Danish pharmaceutical giant Novo Nordisk will cut U.S. list prices of obesity drug Wegovy and diabetes treatment Ozempic by up to 50% starting next year.
According to The Wall Street Journal on Dec. 24, Novo Nordisk will standardize list prices for Wegovy and Ozempic at $675 per month. This represents discounts of 50% and 34% respectively from current prices. The same pricing will apply to oral medications including Rybelsus, effective Jan. 1.
The price adjustment is an attempt to reclaim market share lost to Eli Lilly. The two companies have been competing on price through direct website sales and drug pricing agreements with the Trump administration. The strategy aims to capture demand in the rapidly expanding GLP-1 market with lower prices.
Millions currently take GLP-1 medications, but high prices have limited access for uninsured patients and those facing significant out-of-pocket costs. According to TD Cowen, the global GLP-1 market for obesity and diabetes treatment is worth approximately $72 billion and is projected to reach $139 billion by 2030.
However, Novo Nordisk has faced setbacks including its former CEO's departure, board restructuring, and workforce reductions following management missteps. The company lowered its sales outlook this year and suffered a blow when clinical trials for its next-generation obesity drug failed. Its stock has been declining.
The company disclosed that clinical results for CagriSema, its next-generation obesity drug candidate, failed to demonstrate superior weight-loss efficacy compared to Mounjaro. Shares plunged more than 16% in a single day to their lowest level since 2021. Year-to-date losses have reached 23%. Eli Lilly shares, meanwhile, rose approximately 5% over the same period.
Novo Nordisk has characterized the GLP-1 market as closer to consumer goods than traditional pharmaceuticals. Yet high prices impose substantial costs on consumers. A survey of 2,000 Americans with GLP-1 experience by pharmacy benefit manager Navitus Health Solutions found approximately 70% said cost concerns affected their ability to start or continue treatment.
Industry analysts suggest Novo Nordisk played the list price reduction card as competitors including Hims & Hers threatened market share with cheaper compounded generic versions.
The list price cuts coincide with implementation of federal Medicare drug price negotiations. Negotiated Medicare prices for Ozempic and Wegovy are set at $274 per month.