Slimmed down Medicare prices for diabetes and obesity drugs

Summary

Marketplace Morning Report

Episode: Slimmed down Medicare prices for diabetes and obesity drugs
Date: November 26, 2025
Host: David Brancaccio

Overview

This episode delivers a tight summary of the latest business and economic headlines, with a focus on new, significantly reduced Medicare prices for popular diabetes and obesity drugs under the Inflation Reduction Act. The show also covers government intervention in the private sector under the Trump administration, and highlights how Feeding America has re-imagined its food distribution network using a market-style bidding system.

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Key Discussion Points & Insights

Major Discounts on Diabetes and Obesity Drugs under Medicare

[01:14–03:01]

• Medicare Discounts for Ozempic & Wegovy:

  • Starting in 2027, Medicare will receive a 71% discount on Ozempic and Wegovy, reducing out-of-pocket costs from almost $1,000 per month to $274.
  • Novo Nordisk, the manufacturer, has also lowered monthly prices for existing out-of-pocket patients.

• More Lower-Priced Drugs Through Government Website:

  • Upcoming obesity drugs from Novo Nordisk and Eli Lilly will be available at reduced prices on a new government-run website, launching early next year.

• Wider Drug Discounts:

  • The Centers for Medicare and Medicaid Services (CMS) announced price drops for 14 additional drugs, also effective in 2027.

• Background and Legislation:

  • These changes are possible due to the Inflation Reduction Act (2022), which for the first time empowers CMS to negotiate prices for 15 drugs annually.
  • The discounted prices go into effect in 2026 for the first wave of drugs (e.g., diabetes drugs and a widely used blood thinner), with the next wave following in 2027.

Notable Quote:

"Medicare will get a 71% discount off the list price of Ozempic and Wegovy starting in 2027 and that'll bring the monthly costs down from nearly $1,000 to $274." — Henry Epp [01:34]

Trump Administration: Private Sector Intervention

[03:01–04:02]

• Mixing Government and Business:

  • President Trump is pursuing active intervention in public companies (e.g., Intel) and even influencing entertainment companies, with rumors swirling about a presidential push to revive the "Rush Hour" movie franchise at Paramount-Skydance.

• Cultural Ripple Effects:

  • The director, Brett Ratner, is benefiting from presidential support after a slowdown due to allegations of misconduct (which he denies) and is working on a documentary about First Lady Melania Trump.
  • Paramount is simultaneously bidding for Warner Brothers, a high-stakes deal likely facing antitrust review.

Notable Quote:

"President Trump often works to mix government into the private sector. Now there are reports that the studio Paramount Skydance may revive a dormant movie franchise, Rush Hour, at the urging of the president." — David Brancaccio [03:01]

Feeding America: Bringing Markets to Food Banks

[05:29–08:52]

• Old vs New System:

  • Feeding America, the nation's largest hunger nonprofit, struggled with logistics using an algorithmic system that pushed unwanted food (e.g., excess potatoes) to food banks, leading to inefficiencies.

• Market Innovation—The Choice System:

  • Food banks now participate in daily online "bidding wars" using digital “fake cash” to win truckloads of preferred food items.
  • Designed by UChicago economist Canis Prendergast, the system gives banks in higher-poverty areas more points to ensure equity.

• Efficiency and Fairness:

  • This system accommodates food banks’ differing needs and preferences, greatly increasing satisfaction and efficiency.

• Scarcity Remains a Challenge:

  • The system can't remedy shortages—for highly sought-after items like baby formula, not all banks can "win."
  • Example: Darrell Bascom in Missouri loses out on a baby formula shipment to a New York bank with more bidding points.

Notable Quotes:

"Roger says, I'm sick of them giving me potatoes... I have a warehouse full of potatoes." — Canis Prendergast recounts, [07:17–07:24]
"There's an inherent fairness in it." — Canis Prendergast, [07:51]
"You can't always get what you want." — Harshawn Rattenpaul, [08:38]

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Memorable Moments and Speaker Quotes

On Drug Price Negotiations:
“They can negotiate some drug prices because of this bill that was signed by former President Joe Biden back in 2022. That was the Inflation Reduction Act.”
— Henry Epp [02:22]

On Feeding America's food distribution transformation:
“Sometimes markets, if they're designed well, can facilitate choice in that way.”
— Canis Prendergast [08:05]

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Timestamps for Important Segments

• Medicare’s new drug discounts: [01:14–03:01]
• Trump administration & Paramount’s "Rush Hour" revival: [03:01–04:02]
• Feeding America’s food bank market system: [05:29–08:52]

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Tone & Language

• Clear, factual, and brisk—matching the Marketplace style.
• Quotes from guests and insiders add a conversational, practical flair.

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Takeaway

The episode presents important shifts in health policy that will directly impact Medicare recipients' costs, provides a quick look at ongoing government influence on major private sector decisions, and spotlights an innovative market mechanism that’s changing how America’s food banks distribute resources—all told with Marketplace’s direct and informative tone.

Transcript

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[David Brancaccio]

The Medicare System and patients on Medicare will get a discount on some popular drugs that treat diabetes and obesity. I'm David Brancaccio in Los Angeles. We're leading with a follow up move by the Trump administration aimed at lowering the prices of weight loss drugs including ozempic and WeGovy. Marketplace's Henry Epp is here. Live with more.

[Henry Epp]

Henry yeah, Medicare will get a 71% discount off the list price of Ozempic and wegovy starting in 2027 and that'll bring the monthly costs of those drugs down from nearly $1,000 to $274. Novo Nordisk, the maker of these drugs, recently also lowered the monthly price for existing patients who pay out of po. And the Trump administration also announced earlier this month that some future obesity drugs from Novo Nordisk and Eli Lilly will be available for lower prices through a government run website. And the administration has said that site will launch early next year. And these aren't the only drugs that'll be discounted. The Centers for Medicare and Medicaid Services announced price reductions for 14 other drugs also starting in 2027.

[David Brancaccio]

And how did this Medicare Services outfit pull off these discounts?

[Henry Epp]

Henry yeah, so they can negotiate some drug prices because of this bill that was signed by former President Joe Biden back in 2022. That was the Inflation Reduction Act. That bill allowed CMS to negotiate the price of 15 drugs per year with pharmaceutical companies for the first time. But the law didn't allow those negotiated prices to take effect until 2026. So we're about to see the first batch of them in January. And these are lower prices for certain diabetes drugs and also a popular blood thinner the Biden administration negotiate last year. And then we'll see the next round of negotiated prices in 2027 for Ozempic and Wegovy and some others.

[David Brancaccio]

Henry, thank you for this. From ordering up government stakes in publicly held companies such as microchip maker intel to telling Cracker Barrel to go back to its original logo, President Trump often works to mix government into the private sector. Now there are reports that the studio Paramount Skydance may revive a dormant movie franchise, Rush Hour, at the urging of the president. Trump is a booster of the franchise's director, Brent Ratner, whose career slowed after allegations of sexual misconduct, which he denies. Ratner is now working with Amazon on a documentary about first lady Melania Trump. Meanwhile, Paramount is among bidders for another studio, Warner Brothers, that could face federal antitrust scrutiny whichever company wins that bid.

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This is the story of the One As a custodial supervisor at a high school, he knows that during cold and flu season, germs spread fast. It's why he partners with Granger to stay fully stocked on the products and supplies he needs, from tissues to disinfectants to floor scrubbers, all so that he can help score students, staff and teachers stay healthy and focused. Call 1-800-GRAINGER Click grainger.com or just stop by Grainger for the ones who get it done.

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[David Brancaccio]

America is the largest nonprofit tackling hunger in the country. It distributes billions of pounds of food each year from 200 food banks. Feeding America used to Employ an algorithm to sort out those complicated logistics. It generated a list of food banks based on need and. And when a shipment of food became available, Feeding America then called the food bank at the top of the list. But if a food bank didn't need or want that donation for any reason, that presented a problem, a solution. Good old market economics. Harshan Rattenpaul reports from Missouri.

[Harshawn Rattenpaul]

Just about every morning when Darrell Bascom gets to the office, he logs onto his computer and immediately starts bidding online.

[Darrell Bascom]

It's kind of fun to go out and shop each day.

[Harshawn Rattenpaul]

We're not talking about ebay here. Bascom works at a food bank in Columbia, Missouri, and he's bidding on truckloads of food.

[Darrell Bascom]

We have a bid coming up at noon. I found a snack load on there. Had some Slim Jims. It has some Angies Popcorn.

[Harshawn Rattenpaul]

But what Bascom really wants today is a truck of baby formula. The government shutdown affected some programs that usually provide formula to families who need it.

[Darrell Bascom]

All the food banks have been scrambling, trying to figure out how can we get baby formula into the network.

[Harshawn Rattenpaul]

But to get the formula, you'll have to outbid hundreds of food banks on this choice system, Feeding America's method of deciding who gets what. If a food bank really wants a certain truckload, they can place a high bid. Whoever bids the most wins that truckload every day. Currency, sort of like digital fake cash, is redistributed among the food banks. It's the brainchild of Canis Prendergast, an economist at the University of Chicago. When he started working on this, he remembers talking to a man named Roger about the old system.

[Canis Prendergast]

And Roger says, I'm sick of them giving me potatoes.

[Harshawn Rattenpaul]

Roger was a food bank director in Idaho.

[Canis Prendergast]

I have so many potatoes here already, I have a warehouse full of potatoes.

[Harshawn Rattenpaul]

The problem was, Feeding America had no way to know that one food bank might be overflowing with potatoes and and another might desperately want some. So Prendergast proposed this market economy, where food banks use fake cash to indicate they don't want potatoes but would love baby formula. He tried to make the system efficient and equitable.

[Canis Prendergast]

There's an inherent fairness in it.

[Harshawn Rattenpaul]

For example, food banks in areas with higher poverty get more points to spend. And it's working. Prendergast says food banks value the donations through the choice system much more than before.

[Canis Prendergast]

In a world where people want very different things, but you're not sure exactly what they want, Sometimes markets, if they're designed well, can facilitate choice in that way.

[Harshawn Rattenpaul]

But markets can't solve scarcity. Back in Missouri, it's now noon, and Darrell Bascom with the Food bank is seeing how he fared with the bid system. He did win that truck of snacks for 3,000 points, but what did that.

[Darrell Bascom]

Load of baby formula go for in the end? It went for 40,000 points.

[Harshawn Rattenpaul]

He lost to a food bank in New York that spent more shares on formula that day than Bascom had in his whole account. In any economy, you can't always get what you want. In Missouri, I'm Harshawn Rat and Paul.

[David Brancaccio]

For Marketplace, but you can get this if you want. Our free Daily Wrap newsletter brings you the day's news on money markets, innovation, workplace culture straight to your inbox. Weekday evenings, our crew puts out a tight, sparkling read. I would say sign up for the Marketplace daily wrap. Free marketplace.org subscribe in Los Angeles, I'm David Brancaccio with our Morning Report. We're from APM American Public Media.

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