Over the past several years, GLP-1 manufacturers have experienced significant stock gains, driven by the increased prescribing of these drugs. One of the largest consumer groups of these medications are Medicare beneficiaries. In 2025, Medicare spent over $21 billion on GLP-1’s, up sharply from just $5.7 billion in 2022. This dramatic increase highlights both the growing demand for GLP-1s and their impact on overall healthcare spending.
A recent announcement from the Centers for Medicare & Medicaid Services (CMS) introduced the Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth (BALANCE) initiative. This model is based on data and evidence showing that improved access to GLP-1 medications can lead to better long-term health outcomes. Historically, high costs of the medications limited access to these drugs, but the BALANCE model is designed to significantly reduce these financial barriers.
Under this approach, CMS will directly negotiate with GLP-1 manufacturers on behalf of Medicare, state Medicaid agencies, and all Part D plan sponsors to lower costs across the board. Beginning in 2026, consumer costs will be reduced through a rebate program between participating manufacturers and Part D plan providers. For Medicaid, price reductions will be achieved through supplemental rebate agreements between state agencies and manufacturers, potentially as early as May 2026.
Ultimately, CMS plans to launch the demonstration program around July 2026. Once implemented, consumers enrolled in Part D benefits, who refill prescriptions from approved manufacturers, would pay a $50 copay per refill. This initiative is intended to serve as a bridge to the full implementation of the BALANCE model in 2027, when costs could be reduced even further.
At MP Group, we will continue to share timely and relevant Medicare updates so you can stay informed about important developments and policy changes.
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