Could Trump make a big weight loss drug deal?

President-elect Donald Trump prides himself on making deals. Here’s one for him: Keep Joe Biden’s promise to make Medicare pay for GLP-1 drugs like Ozempic and Wegovy for weight loss. But only if the drugmakers agree to immediately lower their prices substantially.

Such a move would be fraught on multiple levels for Trump and his Republican allies. But it presents the incoming president with a major political opportunity, as well as some significant challenges. And defaulting on the deal carries its own risks.

The backstory

While Medicare pays for the GLP-1 drugs for people with type 2 diabetes and some forms of heart disease, an old federal law prohibits it from paying for weight-loss drugs. But last November President Biden proposed new rules to have Medicare and Medicaid pay for these drugs. The change would only become permanent after Trump is inaugurated, putting the issue squarely in his lap.

In recent years, these drugs have done just that used effectively to help people lose weight and become extremely popular. But they are also very expensive. Ozempic costs over $900 per month. Zepbound can cost as much as $1,100 for four weekly doses. The list price for Wegovy is $1,300.

All drug manufacturers offer discounts for consumers. But not for Medicare. And there is plenty of room for negotiation. The KFF research group estimates this that in 2023 the list price for Ozempic was $936 in the US, but $147 in Canada and $83 in France.

And that’s where it gets interesting.

In 2022, under pressure from the Biden administration, the Democratic Congress allowed Medicare to negotiate prices with drug makers for the first time. But the authority was initially limited to just 10 expensive drugswith lower prices starting in 2026. Until 2030, a few medicines will still be subject to negotiations every year.

What happens next?

The next round may include drugs such as Ozempic and Wegovy with the active ingredient semaglutide. manufactured by Novo Nordisk. The government must announce before February 1 which medicines will be the subject of the next round of negotiations. But those prices wouldn’t drop until 2027.

And that is Trump’s opportunity. Imagine him telling the drug companies that he will approve Medicare and Medicaid payment for these weight-loss drugs, but only if they agree to lower their prices immediately.

Such a move could be broadly popular and given the way it would open up the market, drugmakers are likely to reach a deal. And Trump would open himself up to Democratic criticism if he doesn’t make Medicare and Medicaid pay for the drugs. But taking that step into trading for lower prices would hit several bumps.

GOP divisions

For starters, Trump himself has paid a lot of attention to the issue of government drug price negotiations. He supported the idea when he first ran for president in 2016. But once he was in power he never followed it. And he said little about the issue during his 2024 race.

Before the recent elections Republicans in Congress vowed to repeal the 2022 price negotiations billThat’s not surprising, since they were overwhelmingly opposed to it when it was debated. Project 2025, the conservative manifesto written by many key Trump allies, would also repeal the drug negotiation program.

Then there are the disagreements among Trump’s nominees for top administration jobs. His choice to head the Department of Health and Human Services, Robert F. Kennedy Jr. has sharply criticized anti-obesity drugsarguing that people should lose weight by eating healthier and exercising.

But Trump’s choice to lead the Centers for Medicare and Medicaid Services Dr. Mehmet Oz has actively promoted the drugs. At least in theory, Oz would work for Kennedy.

The fate of Medicare payments would also lead to Trump’s internal conflicts around the world over cutting federal spending. That’s what the Congressional Budget Office estimates that paying for these weight loss drugs at current prices could cost Medicare as much as $40 billion over the next decade. If the government convinces companies to lower the price, it would lower the cost per dose but boost demand. CBO estimates that nearly 70% of Medicare recipients are overweight or obese.

Trump’s choice

Some argue that expanding access to the drugs would save Medicare and Medicaid money in the long run, because reducing obesity could lower the costs of treating heart disease and other conditions. But so far, those cost savings have been largely illusory. CBO projects that improved health would reduce Medicare’s net cost of paying for the drugs by only about 10%.

And there are side effects of these medications and real questions about how long patients are willing to stick with it. The medications currently require self-injection, a practice that many find unpleasant. And some patients stop taking it once they reach a target weight, which can limit the long-term benefits.

It all leaves Trump with a fascinating choice: Does he let Medicare pay for obesity drugs at lower costs and expand access for many voters? Or is he concerned about long-term budget implications and appears to be embracing an idea from his predecessor? My bet: he’ll close the deal.