As GLP-1 Costs Climb, Medicare Part D Plans Face a Reckoning

Medicare Part D plans are running out of easy ways to absorb the cost of glucagon-like peptide-1 (GLP-1) medications. Even as cash prices for the drugs have fallen substantially over the past year and a half, the size of the potential patient population—combined with new financial liabilities created by the Inflation Reduction Act (IRA) and the expiration of a temporary federal premium-stabilization program—is reshaping how plans think about coverage, formulary placement, and long-term sustainability, according to Adam Colborn, JD, vice president of government affairs at the Academy of Managed Care Pharmacy (AMCP).

"The pressures facing Part D plans are the same as the pressures facing other types of payers," said Colborn in an interview with The American Journal of Managed Care^® (AJMC^®). “What's different about Part D is that plans cover GLP-1s for certain indications, including diabetes, while access to GLP-1s for weight loss for eligible Part D beneficiaries is currently being provided through a temporary CMS demonstration program known as the Bridge.”

A High-Cost Drug With a Uniquely Large Population

GLP-1s occupy an unusual position in drug spending: not quite the high-volume, low-cost drugs the health care system is built to absorb, and not quite the low-volume, high-cost specialty therapies like cell and gene treatments that plans manage through narrower risk pools. Instead, they combine relatively high per-patient cost—even after recent price declines—with a potential patient population in the millions.

"They're a really prime example of this phenomenon of having a relatively high-cost drug with a very large potential universe of patients," said Colborn. He noted that CMS estimates that roughly 13 million Medicare beneficiaries could potentially be eligible for a GLP-1 for weight loss through the Bridge demonstration, a figure that does not include Part D enrollees who qualify for GLP-1 treatment for covered indications such as diabetes or cardiovascular disease.

The 13 million figure should be understood as a potential population estimate, rather than the number of beneficiaries who currently meet all Bridge eligibility requirements.

The Bridge Demonstration: A Stopgap With an Uncertain Future

The Bridge program exists because an earlier, more permanent CMS Innovation Center model to facilitate Part D coverage of GLP-1s for weight loss never took effect, according to Colborn. That model required participating Part D plans to reach an 80% enrollment threshold, but participation fell short, according to Colborn. Bridge was created to fill the gap and was originally slated to run from July through December 2026; it has since been extended through the end of 2027.

Bridge provides eligible Part D beneficiaries access to GLP-1 medications for weight loss outside the Part D benefit and payment flow. Under the program, the negotiated monthly price is $245, with beneficiaries paying $50 in cost sharing and the federal government covering the remaining $195. Humana was selected to administer the program, including running prior authorizations.

"If you're a Part D enrollee who qualifies for bridge coverage, you probably have some of the most favorable coverage terms in the US," said Colborn, adding that Bridge enrollees currently have "the most consistent and reliable access of any line of business in the health insurance world"—at least through 2027.

That stability, however, may be temporary. Demonstration programs are generally limited in duration, and Colborn noted that such programs often end when someone with legal standing argues that a demonstration has injured them. Bridge is unusual in that no party is obviously injured: health plans don't bear the financial liability, providers aren't losing reimbursement, patients are gaining access rather than losing it, and manufacturers are being paid an agreed-upon amount.

"I think there is a situation where Bridge is sort of extended indefinitely," said Colborn. However, political pressure—for instance, concern in Congress about the program's total cost—forces a change. He called the question of what happens to Bridge, and to the potentially large population of beneficiaries who could qualify, if it remains in place beyond 2027, "a really interesting political question."

IRA Liability Changes Compound the Pressure

Independent of GLP-1-specific dynamics, the IRA substantially changed the financial risk that Part D plans assume. Changes to coverage phases and catastrophic-phase liability shifted a substantially larger share of costs onto plans than they carried before the law took effect. That shift is occurring at the same time as what Colborn called "this explosion of high-cost, high-population drugs"—a combination he said has created a genuinely difficult environment for Part D plans.

Layered on top of that is the expiration of the temporary Part D Premium Stabilization Demonstration. The program reduced the uniform base-premium increase for beneficiaries in 2026 compared with 2025, while also allowing a larger year-over-year premium increase than under the prior year's parameters. CMS has announced that the demonstration will conclude after 2026, meaning plans will return to the regular Part D premium-setting framework for 2027.

An Unsettled Cost-Offset Picture

Part of what makes GLP-1 coverage decisions difficult, Colborn said, is that the evidence for long-term cost savings remains mixed. While it is intuitive that treating cardiovascular and weight-related conditions now should reduce downstream costs later, GLP-1s are effectively a maintenance therapy—patients may need to remain on them for a long time, potentially indefinitely. Early data, he said, showed a high proportion of patients abandoning GLP-1 therapy within 12 months of starting it.

"When that happens, you sort of lose all of the clinical benefit very quickly, and that's money that you've just spent for really no benefit,” said Colborn.

There is a countervailing trend, though: cash prices for GLP-1s have fallen quickly over the past 18 months, which Colborn said could eventually make coverage easier to sustain simply because the per-patient cost has come down. He said he hasn't yet seen that dynamic play out within 2026, but expects it could shift the calculus going forward.

That tension between near-term cost and long-term savings shows up in the numbers, too. A recent Wells Fargo report on GLP-1s' ripple effects across health care found that the Congressional Budget Office estimates authorizing Medicare to cover antiobesity medications would add about $35 billion in federal spending between 2026 and 2034, with the near-term cost per user, roughly $5600 in 2026, far exceeding the roughly $50 per user in offsetting federal savings that year.¹

Utilization Management Fills the Gap For Now

In the absence of broad weight-loss coverage outside Bridge, Part D plans have relied on relatively simple utilization management to control off-label use, Colborn said. For example, a plan might require prior authorization tied to a documented qualifying diagnosis. Patients without a qualifying diagnosis on record may be more likely to be using the drug outside the scope of the Part D benefit.

The distinction is important: Part D can cover GLP-1s for certain FDA-approved indications beyond diabetes, including cardiovascular risk reduction and other covered indications. Bridge, meanwhile, provides a separate pathway for eligible Part D beneficiaries seeking GLP-1 treatment for weight loss.

A similar dynamic is playing out among employers, Colborn said, though the picture there is more mixed. He estimated that roughly half of employers covered GLP-1s for weight loss a year ago and that the share has "sort of held steady" since, even as some larger employers with more financial flexibility double down on coverage and others pull weight-loss GLP-1s from their formularies entirely. That tracks with Peterson-KFF Health System Tracker data cited in the Wells Fargo report, which found that about 64% of large firms say covering GLP-1s for weight loss has moderately or significantly increased their prescription-drug spending.¹

Gross Medicare Part D spending on GLP-1s reached $27.5 billion in 2024—a fivefold increase since 2019—even before broad coverage for the obesity indication is authorized, according to the Wells Fargo report.

Colborn expects employer coverage to continue expanding over the long term, particularly if falling cash prices change the cost calculus for employers still on the fence. He cited TrumpRx prices as having fallen from roughly $1000 a month to approximately $250 to $350 a month, although actual current prices vary by drug, dose, and manufacturer offer.

The cost-offset debate isn't unique to Part D. The SELECT (NCT03574597) trial found that semaglutide reduced major adverse cardiovascular events by 20% in adults with overweight or obesity and without diabetes—evidence that, if similar benefits occur at scale, could eventually reduce hospital admissions and downstream interventions across payer types.² But the Wells Fargo report's authors caution that those clinical benefits take years to materialize as lower utilization and, even then, may not fully offset the upfront cost of the drugs.¹

A study published in JAMA Surgery found that metabolic bariatric surgery volumes fell 34.1% from 2022 to 2024, even as GLP-1 use rose more than 140% over the same period.³ The findings indicate that GLP-1s are already coinciding with changes in utilization in adjacent service lines, although the study does not establish that increased GLP-1 use caused the decline in bariatric surgery.

For Part D plans, the challenge is therefore less about a single drug class than about the interaction of price, utilization, benefit design, and policy. GLP-1s are arriving at a time when plans are assuming more financial responsibility under the redesigned Part D benefit, while temporary programs such as Bridge are creating a separate pathway for weight-loss coverage. How those forces evolve as prices fall, utilization grows, and temporary policy interventions expire will help determine the long-term economics of GLP-1 coverage.¹

“We have the agents now that can make a difference in these people's lives, but many of my patients do not have access,” John Anderson, MD, an internal medicine and diabetes specialist at the Frist Clinic and past president of medicine and science for the American Diabetes Association (ADA), told AJMC. “It's expensive. It's not covered on their Medicare plan. It's not covered on their commercial plan. And my affluent patients, no problem. They can pay for whatever they need to pay for. We cannot have these lifesaving, game-changing medications not be able to be taken by a large percentage of our population.”

References

1. Landi H. GLP-1s are forcing a strategic reset across healthcare: Wells Fargo report. Fierce Healthcare. August 20, 2026. Accessed August 24, 2026. https://www.fiercehealthcare.com/providers/glp-1s-forcing-strategic-reset-across-healthcare-well-fargo-report
2. Colhoun HM, Lingvay I, Brown PM, et al. Long-term kidney outcomes of semaglutide in obesity and cardiovascular disease in the SELECT trial. Nat Med. 2024;30(7):2058-2066. doi:10.1038/s41591-024-03015-5
3. Calzaretta RJ, Fink S, Kothari K, et al. Trends in metabolic bariatric surgery utilization in the era of GLP-1s, 2022-2024. JAMA Surg. 2026;161(7):746–748. doi:10.1001/jamasurg.2026.1343