(Reuters) -Shares of obesity drugmakers Eli Lilly and Novo Nordisk rose early on Thursday in anticipation of a White House deal that would reduce prices of their blockbuster weight-loss treatments in return
for expanded market access.
Denmark's Novo, which is also locked in a bidding war with Pfizer over U.S. obesity biotech Metsera, rose around 3%, while Eli Lilly was trading marginally higher before the U.S. market open.
Novo's Wegovy and Eli Lilly's Zepbound are the only highly effective GLP-1 based weight-loss drugs sold mainly in the U.S. as weekly injections.
List prices top $1,000 a month, though both offer cash buyers a $499 monthly supply. Novo was first to market, but Lilly's Zepbound is catching up fast.
The move is aimed at increasing access to the treatments through U.S. Medicare and Medicaid programs, but analysts said the pricing framework could disproportionately benefit Lilly, solidifying its lead over Novo in the weight-loss market.
BMO Capital analyst Evan Seigerman said Lilly's dominance in the GLP-1 space continues to deepen, with physicians and patients increasingly favoring its drugs.
"A potential deal with the Trump administration's direct-to-consumer platform, TrumpRx, could further accelerate Lilly's momentum," he said, as expanded government coverage more than offsets any decline in net pricing.
Drug pricing has been a cornerstone of President Donald Trump's second-term agenda and the rollout of a direct-to-consumer channel marks a major shift in U.S. healthcare distribution.
By bypassing pharmacy benefit managers, the initiative aims to cut costs and expand access, aligning with Trump's pledge to lower prescription drug prices.
Several drugmakers, including Pfizer and AstraZeneca, have signed on through new agreements tied to the TrumpRx platform
Deutsche Bank analysts see the deal as a potential catalyst for Lilly's growth. They expect that a $150 monthly cap could unlock access for up to 15 million Americans, mainly among the 20% of obese adults who are needle-phobic, a segment Lilly could capture with its upcoming oral GLP-1 pill, Orforglipron.
Both Lilly and Novo are racing to bring oral versions of their blockbuster GLP-1 treatments to market. Novo's once-daily oral Wegovy is under U.S. FDA review with a decision expected in late 2025, while Lilly's Orforglipron is set for regulatory submission by the end of 2025 and a potential launch in 2026.
"orfirglipron's lower cost could give the company free rein in the near term," Deutsche analysts said, rapidly matching or exceeding Zepbound's current 2.7 million U.S. patients.
(Reporting by Mrinalika Roy in Bengaluru, Bhanvi Satija and Maggie Fick in London; Editing by Arun Koyyur)
