Novo Nordisk, Eli Lilly Shares Drop as Trump Vows Weight-Loss Drug Price Cuts
Novo Nordisk and Eli Lilly experienced significant stock declines following President Donald Trump’s announcement about reducing the prices of weight-loss drugs. His comments came unexpectedly during a press conference at the White House.
Impact on Stocks
Trump specifically mentioned Novo Nordisk’s diabetes treatment, Ozempic, and referred to Wegovy, its anti-obesity drug. He suggested that prices could drop to about $150 from over $1,000. Following this statement, Novo Nordisk’s stock plummeted by 3.1%, closing at $54.37. In comparison, Eli Lilly’s shares fell by 2%, ending the session at $802.83.
Context of the Announcement
The press conference also aimed to discuss a significant deal with German pharma company Merck KGaA. This agreement involves lowering fertility drug prices to alleviate pharmaceutical tariffs, part of a broader strategy by the Trump administration to control drug costs.
Competitive Landscape
Eli Lilly produces rival medications such as Mounjaro and Zepbound, targeting diabetes and weight loss respectively. Despite the competition, Eli Lilly’s stock has demonstrated resilience, showing a 3% increase year-to-date after overcoming pressures earlier in the year.
Future of Negotiations
Dr. Mehmet Oz, who heads the Centers for Medicare and Medicaid Services, noted that negotiations regarding these weight-loss medications have not yet taken place. He mentioned, “The GLP category of drugs, which includes Ozempic, have not been negotiated yet.” The timeline for potential price reductions on these drugs remains unclear, though Trump expressed optimism about a rapid decrease.
- Stock Performance:
- Novo Nordisk: -3.1%, $54.37
- Eli Lilly: -2%, $802.83
Broader Implications
This uproar over drug pricing goes beyond just obesity medications. Recently, pharmaceutical leaders like Pfizer and AstraZeneca have begun to align their pricing strategies with Trump’s directives, offering lower costs in different categories. The administration has postponed a potential 100% pharmaceutical tariff to create room for negotiations.
With no set timeline for weight-loss drug price negotiations, both companies remain under pressure from upcoming market dynamics and regulatory changes.
