By Jacob Gronholt-Pedersen and Maggie Fick COPENHAGEN (Reuters) -Shares in Novo Nordisk fell as much as 3% on Friday after the Danish drugmaker and U.S. rival Eli Lilly agreed with the U.S. government to lower prices of their blockbuster GLP-1 weight-loss drugs. The agreement announced late on Thursday, covering Novo’s Wegovy and Lilly’s Zepbound, will reduce […]
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Novo Nordisk shares fall after Trump deal to slash obesity drug prices
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By Jacob Gronholt-Pedersen and Maggie Fick
COPENHAGEN (Reuters) -Shares in Novo Nordisk fell as much as 3% on Friday after the Danish drugmaker and U.S. rival Eli Lilly agreed with the U.S. government to lower prices of their blockbuster GLP-1 weight-loss drugs.
The agreement announced late on Thursday, covering Novo’s Wegovy and Lilly’s Zepbound, will reduce monthly prices for U.S. government programmes, including Medicare and Medicaid, and cash payers to between $149 and $350, down from $500 to $1,000 now.
The deal also grants the companies a three-year relief from tariffs.
NEAR-TERM HEADWIND, LONGER-TERM BOOST?
Analysts expect the price cuts to impact short-term revenue, but potentially boost volumes in the longer term.
“These price cuts represent a near-term headwind laid on top of competitive pressures, but in the medium to long term, they may boost volumes,” TD Cowen analysts said in a note.
Novo’s shares were down 1.8% at 0924 GMT.
The price reductions come as Novo faces increasing competition in the weight-loss drug market, where Lilly’s Zepbound and compounded copycat drugs have gained ground.
Novo, first to market when it launched Wegovy in 2021, briefly became Europe’s most valuable listed company as demand boomed, but has seen its market value slump by 70% since last year amid supply constraints and commercial challenges.
Novo said the lower prices would have a negative “low single-digit” impact on global sales growth next year, while bigger volumes under Medicare were expected in the mid- to long-term.
The agreement also includes provisions for starter doses of weight‑loss pills under development by both companies, which will cost $149 per month through government programmes and the White House’s TrumpRx site, contingent on regulatory approval.
The U.S. Food and Drug Administration confirmed that the pills are being considered for expedited review under a new pathway aimed at accelerating approvals. While Novo anticipates an FDA decision on its pill by the end of the year, Lilly has yet to submit its pill, orforglipron, for approval.
Jefferies analysts said the expedited review process would “likely (be) perceived as a headwind for Novo’s launch” as it could limit its head-start over Lilly.
(Reporting by Jacob Gronholt-Pedersen, Maggie Fick and Bhanvi Satija. Editing by Tomasz Janowski and Mark Potter)