President Donald Trump on Thursday announced agreements with Eli Lilly and Co. ( LLY ) and Novo Nordisk A/S ( NVO ) to significantly reduce prices for their GLP-1-based obesity and diabetes drugs.

The deals will also expand Medicare and Medicaid coverage for these high-demand treatments beginning in mid-2026.

In September, Trump announced the first agreement with a major pharmaceutical company, Pfizer Inc. ( PFE ) , to bring American drug prices in line with the lowest paid by other developed nations. The iniative is known as the most-favored-nation, or MFN, price.

In October, AstraZeneca Plc ( AZN ) inked a new agreement designed to reduce prescription drug costs for Americans.

CNBC reports that the companies will provide their GLP-1 medications — including Novo Nordisk's ( NVO ) Wegovy and Eli Lilly's ( LLY ) Zepbound — to Medicare and Medicaid for $245 per month.

Medicare patients will pay a $50 copay for approved injectable and oral GLP-1 drugs. This marks the first time the federal program will cover obesity treatments.

Starting doses of existing injectables like Wegovy and Zepbound will initially cost $350 a month on TrumpRx, declining to $245 within two years. Upcoming oral versions — Novo Nordisk's ( NVO ) oral Wegovy and Lilly's orforglipron — are expected to be priced at $145 a month through Medicare, Medicaid, or TrumpRx once approved.

Trump’s TrumpRx website intends to sell drugs directly to patients at cheaper prices without involving insurance.

Also Read: Bill Gates And PAHO Push To Make Weight-Loss Drugs Accessible In Low-Income Nations

A senior administration official told CNBC that the initiative will begin as a Medicare Part D pilot program, covering a majority of beneficiaries. About 10% of Medicare enrollees, or roughly 6.6 million people, are expected to qualify for GLP-1 coverage targeting obesity, diabetes, and cardiovascular conditions.

Eligibility will focus on those with obesity or related health risks, including prediabetes, heart disease, or kidney complications.

In return, Eli Lilly ( LLY ) will receive relief from potential new tariffs. It will also be exempt from additional drug pricing programs under the Trump administration.

According to the Wall Street Journal, both Lilly and Novo Nordisk ( NVO ) will also obtain FDA vouchers to accelerate approvals of obesity drugs.

Separately, Eli Lilly ( LLY ) announced additional price cuts on its LillyDirect platform, reducing Zepbound's price by $50 to $299 per month for the lowest dose, while higher doses will range up to $449.

Once approved, Lilly's obesity pill will launch at $149 per month for the lowest dose.

On Thursday, Eli Lilly ( LLY ) shared data from a Phase 2 trial of eloralintide in 263 adults with obesity or overweight with at least one obesity-related comorbidity and without type 2 diabetes.

At 48 weeks, all treatment arms of eloralintide met the primary endpoint. The study demonstrated superior mean weight reductions from 9.5% to 20.1% compared to 0.4% with placebo.

Lilly plans to initiate Phase 3 studies of eloralintide as a monotherapy for the treatment of obesity by year-end. The company is also evaluating its use as a complementary treatment to incretin therapy.

Price Action: Eli Lilly ( LLY ) stock is up 0.7% at $932.30. Novo Nordisk ( NVO ) stock is down 2.81% at $47.10 at the last check on Thursday.

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