By Sriparna Roy and Padmanabhan Ananthan
Feb 24 (Reuters) - Novo Nordisk will slash U.S. list prices of its blockbuster diabetes and weight-loss drugs Ozempic and Wegovy by up to 50% starting next year to $675 a month, the Danish drugmaker said on Tuesday.
The price cuts will be effective January 1 next year, coinciding with the implementation of new, lower prices for the same drugs under federal Medicare health plans for older adults.
High demand for GLP-1 drugs for weight loss has made the market
for Novo and rival Eli Lilly increasingly competitive, with a shift to consumer-driven cash-pay channels driving price cuts. Novo sells Wegovy for about $349 on its site - about one-third of its official list price.
Both companies signed deals with the U.S. government to cut prices this year and sell through TrumpRx.gov, a website which sends consumers to their direct-to-consumer websites. Novo also had to negotiate its 2027 prices in the Medicare program for people aged 65 and older or with disabilities under the Inflation Reduction Act.
The price cuts, the first by the Danish drugmaker, should benefit consumers in the U.S. who have health insurance that links patients' out-of-pocket costs to list price.
Health plans and employers get after-market discounts and rebates on medicines through pharmacy benefit managers, who negotiate drug prices.
"The new $675 list price is a proactive move, specifically designed to help patients whose out-of-pocket costs are linked to list price," Jamey Millar, Novo Nordisk's executive vice president of U.S. operations, said in a statement.
LIST PRICE CUTS FOR OZEMPIC, WEGOVY, RYBELSUS
Under the revised pricing, Wegovy will cost 50% less, while diabetes treatment Ozempic will see a 35% cut. The price cuts also will apply to Wegovy and Rybelsus pills.
The changes do not impact direct-to-patient or self-pay prices.
Citi analyst Geoffrey Meacham said the price cut is likely to benefit only a relatively small portion of new prescriptions compared to cash-pay channels, which hold "an overwhelming share."
Lilly and Novo have been cutting prices for the hugely popular drugs and offering direct-to-customer purchases through their own websites, for starting prices as low as $149 for the new Wegovy pill.
They have also been facing competition from cheaper compounded versions offered by telehealth platforms such as Hims & Hers, which are allowed to make and sell the drugs in personalized doses or composition.
"This isn't a silver bullet for Novo and in our view doesn't constitute the beginning of a price war, particularly with the White House deal providing a soft-floor for the next three years," said Bernstein analyst Courtney Breen.
U.S.-listed Novo shares were down 2.6%, while those of Lilly were 1% lower in morning trading.
Earlier this month, Novo warned that its profits and sales could drop as much as 13% this year, the first declines in years.
(Reporting by Padmanabhan Ananthan and Sriparna Roy in Bengaluru; Editing by Leroy Leo)
