At the end of the 2025 legislative session Governor Glenn Youngkin vetoed language that would have expanded weight loss drug access to those on Medicaid. Now he’s promising a negotiated fix to the problem, but the public likely won't learn much about those negotiations.
Speaking at the announcement of a $5 billion Eli Lilly drug production facility, Governor Glenn Youngkin said 2025 budget language that would have allowed Medicaid recipients more access to blockbuster weight loss drugs would have stifled cost-cutting negotiations between the state's Medicaid agency and drug producers.
“We are undertaking that process now and I would expect we’ll have a lot to say about that come December in my budget speech,” Youngkin said.
GLP-1s, most famously Ozempic, mimic brain chemicals to make you think you’re less hungry and slow food digestion to keep you full longer. Their use to treat diabetes and weight loss has grown as the success of the drug has become better documented. But its high price— over $1,000 a month— can put dents in state budgets.
According to state reports, in 2023 Virginia spent $36 million for the drug to treat obesity, about $109 million for diabetes. In 2024, obesity treatment remained about the same while diabetes treatment costs jumped to nearly $140 million. House appropriations staff said 2025 is expected to see about a 30% increase for diabetes while obesity costs could nearly double.
Virginia’s legislature is one of the few to grant coverage under Medicaid for both diabetes and obesity; most states only cover it for diabetes. Youngkin’s veto, challenged originally by the legislature but abandoned after consulting legal counsel, stayed in place keeping access at existing levels.
"The General Assembly’s action to expand the use of these drugs for a variety of new patients created a significant financial burden that continues to increase over this biennium," Youngkin wrote in his veto explanation of the effort which would have reduced the body mass index required to qualify for GLP-1s to treat obesity.
Democratic Delegate Rodney Willet said the proposed expanded access came out of the bipartisan rural healthcare summit which agreed the price was worth it.
“By eliminating obesity, you eliminate the other things and ultimately save money," Willet said. "It's clearly the case of spending some money to save a lot more money, but more importantly, saving lives.”
As for the drug negotiation process, Doug Gray with the Virginia Association of Health Plans said the practice is fairly common; the state’s Medicaid agency, the Virginia Department of Medical Assistance Services, or DMAS, will negotiate directly with drug providers to get a rebate. When the drugs are purchased under Medicaid, a rebate is sent back to DMAS and put toward the state’s health costs.
According to recent state numbers, that rebate was over $670 million in the last year.
“DMAS chooses the drugs and negotiates with manufacturers, and keeps the rebates,” Gray explained. “And the rebates are how they ensure they get the lowest net cost for the drug”
But to get the lowest cost, Gray said those negotiations are kept secret. The public may learn the total rebate via state reporting, but rebates for individual drugs are not available.
“The drug manufacturer does not want the public or their competitors to know the rebate that they offered.” Gray said. “Keeping it secret may lead to getting the lowest price.”
"All drugs included in DMAS’s preferred drug list, known as the common core formulary, are subject to regular negotiations," a spokesperson for Youngkin said. "These negotiations are standard for DMAS and align with practices across state Medicaid agencies."
Willet said he was open to Youngkin’s negotiation on drug prices, but he stressed the legislature would bring the language to expand GLP-1 access back in 2026 either way.
“It certainly fits a theme where we need to be leveraging or buying power to do better and reduce cost,” he said. “[But] we had everyone on the same page, peace in the valley, and a direct recommendation from the Rural Healthcare Committee."
"We need to go forward with [the BMI reduction]," Willet added. "That's the law, that's where everyone wants to be and it's gonna save lives.”
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
