Medicare is getting closer to making peace with the price of obesity drugs, but not quite there yet. In November 2025, the White House struck a landmark "most favored nation" deal that slashed the cost of GLP-1 receptor agonist drugs—blockbuster medications like Ozempic, Wegovy, Mounjaro, and Zepbound—from over $1,000 per month to $245 per month for Medicare beneficiaries. It's a stunning reduction, but according to a new analysis from health economists at the University of Chicago published in JAMA Network Open, it still leaves Medicare spending an additional $18 billion over a decade even as these drugs transform lives.
The scale of what's at stake is immense. The research team modeled what would happen if Medicare expanded coverage to roughly 30 million current and future beneficiaries with obesity who don't yet have diabetes or cardiovascular disease—people currently ineligible for coverage. They projected that if about 30 percent of those newly eligible patients started therapy and 40 percent stayed on it long-term, Medicare would spend nearly $74 billion on GLP-1 drugs over 10 years. The good news: downstream health savings from prevented diabetes, heart disease, and related complications would total about $56 billion, dramatically narrowing what would have been a catastrophic budget gap.
"With a projected net effect of around $18 billion in additional Medicare spending over a decade, our model shows that GLP-1 drugs still don't 'pay for themselves' yet at the new price," said David Kim, the health economist who led the analysis. "But we see that the budget impact is much less severe than people have previously anticipated."
That context matters deeply. Earlier in 2025, Kim's group had published research showing that at the old prices, GLP-1 drugs would cost Medicare $66 billion while generating only $18 billion in health savings—a staggering $48 billion net cost. The MFN policy, which benchmarks U.S. drug prices against what wealthy countries actually pay, has fundamentally changed the math. The drugs now pencil out as far more reasonable, even if they don't yet achieve perfect cost neutrality.
The researchers built their model with sophistication, accounting for the reality that semaglutide, the active ingredient in several leading GLP-1RAs, is expected to lose patent protection around 2032, which could bring substantial price reductions. They also split their analysis into two phases—initial weight loss and long-term maintenance—and found something illuminating: most of the remaining cost burden sits in the maintenance phase, not the dramatic early weight-loss months.
That insight opens a door. Kim points out that smarter weight-maintenance strategies could tip the balance toward true cost neutrality. "That could mean alternative dosing schedules, transitioning to lower-cost drugs, or combining medications with intensive behavioral interventions and medical nutrition therapy," he said. In other words, the solution may not require lower drug prices alone, but rather a rethinking of how these medications are deployed over time, layered with proven behavioral and nutritional support.
The $245 monthly price represents a watershed moment for diabetes and obesity treatment in America. It's not perfect—not yet—but it's real progress, and it opens genuine room for innovation in how we sustain these benefits for millions of people over decades.