Historically, medications used solely for anorexia, weight loss, or weight gain were excluded from Medicare coverage. The proposed contract year (CY) 2026 Medicare Advantage (MA) and Part D rule for Medicare Part D prescription drug plans included provisions that would have expanded coverage to weight loss medications for all Medicare and Medicaid beneficiaries with obesity. However, the final CY 2026 MA and Part D rule did not include these provisions, retaining the gap in the market for patients seeking affordable options to address obesity and related comorbidities. Telehealth companies have stepped in to fill this gap by offering GLP-1 products through lower-cost subscription models or compounded formulations.

On November 6, 2025, the administration unveiled agreements with the manufacturers of brand-name GLP-1 products that will reduce the prices of the brand-name products when purchased through TrumpRx, a direct-to-consumer platform. Additionally, beginning in April 2026, Medicare will cover GLP-1 medications for members with obesity and related comorbidities. As Medicare coverage rules have not been amended to reflect this expansion, Medicare intends to use two special demonstration projects to cover GLP-1 medications: the Section 402 Part D demonstration and the Center for Medicare and Medicaid Innovation (CMMI) demonstration.

Demonstrations allow CMS to test novel coverage structures without amending the statute. In past years, CMS has used Section 402 authority for drug-related demonstrations. Examples include a Part D premium stabilization demonstration to limit plan premium increases and a program that allowed prescription drug vouchers. CMS has also tested drug-focused models through CMMI, such as proposals to cap generic drug copays at $2 under Part D.

Under the administration’s new plan:

• Medicare pricing for GLP-1 injections will be set at $245 per month, with patient copays capped at $50 per month.
• State Medicaid programs will have access to these pricing arrangements.
• TrumpRx will offer GLP‑1 injections at approximately $350 per month. It connects patients directly with manufacturer programs, bypassing intermediaries such as pharmacy benefit managers. The platform is designed primarily for cash-paying customers, particularly those without insurance coverage for GLP‑1 medications.
• Manufacturers will receive expedited FDA review for oral GLP-1 products. The FDA has not announced a formal timeline. However, the first oral GLP‑1, submitted through a new drug application accepted in May 2025, is expected to receive a decision in December 2025. Introductory pricing is projected at around $149 per month for the lowest dosage.

These changes mark a significant reduction from current list prices, which often exceed $1,000 per month.

There is uncertainty about how these new arrangements will interact with other federal pricing programs, however. For example, CMS recently announced negotiated prices under the Medicare Drug Price Negotiation Program (MFP) for GLP-1 drugs that will take effect in 2027. These prices, ranging from approximately $274 to $385 for certain GLP-1 products, are higher than the TrumpRx price of $350. TrumpRx uses a most-favored nation (MFN) model to tie US drug prices to international benchmarks. Medicare Part D plans must use the MFP price, but the MFN price is optional. This could create uncertainty about which price will apply when both programs overlap.

Why it matters

While the administration’s announcement may improve affordability and access for patients, it introduces new challenges for telehealth providers and other digital health platforms:

• Erosion of pricing advantage. Many telehealth platforms have relied on subscription models or compounded GLP-1 offerings to differentiate on cost. With Medicare and direct-to-consumer platforms offering substantially lower prices, that advantage may narrow.
• Competitive landscape shifts. Manufacturers’ partnerships with federal programs could foreshadow similar arrangements with commercial insurers, further compressing margins for telehealth platforms offering compounded alternatives.
• Regulatory and compliance considerations. In September 2025, the FDA issued warning letters to companies distributing certain GLP-1 products. This coverage announcement marks a continuation of the administration’s increased focus on GLP-1s. Accordingly, companies should review marketing practices, pricing strategies, and supply chain arrangements to ensure compliance with evolving federal and state requirements. Telehealth companies should also prepare for uncertainty around pricing and coverage rules as CMS clarifies how MFN and MFP programs will coexist. This ambiguity could affect long-term pricing models.

Looking forward

Medicare’s new GLP-1 coverage will significantly alter pricing and access, creating both opportunities and compliance challenges for digital health platforms. Providers should evaluate how these changes affect their pricing models, compounding partnerships, and regulatory obligations and take steps to align strategies with the evolving market. We will continue to monitor federal pricing initiatives, FDA guidance on GLP-1 compounding, and emerging enforcement trends impacting telehealth and digital health providers.

If you have questions about how these developments may affect your business, please contact any of the authors of this article.