Medicare GLP-1 Cost-Neutrality Analysis: MFN Pricing Still Falls Short by ~$18B

A University of Chicago analysis published in JAMA Network Open (May 2026) modeled the 10-year budget impact of expanding Medicare GLP-1 coverage under the new Most Favored Nation (MFN) pricing framework.

Key Findings

• MFN price set at $245/month for GLP-1 drugs when prescribed for weight management — far below prior US list prices that often exceeded $1,000/month
• Under expanded coverage to ~30 million Medicare beneficiaries with obesity (without diabetes or CVD), the model projects:
  • ~$74 billion in 10-year drug costs
  • ~$56 billion in downstream health savings (reduced diabetes, heart disease, complications)
  • Net ~$18 billion in additional Medicare spending over 10 years
• The $245 price includes a $50 monthly copay, meaning actual Medicare cost is $195/month — close to the cost-neutrality point of $185/month calculated by the researchers

Key Assumptions

• 30% of newly eligible patients start therapy
• 40% of starters remain on treatment long-term
• Semaglutide patent expiry expected around 2032, which could bring substantial price reductions

Policy Implications

The researchers flagged that most of the remaining cost sits in the long-term maintenance phase and called for innovative weight-maintenance strategies (alternative dosing, lower-cost drugs, behavioral interventions) to close the gap. The near-cost-neutrality at current pricing strengthens the case for broader coverage by Medicare, Medicaid, and private insurers.