5 Fast Facts: GLP-1 Drugs on Health Care Costs

November 25, 2025

BY: Cameron Brown, HAP policy analyst

Earlier this month, the Trump administration made moves to address the rising cost of the popular GLP-1 drugs by negotiating deals with two of the largest manufacturers, Eli Lilly and Novo Nordisk.

These agreements are aimed at introducing more affordable options and potentially capping prices for these high-cost medications. The administration’s efforts are part of a broader push to reduce health care spending and alleviate the financial burden on private insurers and government-funded programs like Medicare and Medicaid. The effectiveness of these deals remains to be seen.

Here are Five Fast Facts on the pricing impact of GLP-1 drugs and recent developments to control the increasing cost of these popular medications:

1. GLP-1 medications are a significant contributor to rising prescription drug costs

GLP-1 agonists, such as Ozempic and Wegovy, are playing a significant role in the rising costs of prescription drugs in the U.S. These medications, commonly prescribed for Type 2 diabetes and obesity, have high list prices that can range from $800 to over $2,000 per month. As demand for these drugs increases, they are contributing heavily to both out-of-pocket costs for patients and escalating premiums for insurance plans, driving up the overall cost of care in the U.S.

2. A broadening scope for GLP-1 drugs increases their pricing impacts

Drug manufacturers have asked the FDA to approve GLP-1 medications for conditions beyond diabetes and weight management into a diverse array of cardiovascular, renal, neurological, and even gynecological applications—and the FDA has granted many of these approvals, with more on the way.

The increase in use cases, given present constraints, will continue to increase demand for these medications. Subsequently, GLP-1 agonists will constitute a larger proportion of the drug supply, increasing the impact of GLP-1 pricing changes more on general drug spending—especially for Medicare and Medicaid.

3. GLP-1 drug costs create knock-on reimbursement challenges for insurers

Insurers are feeling the financial strain of covering GLP-1 drugs due to their high prices and higher demand.

As the cost of these medications rises, health insurers are facing higher reimbursement obligations, which in turn can lead to increased premiums for consumers.

Some insurers are responding by limiting coverage or imposing stricter eligibility criteria for patients, which may hinder access for those without obesity or diabetes as their primary diagnoses, making it harder for some patients to get the medications they need.

4. Tertiary impacts of GLP-1 use may create long-term savings on drug spending

The CDC estimates the prevalence of obesity among American adults to be 40 percent. Obesity is one of the key drivers of chronic disease, increasing the risk of type 2 diabetes, hypertension, heart disease, strokes, and certain cancers, among other conditions.

While the upfront costs of GLP-1 drugs are undeniably high, studies suggest that these medications could lead to long-term savings by preventing expensive complications related to Type 2 diabetes and obesity, such as heart disease, kidney failure, and stroke.

5. The actual pricing impacts of recent White House deals remain to be seen

Some critics argue that these potential savings are not guaranteed and may not offset the immediate financial burden these drugs place on patients and providers. Questions remain about the implementation of the deal and the interplay between “most-favored nation” pricing and the Medicaid Drug Rebate Program.

As the debate continues, the question remains whether GLP-1 drugs will prove to be a wise investment or a costly trend in the future of health care. A fact sheet about the program with details about the timeline for negotiations is available online.