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CNBC
4 hours ago
- CNBC
Eli Lilly's 170% UK price hike for Mounjaro is just the start as pharma firms bow to Trump's pricing pressures
Eli Lilly 's move to raise the U.K. list price of its blockbuster diabetes drug Mounjaro marks the start of prices hikes across Europe, analysts say, as pharmaceutical firms respond to U.S. President Donald Trump's drug pricing demands. Lilly said Thursday that it had reached an agreement with the U.K. government to raise the list price of its weekly injection from Sept. 1, while maintaining access for patients covered by the publicly funded National Health Service (NHS). The U.S. pharma giant said it is now working with some other governments to adjust prices by the start of next month, without providing details of the specific countries involved. Analysts expect other firms to follow suit. "Lilly doing this isn't shocking and I think that we'll see more to come," Kavita Patel, NBC News & MSNBC medical contributor and Stanford University professor, told CNBC's "Fast Money" on Thursday. President Trump earlier this month delivered an ultimatum to pharma firms as part of his ongoing campaign to stamp out what he deems as unfair pricing practices in the U.S. In letters sent to 17 major pharmaceutical firms, the president outlined the steps they must take by Sept. 29 to lower the price of U.S. prescription drugs to "most favored nation" (MFN) levels. Lilly's pricing decision takes the U.K. list price of its popular treatment from a range of £92 (about $124.57) to £122 a month, depending on the dose size, to between £133 and £330 — a 170% price jump. That compares to its U.S. list price of $1,079.77 a month, before insurance and other rebates. The U.S. consistently pays the most in the world for many prescription drugs, due in part to the country's highly complex and fragmented reimbursement system, and a lack of the types of national pricing control prevalent in much of Europe. Several European pharma firms have spoken out in support of the White House's pricing demands, with AstraZeneca CEO Pascal Soriot saying last month that Trump was "right" to push for price equalization. Novartis CEO Vas Narasimhan has cited "productive" conversations with the administration, while Roche Chief Executive Thomas Schinecker has suggested that U.S. prices could be cut in half if the government removed intermediaries, known as pharmacy benefit managers (PBMs). Stanford University's Patel noted that firms like Eli Lilly may also be willing to accede to Trump's pricing demands as they seek coverage for their weight loss drugs under forthcoming changes to the U.S. government's Medicare and Medicaid health insurance systems for low-income people and retirees. "The United States is their big market and having that share in both Medicare and Medicaid is everything for drugs like Mounjaro. So this is important and I don't think they'll be the only one that we see," she said. Indeed, rival diabetes and obesity drug giant Novo Nordisk is seeking to regain ground in the lucrative U.S. market after a series of missteps and supply shortages have seen it lose market share to both Lily and other cheaper compounded weight loss drugs. Novo Nordisk 's Chief Financial Officer Karsten Munk Knudsen said earlier this month that Trump's drug pricing demands had "resonated" with the company and that it was already lowering the price of its Wegovy and Ozempic treatments stateside. The company said Monday that it would reduce the cost of Ozempic for cash-paying patients to $499 per month, less than half of its monthly U.S. list price. Nevertheless, Knudsen previously suggested that it could be difficult to simultaneously raise prices in other markets, given stretched public finances and strict pharmaceutical price caps across Europe. "If we look ex-U.S. markets, there's rather limited history in terms of raising prices … I believe it will be challenging to significantly raise prices outside the U.S.," he told CNBC's "Squawk Box Europe." Industry bodies, meanwhile, have warned of the damaging impact sudden prices hikes could have on patient care if implemented to meet Trump's Sept. 29 deadline. Already, U.K. private pharmacies have reported a surge in orders for Lilly's Mounjaro following Thursday's announcement. "Short notice changes to pricing for medicines such as this also have a serious effect on access to an important public health service and pharmacy business themselves," Henry Gregg, chief executive of the U.K.'s National Pharmacy Association, said in a statement. "We are urging the manufacturers to ensure that pharmacies are treated equitably and that proper support is in place," he added.
Yahoo
5 hours ago
- Yahoo
Despite FDA ruling, compounded GLP-1s are still giving Novo and Lilly headaches on the market
This story was originally published on PharmaVoice. To receive daily news and insights, subscribe to our free daily PharmaVoice newsletter. When the FDA took Novo Nordisk and Eli Lilly's GLP-1 medications off of the drug shortage list, the move should have been a death knell for copycat compounded versions. But then something unexpected took place. Compounding pharmacies found a loophole and continued making off-brand versions of the lucrative weight loss drugs. Months later, compounded GLP-1s are still for sale on direct-to-patient platforms like Hims & Hers. Compounded drugs, which are not FDA approved, are allowed on the market when the brand-name medications are in shortage or when patients need personalized versions. When Novo and Lilly's drugs were in short supply last year, compounded GLP-1s were also sold at a significantly lower cost for those paying out of pocket. But once the shortage was over, the FDA gave compounding pharmacies a grace period before it planned to crack down. Now, with the grace period long over, compounding pharmacies still operate by making their GLP-1s 'personalized,' with slight changes to formulas. It's a strategy some experts have described as a regulatory failure. The compound drug issue has hit Novo particularly hard. Earnings impact During its second-quarter earnings call with analysts, Novo executives noted that compounded GLP-1s are impacting uptake for Wegovy prescriptions and the stunting the overall growth of the branded obesity market this year. 'Multiple entities continue to market and sell compounded GLP-1s under the false guise of personalization, and it is estimated … around 1 million patients are on compounded GLP-1s in the U.S.,' said David Moore, president of Novo Nordisk and executive vice president of U.S. operations. At the same time, Novo has been grappling with tougher competition from Lilly, whose share of the obesity market rose to 57% as of the second quarter. The compounding market is also becoming more complex. Several telehealth platforms that offer compounded GLP-1s have partnered with Lilly or Novo to offer their branded weight loss drugs. For example, health and fitness platform Noom partnered with Lilly's direct-to-patient platform LillyDirect earlier this year to sell vials of Zepbound. However, Noom also launched low doses of compounded semaglutide this month starting at $119 per month — about a quarter of the cost for the branded drug's starting dose. The microdoses may reduce the impact of side effects from semaglutide use, which have caused many patients to abandon the treatments. 'We set out to virtually eliminate side effects for the vast majority, so that more than 70% of people would encounter no side effects,' Dr. Jeffrey Egler, chief medical officer at Noom, said in a statement. 'In both my clinical experience and evidence in published studies, it is clear that many people discontinue GLP-1 treatment because of side effects.' Lilly said in June it would only partner with telehealth platforms that agree not to sell compounded GLP-1s. Novo's DTC channel offers vials of Ozempic for about half the list price of its injectable pens. But compounded versions are taking too much share from this out-of-pocket option, diminishing Novo's quarterly results and financial outlook, executives said this month. 'As unsafe and unlawful mass compounding continues, the Wegovy penetration within the cash channel has been lower than expected,' Moore said on the earnings call. New lawsuits Lilly and Novo maintain that personalized compounded GLP-1s are running afoul of the law, and both have launched new lawsuits in an attempt to prohibit pharmacies from selling the products. The companies also argue that compounded GLP-1s put patients at risk. Novo filed 14 new lawsuits this month against medical spas, telehealth platforms and compounding pharmacies, alleging the 'unapproved knockoffs' of Wegovy are made with illegal APIs and are not safe. The suits also allege companies are violating the law by influencing doctors to steer patients toward the compounded versions. 'This is a priority for our company. This is a priority to protect patient safety. This is a priority to ensure that the laws are followed,' Moore said of the lawsuits during the earnings call. Moving forward, Moore also said 'there is nothing categorically that is off the table' with respect to the litigation. He also said Novo has increased dialogue with the FDA to put more pressure on companies that are 'misleading patients' with the compounded GLP-1s. The FDA recently updated its warning about unapproved, compounded GLP-1s, calling them 'risky.' Recommended Reading 3 ways the GLP-1 market has changed shape this year Se produjo un error al recuperar la información Inicia sesión para acceder a tu portafolio Se produjo un error al recuperar la información Se produjo un error al recuperar la información Se produjo un error al recuperar la información Se produjo un error al recuperar la información
Yahoo
5 hours ago
- Yahoo
Analysis-Wall Street sees new obesity pills as priced near Wegovy and Zepbound
By Maggie Fick and Bhanvi Satija SEATTLE (Reuters) -U.S. prices for obesity-treatment pills that Eli Lilly and Novo Nordisk aim to launch next year likely will be on par with their weight-loss injections, analysts and investors say, in a departure from the usual practice of charging more for new medicines despite pressure to cut prices. Neither drugmaker has disclosed pricing plans for their new daily oral medications. With regulatory approvals and launches still months away, pricing plans could change. Denmark-based Novo expects approval later this year and to launch soon after, while Indianapolis-based Lilly expects to launch by August 2026. Novo's Wegovy and Lilly's Zepbound, administered as weekly injections, are the only highly effective weight-loss drugs targeting the GLP-1 hormone, and the United States is their biggest market. U.S. list prices are about $1,000 per month or more, with both companies offering a monthly supply for $499 to customers paying cash rather than using health insurance. Both companies have said they developed oral weight-loss drugs to meet patient needs and widen access to the market, mindful that some people are averse to injections. The pills, however, are not more effective than the injections. Lilly said this month its pill orforglipron cut weight by 12.4% after 72 weeks in a trial. That compares with weight loss of 15% for Novo's daily oral semaglutide. Both trail Lilly's injection at up to 21%. UBS analyst Trung Huynh said that will cap Lilly's pricing. The price is "probably going to come on par with the current drugs today or slightly lower," Huynh said. TD Cowen analyst Michael Nedelcovych said he expects Novo's pill to debut near Wegovy's price, citing the precedent of its diabetes pill Rybelsus being priced at parity with injection Ozempic, the diabetes-treatment version of Wegovy. Novo executives told analysts this month they were not in a hurry for discount pricing for the new pill. Oral GLP-1 drugs will fill a niche rather than displace injections, according to analysts. TD Cowen estimates that pills will account for a percentage share of the global obesity drug market in the mid-teens by 2030, which could reach $150 billion by then. GROWING CASH PAY U.S. doctors, patients and insurers are pressing for lower prices to make the weight-loss drugs more affordable for the 40% of Americans who are obese. Typically, drugmakers launch new drugs at higher prices, citing scientific advances. President Donald Trump and lawmakers from both parties have urged the companies to reduce U.S. prices. Novo declined to comment on pricing, pointing to August 6 comments by David Moore, its U.S. operations head, saying that the company may tap customers paying cash directly via its new NovoCare pharmacy, which was launched this year to sell Wegovy outside of insurance. A Lilly spokesperson called it premature to comment on pricing and launch plans for its pill because the company has not yet submitted data for regulatory approval. Peak annual sales forecasts for Lilly's orforglipron fell to as low as $10 billion after its trial data from earlier estimates of up to $30 billion, according to a Reuters review of analyst estimates. HSBC forecasts $15 billion in peak annual sales for Novo's pill, while Barclays expects only $1 billion. MANUFACTURING VOLUME A key question is how much supply will be available at the time of launch. Shortages of injectable GLP-1s in 2023 and 2024 opened the U.S. market to cheaper compounded versions as the manufacturers failed to anticipate the huge demand. "It's all about scale and pricing," said Kevin Gade, portfolio manager at Bahl & Gaynor, which owns Lilly shares. Gade pointed to Novo's manufacturing challenge. The pill form requires about 75 times more active ingredient than the highest-dose Wegovy injection, two analysts told Reuters. Lilly has said it already has $808.5 million in orforglipron inventory for next year's expected launch. Novo has said it will launch its pill without supply constraints after billions of dollars in investment to expand semaglutide production. Despite the high production needs, Novo is unlikely to debut its pill at a higher price than Wegovy, said Karen Andersen, healthcare strategist at Morningstar. "Particularly in the growing cash-pay market, I doubt it can risk a launch at a premium to Wegovy," Andersen added. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
