Novo Nordisk and Eli Lilly Lower Prices for Weight-Loss Drugs Amid U.S. Agreement

Shares in Novo Nordisk dropped nearly 3% on Friday after the Danish pharmaceutical giant and U.S. competitor Eli Lilly agreed to cut prices for their leading GLP-1 weight-loss drugs under a new deal with the U.S. government. The agreement, announced Thursday, will significantly reduce monthly costs for Wegovy and Zepbound to between $149 and $350, down from the current range of $500 to $1,000, benefiting Medicare, Medicaid, and cash payers. The deal also provides both companies a three-year tariff exemption.

Analysts see the price cuts as a short-term setback but potentially a long-term advantage. According to TD Cowen, the lower prices could temporarily pressure revenues but eventually increase sales volumes as affordability expands the drugs’ reach. At 09:24 GMT, Novo’s stock was down 1.8%, reflecting market concerns over the near-term financial hit.

The move comes as competition intensifies in the booming weight-loss drug sector. Novo, which launched Wegovy in 2021, once held the top spot as Europe’s most valuable listed company. However, it has since seen its market capitalization fall by 70%, affected by supply shortages and growing rivalry from Lilly’s Zepbound and compounded generic alternatives.

Novo expects the reduced prices to result in a “low single-digit” decline in global sales growth next year, offset by potential volume gains from Medicare programs over time. The agreement also includes provisions for starter doses of upcoming weight-loss pills from both firms, priced at $149 monthly through government channels and the TrumpRx site, pending FDA approval.

The FDA confirmed these pills are being reviewed under an expedited approval pathway. While Novo anticipates a decision by year-end, Lilly has yet to submit its oral version, orforglipron, for approval. Analysts at Jefferies noted that faster FDA reviews could narrow Novo’s head start in this competitive market.