CMMI’s GLP-1 Model: Why GLP-1s are a Policy Test Case for High-Cost Drugs
GLP-1 therapies have rapidly moved from niche treatments for type 2 diabetes to household names shaping conversations about obesity, cardiovascular risk, and long-term population health. Alongside their rapid uptake has come intense attention from policymakers and payers, who are weighing how to balance affordability, access, and evidence.
For manufacturers and stakeholders across the life sciences sector, GLP-1s are not just a story about one therapeutic class. They are emerging as a test case for how drug policy experiments may shape future models.
What Makes GLP-1s Unique
GLP-1s sit at the intersection of some of the most pressing dynamics in U.S. health care. They are clinically effective, relevant to a large population, and high cost. That mix creates real pressure: demand is surging, prices are high, and payers and policy makers are under pressure to find new ways to manage affordability.
At the same time, these drugs target conditions that are central to national population health goals, including obesity, diabetes, and cardiovascular disease. GLP-1s are being closely watched as a model for how payers may approach future expensive therapies for common chronic conditions. The decisions being made today, from coverage rules to reimbursement experiments, may serve as a blueprint for how future high-impact drugs are evaluated and adopted.
Current CMS Coverage
Right now, Medicare does not cover drugs “when used for weight loss”, a policy written in statute, but it can cover GLP-1s when used for other indications. Under the Biden Administration in late 2024, CMS proposed to reinterpret its statutory authority to allow Part D and Medicaid coverage for obesity treatment, which it distinguished from weight loss. This would have been a massive change; however, that reinterpretation did not move forward under the new Trump administration. But that isn’t the end of the story on the government side.
Upcoming CMMI Model
According to reporting from this summer, the CMS Innovation Center, or CMMI, is planning a pilot that would let state Medicaid programs and Medicare Part D plans cover GLP-1 drugs for weight loss. The model will test whether pairing GLP-1 access with lifestyle and behavioral supports can improve outcomes and offset downstream costs.
Participation in the model would be optional, and per available information, it would last for five years, with potential start dates of April 2026 for Medicaid and January 2027 for Medicare. These details are still preliminary, and no formal model announcement has been made.
Unanswered Questions About the CMMI Model
Details on the model’s design would be released following a formal announcement of model testing. Many important questions about this test are outstanding:
Eligibility Criteria: Which beneficiaries are eligible? Leaked materials indicate that all beneficiaries under participating Part D plans would be eligible. What about under Medicaid? Would beneficiaries have to meet specific requirements like BMI thresholds or comorbidities?
Pricing and Payment: What model-specific changes would there be to how GLP-1s are reimbursed? Will the model include value-based or outcomes-based arrangements?
Measuring Quality and Costs: What specific outcomes (e.g., weight loss, cost savings, cardiovascular events, adherence) the model will use to determine success and how they will be measured.
State Variation: How might Medicaid design differ across participating states?
Operational Design: How will lifestyle elements be integrated and reimbursed?
Impact of CMMI Model
This five-year test would answer a critical question: do GLP-1s, combined with lifestyle supports, improve health enough to justify the cost? The results won’t just matter for Medicare and Medicaid. They will also send signals to commercial payers about how to handle the next wave of expensive therapies.
How CMS designs and runs this model will establish important precedents for how CMS and CMMI will handle future high-impact therapies. Depending on the results, several outcomes are possible:
Broader Access: Millions of Medicare and Medicaid beneficiaries could gain coverage for GLP-1 therapies.
Health Impact: Expanded access could drive measurable improvements in obesity, diabetes, and cardiovascular disease outcomes.
Cost Considerations: The model may demonstrate health benefits without offsetting cost savings, or it could show reductions in spending alongside better outcomes.
Policy Expansion: If both cost and quality improve, the model could be scaled nationally, shaping the playbook for future drug policy experiments.
Looking Ahead
GLP-1 policy experiments are setting the stage for what comes next in drug policy, pricing, and access. They are a bellwether for how high-cost, high-demand drugs will be evaluated in a system that is moving toward value-based transformation.
At Coral Health Advisors, we understand CMMI models, and we understand drug policy. We partner with manufacturers, associations, and other stakeholders to anticipate regulatory shifts, shape model participation strategies, and align coverage and pricing decisions with evolving CMS policy. To explore how GLP-1 experiments may shape your work, reach out to Coral's Life Science practice lead Alison Falb.