GLP-1s and Medicaid: Navigating Coverage Changes and Cost Controls

The landscape of GLP-1 (glucagon-like peptide-1) medication access is rapidly evolving, particularly for individuals enrolled in Medicaid. Recent initiatives from the Trump administration aim to lower costs and expand coverage of these drugs, used for both weight loss and diabetes management, while simultaneously addressing concerns about rising prescription drug spending within the Medicaid program. This article provides an overview of these changes, their potential impact, and what Medicaid beneficiaries require to know.

Recent Federal Initiatives and Agreements

The Trump administration has announced a multi-pronged approach to address GLP-1 costs, involving agreements with manufacturers Eli Lilly and Novo Nordisk. These agreements aim to lower prices for Medicare and Medicaid beneficiaries and offer discounted rates to cash-paying individuals through the newly launched TrumpRx.gov website, operational as of January 2026.

Key Components of the Deal

• Medicare and Medicaid Pricing: Injectable GLP-1 medications from Eli Lilly and Novo Nordisk will be available for $245 per month for both weight loss and diabetes treatment. Medicare beneficiaries will have a $50 copay, while Medicaid beneficiaries will have no copay or very limited out-of-pocket costs.
• Oral Medications: If approved by the FDA, oral pill versions of GLP-1 medications will be offered at their lowest doses for $149 per month.
• Latest Payment Models: The Centers for Medicare & Medicaid Services (CMS) has introduced two new models – GENEROUS and BALANCE – to further reduce drug prices through supplemental rebates and standardized coverage criteria. BALANCE specifically focuses on expanding access to obesity drugs in Medicaid, and Medicare.
• “Most Favored Nation” (MFN) Pricing: Agreements are in place to provide MFN pricing in Medicaid, aligning U.S. Drug prices with those in other comparable nations.

Impact on Medicaid Coverage

Currently, Medicaid already covers GLP-1s for individuals with diabetes and those at risk of cardiovascular complications, based on income and resource qualifications. The new initiatives aim to expand coverage to include patients with obesity who are considered to be at high metabolic or cardiovascular risk.

While the deals are intended to reduce out-of-pocket costs for Medicaid beneficiaries, potential funding cuts to Medicaid, as outlined in the 2025 reconciliation law, could impact overall access to these medications. Loss of Medicaid coverage could make prescriptions unaffordable for low-income individuals, even with the discounts offered through TrumpRx.gov.

Trends in Medicaid Prescription Drug Spending

Net spending on Medicaid prescription drugs (after rebates) has significantly increased in recent years, rising from $31 billion in fiscal year (FY) 2019 to $46 billion in FY 2024 – a 46% increase. However, net spending decreased by 10% from FY 2023 to FY 2024 due to increased rebates. Spending per prescription also rose by 42% (from $43 to $61) and spending per enrollee increased by 25% (from $481 to $603) over the same period.

Rebates play a crucial role in reducing Medicaid drug costs, offsetting over half of gross spending. State supplemental rebates are becoming an increasingly important component of these savings. While spending has increased, prescription volume has only slightly increased (2%), indicating that higher drug prices, particularly for specialty drugs like GLP-1s and cell/gene therapies, are driving the overall cost increases.

Looking Ahead

Recent quarterly data indicates a decline in both Medicaid enrollment and the number of prescriptions filled, while gross spending remains elevated. The full impact of the new federal initiatives and the 2025 reconciliation law on future Medicaid prescription drug trends remains to be seen. CMS will release further details on participation in the BALANCE and GENEROUS models in early 2026, with BALANCE launching as early as May 2026 and a short-term GLP-1 payment model launching in July 2026.

These changes represent a significant shift in the approach to GLP-1 access and affordability. Ongoing monitoring of enrollment trends, prescription volume, and spending data will be essential to assess the effectiveness of these initiatives and ensure equitable access to these potentially life-changing medications for Medicaid beneficiaries.