U.S. equity markets reacted early Tuesday to a report that Novo Nordisk intends to sharply reduce list prices for several of its leading GLP-1 drugs. Eli Lilly (NYSE:LLY) shares dropped approximately 2.2% in morning trading, while shares of Novo Nordisk were down about 3%.
The reported plan would set the U.S. list price for both Wegovy and Ozempic at $675 per month beginning Jan. 1, 2027. For Wegovy, that represents a 50% cut versus its current list price; for Ozempic, the reduction amounts to about 34%. The pricing adjustments reportedly would also apply to oral formulations of these therapies, including Rybelsus.
These medicines sit at the center of rapidly expanding demand in the GLP-1 category, a key growth area within pharmaceuticals. Millions of patients take GLP-1 therapies for weight management and diabetes, but the high list prices have constrained wider uptake in some cases because of insurance coverage gaps and higher out-of-pocket costs for patients.
According to the report, Novo Nordisk is reducing list prices for the first time with the goal of easing costs for people enrolled in high-deductible health plans or those facing coinsurance calculations tied to list price. Jamey Millar, Novo Nordisk's executive vice president of U.S. operations, was quoted as saying, "Our hope is that reduced prices will lead to better access and affordability."
Market participants interpreted the reported price moves as intensifying competition between Novo Nordisk and Eli Lilly in the GLP-1 market. Observers note that a sizable cut to list prices by one major manufacturer could place pressure on rivals to revisit their own pricing strategies for competing weight-loss and diabetes products.
While the reported reductions aim to lower the cost burden for some patients, the development also triggered an immediate market reaction, with investors marking down shares of both companies. The reported timeline, scope of the cuts and application to oral therapies are central elements of the announcement that market participants focused on.
Implications: The reported price adjustments are likely to affect competitive dynamics in the GLP-1 segment, influence payer negotiations, and factor into investor assessments of revenue trajectories for manufacturers of these therapies.