Novo Nordisk will substantially cut the price of its weight-loss miracle drug in the US next year, with reductions of up to 50%.

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Novo Nordisk announced a major reduction in the list prices of its flagship weight-loss drugs Wegovy and Ozempic in the U.S. market, unifying the monthly list price of its semaglutide series to $675, with discounts up to 50%. The new pricing will take effect on January 1 next year. This move signals a significant shift in the Danish pharmaceutical company's competitive strategy in the obesity market.

Following the announcement, Novo Nordisk's U.S. pre-market shares fell 3%, and Eli Lilly's pre-market shares once dropped more than 4%. Notably, earlier this week, Novo Nordisk just released another set of disappointing trial data for its next-generation drug CagriSema, after which its stock has cumulatively dropped about 19%. The price reduction decision was made under this backdrop, further intensifying market concerns.

This price reduction is Novo Nordisk's proactive response after losing its leading position in the obesity market. Eli Lilly's competitor Zepbound is currently priced at $1,086.37 per month. After Novo Nordisk standardized its price to $675, it gained a clear pricing advantage.

Jamey Millar, head of Novo Nordisk’s U.S. business, said that this price reduction will not have a direct impact on the company’s net sales, but is optimistic about gaining payer approval. Millar previously worked at Optum Rx, the pharmacy benefit manager under UnitedHealth Group, and is well versed in U.S. drug pricing strategies. He stated:

“Payers have previously called for lower drug list prices, and I am confident they will accept and welcome these lower prices.”

Greatest benefit for high-deductible plan patients

The price reduction targets wholesale procurement costs, which are public prices and do not reflect the U.S. market's complex discount and rebate system. With commercial insurance coverage, out-of-pocket costs for Zepbound and Wegovy patients can currently be as low as $25 per month.

Jamey Millar, head of Novo Nordisk’s U.S. business, pointed out that the price reduction has the most significant impact on participants in high-deductible insurance plans. Under such plans, out-of-pocket costs for patients are more closely linked to drug list prices. Additionally, those enrolled in co-insurance plans (where patients pay a certain proportion of the list price) will also benefit.

According to the Kaiser Family Foundation (KFF) Employer Health Benefits Survey, last year about one-third of employees covered by employer insurance joined high-deductible health plans paired with personal health savings accounts. However, among surveyed large enterprises, fewer than half covered GLP-1 weight-loss drugs like Wegovy.

This list price reduction will take effect next year simultaneously with the discounts negotiated with the U.S. government for Medicare (the federal health insurance plan for seniors). Millar emphasized that the two price reduction measures are independent and unrelated.

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