WASHINGTON, January 26, 2026 — The buzz around drugs like Ozempic and Wegovy isn’t just about weight loss anymore. These medications, initially designed to manage type 2 diabetes, are now facing a complex reality when it comes to access for those who could benefit from them, particularly individuals covered by Medicaid. Despite their effectiveness, high costs are creating significant hurdles, leaving millions potentially without a crucial treatment option.
Medicaid coverage for obesity drugs remains limited, with only 13 state programs offering access to GLP-1s as of January 2026.
The upfront price tag of GLP-1 drugs is a major concern for both government and private insurers. Even as evidence mounts supporting their use in treating obesity, some employers and state Medicaid programs are restricting coverage. States are grappling with tighter budgets, exacerbated by anticipated federal Medicaid cuts in 2025, forcing a re-evaluation of obesity drug coverage. Yet, the need is undeniable: nearly four in ten adults and a quarter of children enrolled in Medicaid have obesity. Expanding access could offer effective treatment to millions, and potentially reduce long-term healthcare costs associated with obesity-related chronic diseases—though proving those savings is proving difficult.
The federal government has recently taken steps to address the cost issue. The Trump administration reached agreements with Eli Lilly and Novo Nordisk in November 2025 to lower prices for Medicare, Medicaid, and direct purchasers through a new “TrumpRx” website. In December 2025, the administration also unveiled the BALANCE model, a five-year initiative aiming to expand access to obesity drugs by negotiating lower prices with manufacturers. This voluntary model, slated to begin in May 2026 for Medicaid and January 2027 for Medicare Part D, includes standardized coverage criteria and lifestyle support. However, the impact on Medicaid enrollees remains uncertain, as they already have limited or no copays, and the cost of purchasing directly from manufacturers may still be prohibitive.
States have the authority to decide whether to cover obesity drugs under Medicaid, with a long-standing exception to the requirement to cover nearly all FDA-approved medications. While coverage is mandated for conditions like diabetes, cardiovascular disease (since March 2024 for Wegovy), and moderate to severe obstructive sleep apnea (since December 2024 for Zepbound), obesity treatment remains optional. Coverage is also required if deemed medically necessary for children under Medicaid’s Early and Periodic Screening, Diagnostic and Treatment (EPSDT) benefit.
As of January 2026, 13 state Medicaid programs cover GLP-1s for obesity treatment under fee-for-service. However, this number has fluctuated. KFF’s 2025 Medicaid budget survey initially found 16 states offering coverage as of October 2025, but four—California, New Hampshire, Pennsylvania, and South Carolina—have since eliminated it, likely due to budget constraints. North Carolina briefly eliminated coverage due to a legislative stalemate but reinstated it in December 2025. Several other states are considering restrictions for the 2026 or 2027 fiscal years, and overall state interest in expanding coverage appears to be waning, with cost remaining the primary concern.
The use of GLP-1s within Medicaid has surged since 2019. The number of prescriptions increased sevenfold, from approximately 1 million in 2019 to over 8 million in 2024. Simultaneously, gross spending jumped ninefold, from about $1 billion to nearly $9 billion, with the average cost per prescription reaching $1,000 in 2024. Preliminary data through June 2025 indicates this growth will continue. While rebates reduce the net cost, Novo Nordisk reported that rebates and fees accounted for roughly 40% of the cost of Ozempic and Wegovy, with expectations for further increases.
Ozempic and Wegovy (semaglutide), along with Mounjaro and Zepbound (tirzepatide), have been key drivers of this growth. Ozempic, approved for type 2 diabetes in 2017, became the most prescribed and costly GLP-1 by 2024, accounting for 39% of prescriptions and spending. From 2023 to 2024, prescriptions and spending for Wegovy (approved for obesity in 2021 and cardiovascular disease in 2024) and Mounjaro (approved for type 2 diabetes in 2022) more than doubled. Zepbound (approved for obesity in 2023 and sleep apnea in 2024) saw a more than fivefold increase in prescriptions and spending. Currently, Medicaid data doesn’t differentiate between GLP-1 use for diabetes, cardiovascular disease, sleep apnea, or obesity.
This analysis used State Drug Utilization Data (SDUD) from 2019 through 2024, downloaded in January 2026. The SDUD, part of the Medicaid Drug Rebate Program, provides data on prescriptions, spending, and cost-sharing. The analysis included all FDA-approved GLP-1s, identified using the World Health Organization’s Anatomical Therapeutic Chemical (ATC) classification system. Limitations include the lack of data on days supplied per prescription and the fact that gross spending figures don’t account for rebates. The SDUD is updated quarterly, meaning totals can vary depending on the download date.
