Medicare Spending Implications for Semaglutide Under Voluntary Price Agreements

Abstract

This study compares expected total Medicare spending on semaglutide in 2027 under voluntary price agreement participation vs nonparticipation and estimates beneficiaries eligible for expanded obesity-indication coverage whose treatment costs could be offset with savings from the agreement.

In late 2025, the Trump administration announced voluntary agreements with manufacturers regarding pricing and coverage of their injectable glucagon-like peptide-1 (GLP-1)–based therapies,¹ including Novo Nordisk’s semaglutide (Ozempic, Wegovy). The companies agreed to Medicare net prices of $245 per month for plans expanding coverage for obesity and related comorbidities.¹ This will be operationalized through a Centers for Medicare & Medicaid Services (CMS) Innovation Center demonstration project—the Better Approaches to Lifestyle and Nutrition for Comprehensive Health (BALANCE) model,² beginning January 2027.

Separately, semaglutide was also selected for the Inflation Reduction Act’s Medicare Drug Price Negotiation Program.³ The negotiated maximum fair price (MFP) will be $277 for a 30-day supply of Ozempic (diabetes dose) and $386 for Wegovy (weight-loss dose), effective January 2027.³ This study aimed to compare expected total Medicare spending on semaglutide in 2027 assuming full BALANCE model participation vs nonparticipation and to estimate the number of beneficiaries eligible for expanded obesity-indication coverage whose treatment costs could be offset with savings from the voluntary price agreement.

Methods

This study used the October 2025 Medicare Formulary File⁴ to identify plan coverage and beneficiary cost sharing for GLP-1 medications from 2023 to 2026 and semaglutide use from CMS’ publication of the 2027 MFPs.³ National Health and Nutrition Examination Survey (NHANES) data from 2021 to 2023 were used to estimate the prevalence of potential Medicare beneficiaries using semaglutide among current coverage eligibility criteria (diabetes or established cardiovascular disease among adults with body mass index [BMI] ≥27; calculated as weight in kilograms divided by height in meters squared) and expanded obesity-indication eligibility criteria under the BALANCE model (BMI ≥27 with prediabetes; BMI ≥30 with uncontrolled hypertension, chronic kidney disease, or heart failure; or BMI ≥35) (eAppendix in Supplement 1). Using these prevalence estimates and Medicare-reported semaglutide use in 2024, expected Medicare spending on semaglutide in 2027 was calculated separately under plan participation in the BALANCE model and under the MFP. Finally, we calculated the additional number of Part D beneficiaries that could be treated for obesity indications using savings offset from the difference between the MFP and the BALANCE model, assuming 2024 usage. Sensitivity analyses included doubling baseline semaglutide users to account for increased GLP-1 use over time, assuming 50% greater voluntary net price reductions under BALANCE, and their combination. This study used publicly available, deidentified data; thus, institutional review board approval was not required. The study followed the Consolidated Health Economic Evaluation Reporting Standards (CHEERS) reporting guideline, where applicable.

Results

In 2026, nearly all Part D plans covered Ozempic, and 0.2% (Medicare Advantage) and 0% (stand-alone Part D) covered Wegovy (Table 1), with mean coinsurance rates of 21.0% for Ozempic and 31.0% for Wegovy. Medicare reported 2.28 million unique semaglutide users who received 6.9 30-day fills on average in 2024. Assuming no supplemental rebates and 2024 use based on NHANES eligibility estimates, which suggested that 75% of semaglutide use was for Ozempic-level doses and 25% for Wegovy-level doses, full plan participation in the BALANCE model would save $932.7 million relative to the MFP in 2027 (Table 2). These savings could offset the cost of treating 549 473 beneficiaries eligible for expanded obesity-indication coverage. This represents approximately 4.4% of the estimated 12.4 million beneficiaries potentially eligible under the administration’s proposed criteria.⁵

Table 1. Coverage and Cost Sharing per Fill for Semaglutide Injectables Under Medicare Part D, 2023-2026^a.

Drug brand name, by year	Medicare Advantage		Stand-alone Part D
	Plans covering, %	Out-of-pocket cost per fill, median (IQR), $	Plans covering, %	Out-of-pocket cost per fill, median (IQR), $
2023
Ozempic	98.6	47 (40-47)	83.0	45 (37-47)
2024
Ozempic	97.9	47 (42-47)	86.0	153 (45-192)
2025
Ozempic	98.2	47 (47-240)	92.8	173 (143-210)
Wegovy	1.7	297 (278-316)	0	NA
2026
Ozempic	98.7	163 (47-230)	100.0	182 (153-240)
Wegovy	0.2	307 (278-316)	0	NA

Abbreviation: NA, not applicable.

^a Formulary coverage and estimated out-of-pocket spending are from the October 2022 to October 2025 Part D monthly formulary files, representing coverage offered for the following calendar year. Median cost sharing was either the co-payment amount for a 30-day supply or the plan-specified coinsurance multiplied by the average list price per fill of $959 for semaglutide as reported by the Centers for Medicare & Medicaid Services for calendar year 2024.³ Actual out-of-pocket costs could be higher or lower depending on the dose, coinsurance or co-payment, and list price in a given year.

Table 2. Estimated 2027 Spending on Injectable Semaglutide Products in Medicare Part D Under the Maximum Fair Price (MFP) and the BALANCE Model.

	Beneficiaries, No.a	Price per fill, mean, $	Total spending, $	Savings relative to MFP, $	Additional beneficiaries treatable, No. (% eligible)b
MFP (reference)
Ozempic	1 711 500	276.78	3 281 944 392
Wegovy	570 500	385.63	1 524 214 437
Total	2 282 000		4 806 158 830
BALANCE model
Ozempic	1 711 500	245.00	2 905 110 109
Wegovy	570 500	245.00	968 370 036
Total	2 282 000		3 873 480 146	932 678 684	549 473 (4.4)
Sensitivity analysis
Doubled semaglutide use	4 564 000	245.00c		1 865 357 367	1 098 946 (8.9)
Price reduction of 50%	2 282 000	122.50c		3 027 519 987	1 793 616 (14.5)
Combined	4 564 000	122.50c		6 055 039 974	3 567 232 (28.8)

Abbreviation: BALANCE, Better Approaches to Lifestyle and Nutrition for Comprehensive Health.

^a Baseline utilization (2.28 million users; 6.9 fills per beneficiary per year) from the Centers for Medicare & Medicaid Services 2027 MFP publication.³ Total spending assumes 75% at Ozempic dosing and 25% at Wegovy dosing. Sensitivity analysis for doubled use assumes 4.56 million users.

^b Additional beneficiaries treatable = savings relative to MFP ÷ ($245 per fill × 6.9 fills per beneficiary per year). Based on an estimated 12.4 million potentially eligible beneficiaries (eAppendix in Supplement 1) under the administration’s proposed BALANCE criteria.

^c Prices indicate the assumed net price under BALANCE.

In sensitivity analyses doubling baseline semaglutide use, reducing net prices from $245 to $122.50, or both, an estimated 1.1 million to 3.6 million people could be treated without increasing program spending (8.9%-28.8% of the potentially eligible population) (Table 2).

Discussion

This analysis suggests that the lower semaglutide price of $245 established under the BALANCE model could generate savings that would offset the cost of treating an additional 550 000 to 3.6 million Medicare beneficiaries eligible for expanded obesity-indication coverage, depending on assumptions about baseline use and further price reductions.

This study has several limitations. First, it focuses on semaglutide and excludes tirzepatide, for which net prices are unknown. Second, study estimates rely on 2024 utilization (the most recent available) and on assumptions about qualifying indications under the BALANCE model. The estimates do not consider additional indications for which coverage under Medicare Part D and under the BALANCE model is uncertain (eg, metabolic dysfunction–associated steatohepatitis with liver scarring). The sensitivity analyses doubling baseline semaglutide use and further reducing prices provide upper-bound estimates that partially address these limitations.

Plans may be unwilling to accept the trade-off of expanding obesity-indication coverage in exchange for lower per-fill prices under the BALANCE model, given the potential budget implications. The administration is considering incentives for plan entry alongside minimum participation requirements for plans.⁶ Ultimately, such incentives and additional price negotiations will likely be needed to expand Medicare coverage for weight loss medications.

Supplement 1.

eAppendix. Supplemental Methods

eReferences

Supplement 2.

Data Sharing Statement