🩺 Health
US Drug Spending Is About to Cross $1 Trillion. One Drug Class Is Responsible for a Third of the Growth.
GLP-1 medications hit $132 billion in US spending in 2025, accounting for 14% of all prescription drug expenditures and nearly a third of all growth. Obesity dropped 3.5 percentage points. We calculated the net cost to the healthcare system: about $106 billion per year that no budget model predicted.
One trillion dollars. That is what the United States will spend on prescription drugs in 2026, according to the American Society of Health-System Pharmacists' annual expenditures report, crossing the threshold for the first time in the nation's history. Spending rose 12.7% in 2025 to $915 billion, one of the fastest growth rates in two decades, outpacing both overall healthcare spending and the broader economy, blowing past a milestone that analysts had penciled in for 2029 at the earliest. Projected 10-to-12% growth for 2026 pushes the number past seven figures. Nobody saw it coming this fast.
One drug class did this: GLP-1 receptor agonists, the weight-loss and diabetes medications sold as Ozempic, Wegovy, Zepbound, and Mounjaro, accounted for $132 billion in 2025 spending. Fourteen percent of all US prescription drug expenditures and nearly one-third of all spending growth. Semaglutide topped $60 billion and tirzepatide topped $60 billion, each more than double the $29 billion spent on apixaban, the third-highest drug in America. And the ASHP figures do not include direct-to-consumer sales through telehealth platforms, meaning the true market is larger still.
"At $132 billion, this single class of drugs accounted for nearly one-third of all growth and is moving the entire market," said Eric Tichy, lead author of the ASHP report and division chair of supply chain management at Mayo Clinic. "And we are still on the steep part of the curve."
The Adoption Curve
He is not exaggerating. A Gallup survey of 5,065 adults conducted between May 28 and June 5 found that 11% of American adults are currently taking GLP-1 medications for weight loss, up from just 3% two years ago. Fifteen percent said they had used the drugs at some point, up from 6%. That is an adoption curve that technology companies fantasize about and pharmaceutical companies have never produced in a century and a half of selling pills.
Eleven percent of American adults is approximately 29 million people. At $132 billion in total class spending, the average annual cost per GLP-1 user works out to roughly $4,550 per year, about $379 per month, though that average conceals a wide range because brand-name Wegovy lists at roughly $1,350 per month while compounded semaglutide through telehealth companies runs $150 to $400 and one-third of compounded users told Gallup they switched from brand-name medications primarily because they could not afford to stay on them.
Adoption will only accelerate from here. Oral Wegovy arrived in December 2025, eliminating the needle barrier. Eli Lilly's orforglipron (Foundayo) added a second oral option in April. Retatrutide, Lilly's triple-hormone agonist that mimics GLP-1, GIP, and glucagon simultaneously, is expected to seek FDA approval this year, with clinical data suggesting even larger weight-loss effects, and researchers are studying GLP-1s for Alzheimer's disease, substance use disorders, chronic joint pain, and obstructive sleep apnea, each new indication expanding the eligible population by millions.
What the Obesity Reduction Actually Saves
Here is the calculation nobody has run. The US adult obesity rate peaked at 39.9% in 2022 and has fallen to 36.4% in 2026, a decline of 3.5 percentage points. With roughly 264 million US adults, that drop represents approximately 9.2 million fewer obese adults than the peak trajectory predicted.
The CDC estimates excess annual medical costs attributable to obesity at $2,505 per obese adult in 2019 dollars, which adjusts to approximately $2,850 in 2026 after medical cost inflation. So: 9.2 million fewer obese adults times $2,850 equals roughly $26.2 billion per year in avoided medical costs from reduced obesity.
| Category | Amount |
|---|---|
| Total GLP-1 spending (2025) | $132.0B |
| Estimated obesity-related savings (9.2M fewer obese adults × $2,850) | -$26.2B |
| Net new cost to healthcare system | $105.8B |
The drugs cost $106 billion more per year than they save, a gap that exceeds Ecuador's entire GDP and is larger than the combined annual revenues of Netflix, Starbucks, and Nike.
The Paradox
This is not because the drugs fail; they work brilliantly. The FLOW trial published in the New England Journal of Medicine showed semaglutide reduced kidney disease progression by 24%, cardiovascular death by 29%, and all-cause mortality by 20% in patients with type 2 diabetes and chronic kidney disease. The SELECT trial demonstrated a 20% reduction in major cardiovascular events. Wegovy treats MASH and Zepbound treats sleep apnea. By every clinical measure, GLP-1s rank among the most significant pharmaceutical innovations of the century.
The Independent Institute for Clinical and Economic Review found GLP-1s cost-effective: health benefits justify the prices. Good. But researchers at the University of Mississippi pointed out the distinction that matters: "cost-effective" does not mean "cost-saving" for the people writing the checks, and ICER's own budget impact threshold, the point beyond which a drug threatens to destabilize insurance systems, sits at $821 million, a number GLP-1s exceed by a factor of 160.
"The patient population eligible for this medication is so large," said Sujith Ramachandran, an associate professor of pharmacy administration at the University of Mississippi. "Even if the medications themselves represent good value for society, that does not mean we, as a society, can take the impact of how many individuals would use this."
What 20% Adoption Looks Like
If GLP-1 adoption continues toward 20% of adults, a plausible trajectory given the current doubling rate and the arrival of oral formulations that eliminate the needle barrier, here is what the math produces.
| Adoption Rate | Est. Users | Est. Annual GLP-1 Spend | Est. Obesity Reduction | Est. Savings from Reduced Obesity | Net New Cost |
|---|---|---|---|---|---|
| 11% (current) | ~29M | ~$132B | 3.5 pp | ~$26B | ~$106B |
| 20% | ~53M | ~$241B | ~6.4 pp | ~$48B | ~$193B |
| 30% | ~79M | ~$360B | ~9.5 pp | ~$71B | ~$289B |
At 30% adoption, GLP-1s alone would consume more than a third of the nation's total drug spending. Net new cost to the system: $289 billion per year. For the math to break even, obesity would need to fall approximately 15 percentage points from peak, from 40% down to 25%, requiring roughly 40 million adults to not just start GLP-1s but stay on them long enough for the full downstream savings in cardiovascular events, kidney disease, and diabetes complications to materialize, a condition that most studies suggest rarely holds because patients who stop GLP-1s regain weight within a year.
Where the Money Comes From
Medicare's new Bridge Prescription Drug Demonstration Program, launched July 1, offers GLP-1s at a $50-per-month copay. Sounds affordable. But the copay does not count toward Part D's $2,100 annual out-of-pocket cap or the deductible, which means over an 18-month demonstration a beneficiary pays $900 in costs that never bring them closer to catastrophic coverage protection, an expense that hits hardest among the one in four Medicare beneficiaries who earned less than $24,600 in 2024.
Employers are absorbing most of the rest, because clinic spending, where most GLP-1 prescriptions are filled, grew 19% in 2025, the fastest of any care setting. Because employers ultimately bear these costs through premiums, the GLP-1 spending surge translates directly into benefits budget pressure that was already growing faster than wages.
What This Does Not Prove
Our net-cost calculation attributes the entire 3.5-percentage-point obesity decline to GLP-1 adoption. In reality, other factors contribute to obesity trends: cultural shifts, dietary changes, exercise patterns, and economic conditions all play roles. In practice, the true GLP-1-attributable obesity reduction is likely lower, which would make the net cost to the system even larger than our $106 billion estimate. We also assumed a linear relationship between adoption and obesity reduction, which oversimplifies the dynamics: not every GLP-1 user was obese before starting, and not every obese person who does not use GLP-1s would have remained obese. Additionally, the downstream savings from reduced cardiovascular events, kidney disease, and MASH take years to materialize, while the drug costs are immediate. A 10-year discounted cash flow analysis would produce a different picture than our annual snapshot, though we lack the longitudinal data to construct it reliably.
The Strongest Case Against This Analysis
The best counterargument, stated at full strength: our analysis captures only direct medical cost savings and misses the broader picture entirely. Obesity costs the US economy an estimated $1.72 trillion annually when you factor in productivity losses, disability payments, military readiness, and premature death, according to a 2024 Milken Institute analysis. If GLP-1s are contributing to a 3.5-point obesity decline, the total economic value of that reduction could exceed $150 billion per year, which is more than the drug cost itself. Under this framing, GLP-1s generate a net economic benefit, and the problem is purely distributional: employers pay for the drugs but society captures the productivity gains, insurers absorb the spending but taxpayers avoid the disability claims, and the math works at the macro level even though it fails for every individual payer staring at a 19% increase in clinic spending on their quarterly report.
What You Can Do
If you are an employer evaluating your health benefits plan for 2027, request a GLP-1-specific spending forecast from your pharmacy benefits manager. The ASHP data shows you are likely to see 15-to-20% annual increases in drug benefit costs driven almost entirely by this class. Ask for the offset data too: are your GLP-1 users generating fewer claims for cardiovascular events, sleep apnea treatment, or diabetes management? If your PBM cannot answer that question, the spending growth is unmanaged.
If you are a Medicare beneficiary considering the Bridge Prescription Drug Demonstration, calculate the total 18-month cost including the copays that fall outside your Part D benefit structure. For beneficiaries with incomes near or below $24,600, the program may be less accessible than the $50-per-month headline suggests.
The Bottom Line
US prescription drug spending will cross $1 trillion in 2026, and a single drug class drove a third of the acceleration. GLP-1 medications hit $132 billion last year, more than every cancer drug in America combined. The clinical value is undeniable: 20-to-29% reductions in cardiovascular death, kidney disease, and mortality. But 40% of American adults are obese, 11% are already on these drugs, and the curve is still steepening. We calculated the net impact: roughly $106 billion more in drug spending than the system saves through reduced obesity, and that gap will widen as adoption grows. The drugs work but the financing does not, and the question that no payer, no politician, and no actuarial model has answered yet is what happens to a healthcare system built for treating disease when the best drug ever made for preventing disease is something a hundred million people could reasonably take forever.