After being suppressed by Eli Lilly for two years, how Novo Nordisk strikes back: "Bowing to Trump" to obtain tariff exemptions, exchanging profits for speed to race ahead with new drugs.

After experiencing the darkest moment of its stock halving and losing the throne of “weight-loss drug king,” Danish pharmaceutical giant Novo Nordisk is trying to regain market dominance through a bold political gamble and accelerated product strategy.

Faced with fierce competition from Eli Lilly, the new Novo Nordisk management has chosen to sacrifice part of its profit margin in exchange for tariff exemptions and regulatory green lights from the U.S. government, striving to seize the lead in the competition for next-generation oral drugs.

According to Bloomberg, Novo Nordisk has reached a key agreement with the Trump administration: the company agreed to sharply reduce the price of its flagship weight-loss drugs in U.S. federal Medicare and Medicaid programs, while also cutting the direct-to-consumer price. In exchange, Novo Nordisk will receive exemption from import tariffs on drugs for the next three years, and its high-dose Wegovy injection will be eligible for expedited FDA review.

This strategy quickly converted into tangible market advantages. The FDA approved Novo Nordisk’s oral Wegovy application in December, and the company plans to officially launch the product in the U.S. in January 2026. This means Novo Nordisk will lead Eli Lilly by about three months in the key battlefield of oral weight-loss drugs, as Lilly’s similar product is expected to be approved next March.

Boosted by the news, Novo Nordisk’s stock price rebounded more than 9% in recent trading.

Although price concessions may suppress sales growth in the short term, investors are reevaluating the valuation logic of this European pharmaceutical giant.

Throughout 2025, due to clinical trials falling short of expectations and Eli Lilly’s Zepbound demonstrating better weight-loss effects, Novo Nordisk’s stock price once plunged by more than 50%. The compromise with the White House and the accelerated launch of new drugs are seen by the market as the company’s last-ditch effort to reverse its decline and use “first-mover advantage” to block its competitor before the patent cliff approaches.

Volume for Price: The “Political Trade” with the White House

After Trump took office, he targeted persistently high prescription drug prices in the U.S., demanding pharmaceutical companies to do direct-to-patient sales and align prices with international levels.

Against this backdrop, both Novo Nordisk and Eli Lilly reached price-cut agreements with the Trump administration in November. According to White House officials, not only government procurement prices, but also direct-to-consumer (DTC) prices for Ozempic and Wegovy will be cut.

As a policy dividend of price cuts, coverage for weight-loss drugs under public medical insurance will be significantly expanded. Previously, the program only reimbursed obese patients with specific complications such as cardiovascular disease, but under the new rules, coverage will be extended to overweight individuals with prediabetes.

For Novo Nordisk, the core value of this deal lies in both defensive and offensive gains: the three-year import tariff exemption removes the risk of a trade war, and accelerated approval for high-dose Wegovy is intended to close the efficacy data gap with Lilly’s Zepbound.

The company admits that the agreed lower prices may put pressure on global sales growth next year, but in the intense duopoly competition, this has earned it a valuable strategic buffer period.

Race to Launch Oral Drug: A Three-Month Window

With injectable market competition at a fever pitch, oral preparations are seen as the next frontier in the weight-loss drug market, as they are more convenient for patients and have lower production costs. Currently, Novo Nordisk is placing a big bet on the oral version of Wegovy, which will go on sale in January 2026.

This timing is crucial. According to consensus compiled by Bloomberg analysts, Lilly’s similar oral drug is expected to be approved in March. Novo Nordisk’s new CEO Mike Doustdar stated that the company has “ample” pill inventory ready for the launch, and confirmed that initial talks are underway with telehealth platform Hims & Hers Health Inc. for oral drug sales to expand distribution channels.

Investors are watching closely to see whether Novo Nordisk can use these few months of a “vacuum period” to build brand loyalty. Portfolio manager Sebastien Malafosse of Edmond de Rothschild Asset Management pointed out that the company has “learned its lesson” and will likely execute better than during the chaotic launch of Wegovy injection in 2021.

Senior investment manager Gregoire Biollaz of Pictet Asset Management believes if approvals and launches go smoothly, high-dose injectables and the oral version will be key catalysts for a stock recovery.

Valuation Reshaping: Reflections After the Darkest Hour

Novo Nordisk’s market performance in 2025 was disastrous. Misjudging market demand led to a broken supply chain, and disappointing clinics for the next-generation drug CagriSema—its weight-loss effect was only on par with Lilly’s Zepbound and did not surpass it—caused the company’s stock price to suffer its worst year ever, wiping out gains from previous years.

However, the plunge also brought Novo Nordisk’s valuation back to an extremely attractive range. Its forward P/E currently is about 14 times, only half the average level of the past five years, and more than 10% cheaper than the MSCI World Pharma Index.

Berenberg analyst Kerry Holford wrote in a report last week that the current share price barely reflects pipeline value; considering the company’s record of strong R&D returns, this valuation is clearly too low.

Nevertheless, long-term concerns remain. The core ingredient semaglutide in Wegovy and Ozempic will lose U.S. patent protection in 2032. Bellevue Asset Management portfolio manager Paul Major warned that unless investors see convincing new catalysts to support future growth, confidence in the company will take time to recover due to an uninspiring pipeline.

Cracking Down on Generics: Recapturing a Million Lost Users

In addition to head-on competition with Eli Lilly, Novo Nordisk must address the huge generics market that grew out of previous supply shortages. According to company estimates in November, over one million patients in the U.S. are using cheap generic GLP-1 drugs produced by so-called “compound pharmacies.”

Although the FDA announced the shortage of semaglutide was over in February 2025 and started limiting generic production in May, compound pharmacies continue to exploit regulatory loopholes (such as changing dosage or adding vitamin B12) to sell products. To win back this market share, Novo Nordisk has launched the direct-to-patient platform NovoCare and cut prices steeply.

The NovoCare platform offers deep discounts to self-pay users, pricing far below Ozempic’s list price of $998 and Wegovy’s $1349. This is a direct attempt by Novo Nordisk to squeeze out generics through price wars and convert “black market” users into legitimate customers.

Although the earlier partnership with telehealth company Hims & Hers broke down in less than two months, through self-built channels and new low-price strategies, Novo Nordisk is trying to repair the market share lost to capacity issues.

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