Trump's Drug Price Cuts Spark Innovation Debate Amid Budget Tensions

President Donald Trump's administration has struck a landmark deal with Eli Lilly and Novo Nordisk to slash the prices of popular GLP-1 weight-loss drugs, including Ozempic and Wegovy, for Medicare, Medicaid, and cash-paying patients. The agreement, announced from the White House on Thursday, marks the third major drug pricing deal under the administration's Most Favored Nation (MFN) model, following similar accords with Pfizer and AstraZeneca, according to a BioSpace report.

Under the terms, the Trump administration will offer the drugs through its direct-to-consumer platform, TrumpRx, at an average price of $350 per month for injectables and pills. This represents a steep drop from the current $1,000 to $1,350 monthly cost for Ozempic and Wegovy. The administration projects prices will further decline to $245 per month within two years, the BioSpace report said. Novo Nordisk and Eli Lilly will also introduce future weight-loss pills, such as oral Wegovy, at an initial price of $150, the report added.

The deal has already moved markets: Eli Lilly shares rose 1.6% to $941, while Novo Nordisk's U.S.-listed stock climbed 1%, according to a Reuters summary. However, year-to-date performance remains mixed, with LLY up 21.4% and NVO down 45.4%, the Reuters piece noted. Health Secretary Robert F. Kennedy Jr. hailed the agreement as "the biggest drug in our country" and emphasized its potential to improve productivity for millions of Americans, BioSpace reported.

The MFN framework, established via executive order earlier this year, requires drugmakers to align U.S. prices with those in other nations. The latest deal expands this strategy to GLP-1 drugs, a category experiencing explosive demand due to their efficacy in weight management and diabetes treatment, the BioSpace report said. Critics, however, argue the approach risks stifling innovation by reducing profit margins for pharmaceutical companies.

A dramatic moment during the press conference underscored the deal's significance. As Health Secretary Kennedy spoke, an attendee near Novo Nordisk CEO Maziar Mike Doustdar collapsed, cutting off the live feed. A White House official later stated the individual, affiliated with one of the companies, was "okay," the BioSpace report added. The incident briefly disrupted the event but did not derail the announcement.

The agreement also highlights broader tensions in Trump's healthcare agenda. While the administration touts affordability gains, it faces criticism for simultaneously proposing cuts to federal programs like SNAP and WIC, which support low-income families during the ongoing government shutdown, according to a Reuters story.