Most states decline Novo Nordisk Medicaid pricing deal as coverage shrinks

Novo Nordisk's most-favored-nation agreement with the US administration was meant to widen public coverage of weight-loss drugs and offset price cuts. Nine months after President Donald Trump promised that obese Americans on Medicaid would gain access to GLP-1 medications, most states are declining the arrangement, and Medicaid access to the drugs has shrunk rather than grown ^[2]. MedWatch reported on Sept. 11 that the deal could reach millions of patients on paper but is running into state-level resistance, with some states refusing to implement it ^[1].

Where the states stand

Only Indiana has publicly signed on with the administration ^[2]. Twenty-nine state Medicaid programs told POLITICO they will not participate, many citing costs and budget pressure; 14 states did not respond to requests for comment, and CMS declined to provide a list of participating states ^[2]. Seven states — Arizona, Georgia, Michigan, Montana, Ohio, Tennessee and Virginia — said they were still deciding ^[2]. States that opted out include Maine, New Mexico and Oklahoma, which cited budget constraints and concerns about the long-term financial sustainability of the model ^[2].

Under the model, states are offered $245 per monthly dose of Novo Nordisk's Wegovy (semaglutide), the company told POLITICO, with the actual cost to states likely lower once federal match rates and drugmaker rebates are counted ^[2]. Indiana has said it will pay $85.16 of that $245 monthly cost per person ^[2]. Participating states must adopt standardized coverage criteria, including a body-mass index of 35 or higher — for a person 5 feet 10 inches tall, that means weighing 244 pounds — and CMS must approve any variations or stricter limits ^[2].

Why it matters for patients

Whether a Medicaid enrollee can get a GLP-1 drug for obesity now depends heavily on which state they live in. States are required to cover the medications for conditions such as diabetes and heart disease, but coverage for weight loss alone is optional ^[2]. Twelve states currently cover the drugs for weight loss; over the past year, California, Massachusetts, New Hampshire, Pennsylvania and South Carolina ended that coverage, and Rhode Island will end it in October ^[2]. California's program stopped covering the drugs for weight loss at the start of this year after projecting costs would nearly quadruple to $800 million by 2028-29 ^[2].

In states that do not cover the drugs, Medicaid enrollees can pay out of pocket through the TrumpRx discount platform, where prices average around $350 a month — still unaffordable for most low-income Americans, POLITICO reported ^[2]. It has not been reported how many patients lost coverage when their states ended it.

Louisiana Medicaid Director Seth Gold said his state wants to avoid "situations like other states who have had to contract or withdraw entirely their GLP-1 coverage," adding: "We also want to make sure that we can afford it the first time, afford it upfront" ^[2]. Louisiana is not participating in the model ^[2].

The spending figures show why states are wary. Medicaid spending on GLP-1s rose from $1 billion in 2019 to almost $9 billion in 2024, and nearly 40 percent of patients with obesity might qualify for treatment, with about 70 million people relying on Medicaid ^[2]. Johanna Butler, director of health care costs at the National Academy for State Health Policy, said: "It's not always clear when and where the savings will accrue, which can make the case for coverage more challenging" ^[2].

What happens next

Indiana plans to begin offering the drugs by the start of next year ^[2]. Michigan, which already covers GLP-1s, said it applied to participate and was meeting with CMS, with expanded coverage taking effect Jan. 1 if the state and CMS agree ^[2]. Rhode Island's coverage ends in October ^[2]. Butler said most states are likely to take a "wait-and-see" approach and watch how Indiana's Medicaid budget fares ^[2]. CMS said information on future model developments will be shared as it becomes available ^[2]. Novo Nordisk has said it expects only a slight 2026 sales impact from the arrangement ^[1].