The Many Tradeoffs of Trump’s ‘Fat Shot’ Deal
Earlier this month, President Donald Trump announced deals with drugmakers to reduce prices and expand access to GLP-1 weight-loss drugs like Ozempic, Zepbound, and Wegovy. Originally developed to help diabetics manage their blood sugar, the drugs mimic the natural hormone glucagone-like-peptide-1 (GLP-1). GLP-1s trigger the pancreas to release insulin at times of high blood-sugar levels, prevent the release of the blood-sugar-raising hormone glucagon, reduce appetite, and slow the movement of food through the body to promote feelings of fullness. Since GLP-1s became commonplace, the U.S. obesity rate has dropped from 39.9% to 37%.
The deal will apply to both injectable GLP-1 drugs and newer oral pills that are still pending approval by the U.S. Food and Drug Administration (FDA), which the administration promises to expedite. Drugmakers will offer injectable GLP-1s direct-to-consumer through the TrumpRx online portal at $350 a month, which the administration says will fall to a $250 monthly charge over time. They will be available to Medicare beneficiaries at a $50 co-pay, and to Medicaid beneficiaries for even less. If approved by the FDA, oral GLP-1 pills will be available for $149 a month. The deals are part of Trump’s “Most Favored Nation” (MFN) executive order, which threatens drugmakers that don’t lower their prices with massive tariffs, fines, and other penalties.
Prominent GLP-1 drugs are currently listed at retail prices of more than $1,000 a month, many times what they cost abroad. But few Americans pay this price since, it’s a starting point for negotiations with health plans. Relatively few plans cover the drugs for weight-loss purposes, but those that do acquire them for much less than $1,000. Surveys indicate an growing number of employers are offering plans that do offer coverage.
Since Medicaid acquires drugs for the lowest private-market price, and since they’re sold to Medicare Part B at the average private-market price, the government pays similar costs to private insurers. Though the deal won’t impact acquisition costs for private health plans directly, it is expected to give plans leverage to demand the same or similar prices to those offered to the government. For covered patients on private insurance, Zepbound is currently available for as little as a $25 monthly copay. Patients paying entirely out-of-pocket can currently buy GLP-1s for around $350-$500 a month, meaning the deal could save these patients up to $200 a month.
There’s much to love about making it cheaper to trim our love handles. But the deal comes with limitations and tradeoffs that we should consider before taking the whole cake (or, in this case, putting it down).