The stock of pharmaceutical company Eli Lilly (LLY) is down 1% on Nov. 17 after news broke that rival Novo Nordisk (NVO) has lowered the direct-to-consumer prices of its blockbuster weight-loss drugs.
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Danish pharma giant Novo Nordisk announced that it is lowering the prices of its weight-loss drugs Wegovy and Ozempic for cash-paying patients to $349 per month from $499 a month previously. However, the cost of the highest dose of Ozempic remains at $499 each month.
Novo Nordisk has also launched a new introductory offer, which allows cash-paying patients to access the two lowest doses of Wegovy and Ozempic for $199 a month for the first two months. After that introductory period, people move up to the new standard monthly direct-to-consumer price.
News of Novo Nordisk’s price cuts has LLY stock trending lower in early trading.
Price War?
Some analysts are warning that a price war could be emerging for weight-loss drugs as Novo Nordisk and Eli Lilly seek to attract more consumers to the medications through lower costs. Both companies have also struck deals with U.S. President Donald Trump’s administration to make their weight-loss drugs easier for Americans to access and afford, notably through coverage under Medicare and Medicaid.
The agreements struck with the Trump administration will see Eli Lilly and Novo Nordisk lower the prices the government pays for the drugs, introducing Medicare coverage of obesity medications for the very first time and offering discounted medicines on the government’s direct-to-consumer website “TrumpRx.”
The Trump administration has said that starting doses of Novo Nordisk’s Wegovy and Eli Lilly’s weight-loss drug Zepbound will be $350 per month on TrumpRx, but will trend down to $245 a month over the following two years.
Is LLY Stock a Buy?
The stock of Eli Lilly has a consensus Strong Buy rating among 20 Wall Street analysts. That rating is based on 18 Buy and two Hold recommendations issued in the last three months. The average LLY price target of $1,029.61 implies 1.27% upside from current levels.
