Trump Admin Proposes Medicare Coverage for GLP-1 Drugs Amid Fraud Concerns

The Trump administration is reportedly considering a five-year pilot program that would expand Medicare and Medicaid coverage to include GLP-1 weight loss drugs such as Ozempic and Wegovy, for patients with obesity and related conditions like cardiovascular disease. The proposal, long sought by pharmaceutical companies and obesity advocates, could enhance access to these medications, which are highly effective but also among the most expensive on the market, with costs often exceeding $1,000 per month [1]. However, legal experts caution that this expansion may also open the floodgates to widespread fraud, potentially leaving taxpayers on the hook for billions in false claims.

The GLP-1 class of drugs has seen explosive growth due to its ability to help patients lose weight quickly with minimal lifestyle changes. Yet, this demand—coupled with high prices and the availability of government reimbursement—creates a prime environment for abuse. The Centers for Medicare and Medicaid Services (CMS) has estimated that covering these medications for obesity treatment could cost Medicare $35 billion from 2026 to 2034 [1]. Legal experts warn that this financial burden may be exacerbated by fraudulent schemes, including upcoding diagnoses, falsified documentation, and medically unnecessary prescriptions—tactics that have historically plagued the healthcare sector [1].

Pharmaceutical companies, many of which are global giants with deep marketing budgets, are expected to intensify their efforts to dominate the GLP-1 market. Legal professionals anticipate the use of aggressive—and potentially illegal—tactics to influence providers, such as disguised kickbacks through speaking fees, consulting contracts, and lavish events [1]. There are also concerns about off-label marketing, where manufacturers push unapproved uses for the drugs, a practice that has led to multi-billion-dollar False Claims Act (FCA) settlements in the past [1].

Telehealth and compounding pharmacies are also likely to be involved in potential fraud. Online clinics and pharmacies are already seeing increased demand for GLP-1 drugs and may bypass required in-person evaluations or bill for unapproved formulations [1]. Legal experts warn that some providers could rubber-stamp prescriptions based on minimal patient information, especially when prescriptions are issued through virtual consultations [1].

While the risk of fraud is significant, it is not a foregone conclusion. The CMS could implement robust safeguards, including real-time claims monitoring, stringent eligibility verification, and enhanced audit protocols, to detect and deter fraudulent activity [1]. In some areas, the federal government has improved its use of data analytics to identify suspicious prescribing patterns and outlier providers. If drug manufacturers remain mindful of ongoing scrutiny under the FCA and anti-kickback laws, they may avoid past mistakes. Likewise, many clinicians are expected to follow medical guidelines and prescribe GLP-1 drugs only to those who genuinely benefit from them [1].

The proposed pilot program represents a pivotal shift in the U.S. healthcare landscape. If properly managed, it could deliver life-changing treatment to millions of Americans. However, without strict oversight, it could also lead to a new wave of fraud. Legal experts and whistleblowers will play a crucial role in ensuring that the benefits of these drugs are not overshadowed by financial exploitation [1].

Source: [1] Fortune — https://fortune.com/2025/08/12/medicare-fraud-ozempic-trump-glp-1/