Weight-Loss Drug Stocks Tumble on Trump Pricing Pressure Report
Novo Nordisk and Eli Lilly shares fall after a report details potential negotiations to slash U.S. drug prices by nearly 90%, threatening a high-growth sector.
Shares of major weight-loss drug manufacturers Novo Nordisk (NVO) and Eli Lilly (LLY) faced significant selling pressure following a report that former President Donald Trump is negotiating a deal that could slash the U.S. prices of blockbuster obesity treatments.
The Wall Street Journal reported that Trump's team is in discussions with Novo Nordisk, the maker of Ozempic and Wegovy, to potentially offer some of its popular weight-loss drugs for as low as $149 per month. Such a price would represent a staggering discount of nearly 90% from the current U.S. list price of Wegovy, which is approximately $1,350 for a monthly supply.
News of the potential deal sent immediate tremors through the healthcare sector, which has seen valuations for Novo Nordisk and Eli Lilly soar to a combined market capitalization of over $1 trillion on the back of unprecedented demand for their GLP-1 agonists. In recent trading, Novo Nordisk shares were down 1.5%, while Eli Lilly, which manufactures the competing drugs Mounjaro and Zepbound, also saw its stock decline.
The negotiations introduce a significant political risk to one of the pharmaceutical industry's most profitable ventures. The high list prices of these drugs in the U.S. compared to other countries have been a point of intense political scrutiny. A deal at the reported $149 price point could dismantle the current high-margin business model that has fueled the companies' recent growth and optimistic Wall Street forecasts.
"The prospect of politically mandated price controls of this magnitude could fundamentally reset earnings expectations for the entire sector," noted one healthcare analyst at a major investment bank. Eli Lilly currently has an average analyst target price of $919.33, a figure largely predicated on continued pricing power for its Zepbound and Mounjaro franchises.
This development comes at a time when the competitive landscape is already heating up. Both companies have recently initiated price cuts to improve access for uninsured patients. In October, Eli Lilly began offering a starter dose of its Zepbound injection for $349 a month, while Novo Nordisk lowered the price of Wegovy to $499 for those without insurance coverage, according to reports from the Associated Press.
While these voluntary reductions were seen as a step toward addressing affordability, they pale in comparison to the figures cited in the Trump negotiations. Fox Business confirmed that Novo Nordisk is in discussions with the administration regarding the "most favored nation" executive order, which aims to align U.S. drug prices more closely with lower international prices.
The immense popularity of these treatments has made them a focal point for policymakers. Eli Lilly recently raised its full-year revenue guidance, driven by surging demand that has strained its manufacturing capacity. The company's soaring sales of Zepbound and Mounjaro have been a key driver of its stock performance, which is up significantly over the past year. Novo Nordisk, meanwhile, has struggled to meet demand, which contributed to the company lowering its 2025 financial guidance earlier this year, causing a temporary slide in its stock price.
Investors are now grappling with the uncertainty of whether a new pricing paradigm is on the horizon. While the negotiations are ongoing and no deal has been finalized, the headline risk alone is enough to temper the once-unbridled optimism surrounding the weight-loss drug market. The outcome could have far-reaching implications, not only for Novo Nordisk and Eli Lilly but for the broader pharmaceutical industry's approach to pricing in the world's most lucrative market.