Medicare moves to cap obesity drugs, close cancer-treatment loophole

Medicare is tightening its grip on drug pricing from two directions. A proposed federal rule for 2029 would close a loophole that has protected medicines transitioning from intravenous to subcutaneous administration, directly affecting drugs like Keytruda and Opdivo. At the same time, a new program starting July 1 will cap GLP-1 obesity drugs at $50 per prescription under a temporary framework that may prove permanent.

The cancer-drug rule targets a narrow but lucrative carve-out. When a manufacturer reformulates an IV therapy for under-the-skin delivery, the new version has historically escaped Medicare price negotiation protections that applied to the original. Keytruda and Opdivo, both top-ten global drug franchises, have recently introduced subcutaneous versions. BioPharma Dive reports the 2029 rule would end that shelter.

The obesity-drug program arrives faster and with less clarity about duration. STAT notes the Trump administration pitched it as temporary but created no automatic sunset. After July, beneficiaries will pay a flat $50 for GLP-1 medications like Ozempic and Wegovy, drugs that currently run hundreds of dollars per month out-of-pocket. The structure resembles the insulin cap Congress enacted in 2022, which began as a two-year pilot and remains in place.

Both moves expand Medicare's pricing authority in high-revenue categories. Cancer immunotherapy and obesity drugs together account for over $60 billion in annual U.S. sales. Manufacturers have until the final rule to comment on the subcutaneous provision; the GLP-1 program has no comment period and launches in four months.

The short runway and the precedent of temporary programs becoming permanent suggest the obesity cap will outlast its nominal expiration. Lawmakers rarely vote to raise out-of-pocket costs on a popular benefit once beneficiaries expect it. The cancer-drug loophole has no constituency defending it, which makes its closure more straightforward but no less expensive for the companies that planned around it.