This week, the White House announced that an agreement had been reached with Eli Lilly and Novo Nordisk, which will "dramatically reduce the prices Americans pay for some of the world's most popular drugs." It's all part of an ongoing effort by the president to lower prescription drug costs for Americans – something he promised by signing an executive order back in May.
The four drugs that were highlighted in the agreement are Ozempic, Wegovy, Zepbound, and Orforglipron – also known as GLP-1s. These pharmaceuticals are wildly popular and effective for those dealing with obesity, diabetes, and heart disease. But the costs have been prohibitive, ranging from $1,000 to $1,350 per month. Under the terms of the deal, prices for all four of these drugs will fall to around $350 per month.
The agreement will affect Medicare in the following ways, according to the White House document:
The Medicare prices of Ozempic, Wegovy, Mounjaro, and Zepbound will be $245, less than half the prices proposed by the Biden Administration on such drugs.
Medicare beneficiaries will pay a co-pay of just $50 per month.
Tired of Footing the Bill
The dirty little not-so-secret involving homeland drug prices is that Americans have been footing the bill for other countries. As Trump's executive order states, "The United States has less than five percent of the world's population and yet funds around three quarters of global pharmaceutical profits. This egregious imbalance is orchestrated through a purposeful scheme in which drug manufacturers deeply discount their products to access foreign markets, and subsidize that decrease through enormously high prices in the United States." This is why Trump's EO provides for most-favored-nation prescription drug costs in the United States.
Meanwhile, Big Pharma is reaping the benefits with these new GLP-1s. Sales of Zepbound, for example, have totaled approximately $9 billion, according to Eli Lilly. These drugs aren't just for vanity's sake, as obesity most often brings with it a host of other health issues, some of which can be life-threatening.
This negotiation between the president and pharmaceutical manufacturers appears to be the second salvo in what is expected to be a coming avalanche of reduced drug costs; the first was with Pfizer and AstraZeneca. They agreed to lower prices on a variety of prescriptions for Medicaid recipients. Traditionally, Medicaid was developed to assist Americans who are at the lowest end of the economic spectrum.
The Trump administration has set up a website shell for the entire effort to reduce drug costs at Trumprx.gov. The home page of the site explains that Trumprx will not be selling pharmaceuticals but rather serve as a resource for people to find the drug they need at the lowest price.
Drug Costs Matter
According to the AARP, "Most adults 50 and older pay out-of-pocket for prescription drugs, with one-fifth having spent $1,000 or more on prescription drugs in the last year." Unfortunately, prescription drugs aren't optional expenditures, and as Americans grow older, the number of medications needed per person rises.
Should President Trump be able to continue making deals with Big Pharma, he will be heralded as a hero among seniors who are saddled with astronomical prices for medicines prescribed by their doctors.
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