter future cost dynamics for GLP-1s, including pricing negotiations in commercial contracts. The steep discounts announced by the White House highlight longstanding price disparities in the US market compared with other countries. 

The announcements also validate the role of Optum Rx as a valuable counterweight to the substantial pricing power of drug manufacturers. While Novo Nordisk and Eli Lilly ultimately decide what list (WAC) prices they set for their medicines, Optum Rx’s Industry Relations team remains committed to negotiating with manufacturers, including Novo and Lilly, to obtain the lowest possible net cost for plan sponsors. Notably, Novo Nordisk’s agreement to provide access to insulin products NovoLog and Tresiba at $35 monthly when purchased through TrumpRx reflects results from an existing Optum Rx initiative limiting out-of-pocket spend to $35 for preferred insulin products on commercial formularies enacted back in 2024.

Optum Rx regularly meets with policymakers, legislators and regulators to discuss policies with the potential to impact pharmacy benefits.

Optum Rx senior leaders have been engaged in conversations with CMS and CMMI. We are providing direct input as the Trump Administration develops programs related to Medicare and Medicaid coverage of GLP-1s for obesity. We also provide input via our trade association, the Pharmaceutical Care Management Association (PCMA).

Optum Rx already offers a suite of strategies to help payers manage GLP-1 costs, including: 

• Competitive pricing aligned with direct-to-consumer programs.
• Clinical programs and member support to optimize outcomes and reduce waste. 
• The Weight Engage solution, providing education and behavioral support for members using GLP-1 therapies. We are committed to providing timely updates on this topic and will provide updates and strategic guidance as new information becomes available. If you have any questions or would like to discuss this in greater depth, please reach out to your Optum Rx representative.