Novo Nordisk announced significant price reductions for its weight-loss drug Wegovy, sending its stock soaring as competition in the obesity drug market intensifies.
Novo Nordisk Price Cut Announcement Sends Shares Up
Europe’s largest pharmaceutical company, Novo Nordisk, has revealed a major price cut for its popular weight-loss treatment, Wegovy, offering it for less than half of its current price. This strategic move follows a similar price reduction by Eli Lilly, its biggest US competitor, igniting a fierce price war in the rapidly expanding obesity treatment market.
Novo Nordisk shares jumped 3.8% in US markets following the announcement, while Eli Lilly’s stock also gained 2%. Despite the increase, Novo Nordisk’s stock has lagged behind Eli Lilly’s performance, with Novo Nordisk’s shares up 4.2% this year, compared to a 19% rise for Eli Lilly.
The Obesity Drug Price Battle Heats Up
Both Novo Nordisk and Eli Lilly manufacture GLP-1 drugs, which are used in obesity treatments. The cost of these medications has long been a point of contention, with retail prices often exceeding $1,300 per month before insurance and rebates. To address this, the US Food and Drug Administration (FDA) has allowed compounding pharmacies to offer cheaper versions of these drugs in cases of shortages.
However, with the FDA declaring that shortages of Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound have ended, patients will no longer have access to these compounded alternatives. This shift has prompted both pharmaceutical giants to reduce their prices, further intensifying competition.
NovoCare Pharmacy Offers Wegovy for $499
In response, Novo Nordisk has launched its direct-to-patient online pharmacy, NovoCare, offering Wegovy for $499 per month to cash-paying customers. This price cut is aimed at making the drug more affordable for patients who lack insurance coverage, as many large US employers do not offer insurance for weight-loss medications.
While the company emphasized that 90% of Wegovy patients with insurance pay little to no cost, this new initiative is specifically designed for those who pay out-of-pocket.
Novo Nordisk’s Cautious Outlook for 2025
Despite a strong fourth-quarter performance, Novo Nordisk provided a cautious outlook for 2025. The company expects slower growth as competition from Eli Lilly heats up. With the patent for Wegovy set to expire in the early 2030s, Novo Nordisk is investing heavily in research and development, including its next-generation obesity treatment, amylcretin, which has shown promising results in clinical trials.
However, the company’s profit margins have been squeezed due to price reductions and rising expenses, prompting investors to keep a close eye on future earnings.