Are GLP-1 drugs prescribed for weight loss becoming too outsized a line item for continued coverage through the state Medicaid program? That’s what Gov. Dan McKee’s fiscal year 2027 budget suggests.
Medicaid costs roughly quadrupled between the start of fiscal year 2024 and the end of fiscal year 2025 in per-member monthly payments to Medicaid managed care plans, according to the state’s Executive Office of Health and Human Services, which administers Rhode Island’s Medicaid program.
The agency’s September budget request to the governor’s office attributed the increased use of expensive weight-loss meds with brand names like Wegovy, Zepbound and Saxenda to an explosive rise in demand.
Removing GLP-1s from Rhode Island’s Medicaid formulary for weight loss would save $6.3 million in general revenue, according to McKee’s proposed budget introduced on Jan. 15. Coverage of the drugs for weight loss would end on Oct. 1 under McKee’s plan. Medicaid recipients prescribed GLP-1s for diabetes would not be affected by the proposal.
The drugs have shown remarkable efficacy in treating obesity in addition to their utility in controlling Type 2 diabetes. Patients in large clinical trials for GLP-1s lost an average of 15% to 20% of their body weight, depending on the drug they were given.
But the drugs are considered optional in Medicaid programs; the feds do not demand that states ensure coverage.
“While quite efficacious, these medications are quite expensive, with list prices ranging from $12,000 annually to roughly $16,000 annually as of March 2025,” according to the September budget request from the state’s health and human services office.
According to a KFF analysis, as of November 2025, Rhode Island was one of only 13 states to cover GLP-1s for obesity through Medicaid. States which previously had coverage — such as California, New Hampshire, Pennsylvania and South Carolina — have also eliminated GLP-1 coverage for weight loss in recent months.
Kerri White, a spokesperson for the Executive Office of Health and Human Services, said that McKee’s initiative is the same policy suggestion the agency offered in its requested budget last fall. But the ultimate savings could change depending on new enrollment data and pricing when state budget crunchers meet in May.
“This is mostly an administrative change to contracts and rates,” White wrote in an email, noting the drugs would be struck from the preferred drug list. There would be no grandfathering or exemptions for existing patients, she added.
In state fiscal year 2025, there were 24,971 prescriptions for GLP-1s for obesity for Rhode Island Medicaid beneficiaries, although duplicates may lurk in those numbers as patients can switch medications or change doses, White noted.
Biggest breakthrough since statins
GLP-1s are classed as receptor agonists, or drugs that activate at specific receptors in the body. They help raise insulin and suppress the hormone glucagon, which plays a role in both appetite and Type 2 diabetes. Additionally, they slow gastric emptying, which means people feel full longer and ultimately eat less.
The GLP-1s mimic the body’s hormonal pathways, amplifying signals the body already uses to communicate things like hunger and fullness. And the GLP-1s tend to follow a more sophisticated script compared to older weight-loss drugs like anorectics, most of which are essentially stimulants or amphetamine derivatives. Anorectics came with much larger menus of side-effects, such as the notorious Fen-Phen, yanked from the market in 1997 after worries about heart valve damage.
The GLP-1s are indeed special, says Dr. Amy Nunn, executive director of the Rhode Island Public Health Institute and a professor at Brown University’s School of Public Health.
“There hasn’t been a medical innovation that’s been this impactful, really, since the advent of statins,” Nunn said in a phone interview, referring to the cholesterol-lowering drugs that premiered in 1987 and were prescribed to an estimated 92 million Americans in 2018 and 2019.
Nunn, also the CEO of Providence’s LGBTQ-friendly community clinic Open Door Health and a State House regular for her testimony on bills promoting healthy eating and lifestyle changes, is displeased with McKee’s bid to axe the drugs from the Medicaid lineup, calling it an “all or nothing proposal.”
“That’s not the way to address a big public health problem,” Nunn said. “The big elephant in the room is the medications are too expensive.”
The GLP-1 market has ballooned in recent years, as drugmakers race to find new variants and thereby seize a piece of a lucrative industry. The GLP-1 that is often used as shorthand for the entire drug family — Ozempic — is officially indicated only for Type 2 diabetes, though it remains prescribed off-label even after its now-numerous sibling drugs entered the market.
The drugs have proven to be remarkable cash cows for their manufacturers. Novo Nordisk, the Danish pharma giant responsible for both Ozempic and Wegovy, had a market cap of $570 billion in 2023, larger than the economy of its home country Denmark. The same year, the company paid a $2.12 billion tax bill, more than any other Danish taxpayer. (The company endured new woes, and cut 9,000 jobs in 2025, however, partly due to increasing competition.)
Why not team up with other states for better pricing?
Strange bedfellows tend to congregate in the shadows of drugmakers’ towering profits. Nunn — who fought last year against President Donald Trump’s administration in federal court over research funding cuts — said the Oval Office made the right choice in its recent challenge to drugmaker profits.
“I think what President Trump has done is commendable, because so many people need those medications, and he’s right that they are making too much money, and people can’t get the medications that they need,” Nunn said.
Nunn added that Trump’s strong-arming pharma giants may have been “for political reasons, because older Americans are more likely to vote. But I think it was a bold and much needed policy move,” she said.
That’s not the way to address a big public health problem. The big elephant in the room is the medications are too expensive.
Nunn said that patients tend to gain weight back if they go off the medications, and that McKee’s plan leaves patients without a transition plan in place.
Nunn said Rhode Island should form purchasing partnerships with bigger states like Massachusetts or California to get better prices from the pharmaceutical industry.
“This is what they did for hepatitis medications, and they did for other medications,” Nunn said. “This is what the VA does. So that’s what needs to happen.”
She continued: “ We don’t have to accept those prices. We can challenge pharmaceutical companies about their prices rather than cutting off patients.”
Health disparities and long-term impact
Higher rates of obesity are observed among low-income Rhode Islanders and communities of color. The adult obesity rate is about 31% statewide, but almost 36.8% among non-Hispanic Black and 36.1% among Hispanic Rhode Islanders. Non-Hispanic white adults have an obesity rate of 30.3%, according to CDC data.
Additionally, 2022 state data showed Rhode Islanders in households earning under $25,000 have an obesity rate of almost 36%, while those earning more above $50,000 sit at 28.3%.
Ending obesity coverage for GLP-1 obesity drugs could improve the state’s finances but might also “result in health inequities and less comprehensive coverage,” the state’s health and human services agency acknowledged in its September budget request.
The economics of GLP-1s have undergone several heavy-duty studies and overviews, including one in October 2024 by the U.S. Congressional Budget Office, which suggested the cost of the drugs could still exceed the savings from treating obesity and its attendant health conditions. Additionally, the drugs could increase the government’s net spending on Medicare, through at least 2044.
The budget office estimated about $35 billion in increased net costs from 2026 to 2034, noting healthier Medicare members would not offset the overall costs.
“Relative to the direct costs of the medications, total savings from beneficiaries’ improved health would be small — less than $50 million in 2026 and rising to $1.0 billion in 2034,” the report noted.
Another 2025 survey published in JAMA Health Forum noted that, should Medicare pay for the drugs, it could avoid spending a hypothetical $18.2 billion on obesity-related health expenditures over 10 years — while dishing out $65.9 billion annually on the GLP-1s by year 10, thereby negating any savings.
The Institute for Clinical and Economic Review deemed GLP-1s lacking in cost effectiveness for obesity management in 2022. The market had changed enough by the time the institute revisited the topic in 2025 and found some drugs cost-effective at certain prices and formulations.
The institute recommended that existing GLP-1 makers, “and those with products in the pipeline, should consider steep discounts to prices in exchange for higher volume.”
“What has to happen is we have to move from a low-volume, high-price business model, to a high-volume, low-price business model,” Nunn said. “The marginal cost of producing a little more of medications is very small.”
“The pharmaceutical industry, they hem and haw about how they won’t make money, and they have made, like, a trillion dollars on these products,” Nunn continued. “And so that’s just silly.”
McKee’s proposal will undergo months of legislative questioning, editing and restructuring before the General Assembly’s final version emerges sometime in June. The new fiscal year begins July 1.
This story was originally published by the Rhode Island Current.
