US HEALTHCARE: Trump Cutting GLP-1 Prices
(LLY: Aa3/A+ Pos/NR) (NOVOB: Aa3/AA/NR)
#MNI #Healthcare
- Eli Lilly and Novo Nordisk reached a deal with the Trump Administration to cut prices on GLP-1 weight-loss medications for patients in the US.
- LLY and Novo will sell their drugs (Mounjaro & Zepbound / Ozempic & Wegovy) to the Medicare and Medicaid programs for $245/month for treating both diabetes and obesity.
- Medicare patients will have a $50/month copay starting in April 2026.
- Furthermore, LLY/Novo will sell the GLP-1 drugs directly to consumers at an average price of $350/month and will work to reduce that to $250/month over 2 years (through the TrumpRX website).
- The GLP-1 drugs currently have list prices of $1,000-$1,350/month but we note the net price to consumers through insurance is much lower.
- With this deal, LLY and Novo will get reprieve from US tariffs and new vouchers which will help speed approval of upcoming weight-loss pills. The Companies will also invest in US R&D and manufacturing - much of which has already been announced.
- From a credit perspective, we see little overall impact to LLY and its metrics going forward. We think the decline in net selling prices will be met with a surge in demand now that these drugs will be more readily available to consumers whose insurance does not cover the drugs for weight-loss (noting patients will still need a valid prescription).
- This news could benefit Health Insurers and Pharmacies (UNH, CVS, CI, ELV, HUM) as they will likely negotiate further discounts and Pharmacies are likely to see higher prescription volumes as a result.
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- RES 4: 1.3789 High Jul 1 and key resistance
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- RES 2: 1.3661 High Sep 18
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Figure 1: Do you favour the US ...? (% of US adult citizens)
Source: YouGov
