The class of medication referred to as GLP-1s is back in the news. The focus of these is primarily diabetes, but the drugs have become popular for the ancillary purpose of drug-induced weight loss. See Whoa Nelly (June 2025). The rapidly expanding use of these drugs and their market costs have created impacts on state budgets.
Various federal legislation includes Medicare negotiation of some medication prices (the Inflation Reduction Act). The same legislation more specifically impacts insulin costs in terms of patient cost sharing. Eligibility for Medicare and Medicaid may be affected by the One Big Beautiful law recently signed, and various states may make changes in their administration of these programs.
The discussion in Whoa Nelly provides some illustration of the cost of medication in our world generally. Those who are familiar with the world of workers' compensation will readily recognize that obesity is a potential comorbidity that requires attention in the process of treating a work injury. See Obesity yet Again (January 2023), and the posts it cites.
In response to the price of obesity drugs, various states have sought solutions, according to the Associated Press. There have been efforts to constrain patient populations, restricting the use of this diabetes medicine to diabetes patients. That is the approved use, but many seek this for the ancillary weight control benefits.
Then came the idea of simply taking the medication, using a process similar to the government taking of real property, called eminent domain. Some have perceived an increase in the breadth of eminent domain with the U.S. Supreme Court decision in Kelo v. New London, 545 U.S. 469 (2005). This is a complex topic that pits the interests of private landowners against the interests of government.
Essentially, Kelo concluded that a government can seize private property and transfer it to a private person if there is a financial benefit to the government. Until 2005, the common use of eminent domain was to seize real estate for clear government purposes such as post offices, highways, courthouses, and similar.
A corollary to eminent domain is now being pursued by Connecticut (coincidentally the state in which Ms. Kelo lost her real property). According to Yahoo, a bill signed by Governor Lamont in July will direct attention at reducing the state's cost for "GLP-1 drugs, similar to Novo Nordisk's (NVO) Ozempic and Wegovy and Eli Lilly's (LLY) Mounjaro." Though this is being led by Connecticut, the implications are broader.
The Connecticut bill will result in the state "petition(ing) the US Health and Human Services Department (HHS)" to essentially seize the property rights of medication manufacturers. While this is similar to eminent domain, it is statutory, "a section in the US Patent Code, 28 US 1498."
The effect would be for the federal government to "claim ownership of the patent(s)" for various medications. This would allow the government to determine and control the price of what it consumes. Instead of paying a "market price" to obtain these medications, or negotiating its own price, it would dictate the price charged by manufacturers.
If the current owners of those patents elect not to produce at the established price(s), then the government would "contract with generic manufacturers to produce a version of the drugs in exchange for royalties" that the government deems fair.
The implications of this are broad. In one perspective, the cost of medications might be broadly impacted. This example of significant medication cost might lead to similar government involvement in a broader spectrum of medication. Those who invest in the research and development of remedies may be less inclined if they perceive a greater potential for government seizure and moderated profits.
In another perspective, the financial impact of GLP-1s might decrease markedly. The budgetary relief on government might be mirrored for health insurers and other consumers, affording less sacrifice in other spending.
Some may see the potential for less focus on healthy diet and exercise if the GLP-1s become inexpensively available. In short, why eat right and care for the body when a cheap, simple, pharmaceutical path is available?
What of the potential for liability? GLP-1s have been researched and developed since 1984. The first Food and Drug Administration approvals came in 2005, and yet the popularity has been more recent still. As broader populations use these substances, is there potential for as yet undiscovered side-effects or other detriments?
Some will see this employment of section 1498 as a government overreach. Others will see it as a necessity. The discussions and perspectives will be intriguing as the coming months bring broader debate of the Connecticut proposal.
