The US government’s new drug platform could discount pharma stocks
ism, but in exchange for tariff relief and fast-tracked approvals for new medicines. They might be having second thoughts now, though: Novo says the lower prices are already weighing on revenue, and Pfizer expects to see the same this year.
▶ Copycat drugs are only adding to the price pressure. Case in point: earlier this week, telehealth firm Hims & Hers Health promised its own “compounded” version of Novo’s Wegovy new weight-loss pill for $49 in the first month – a fraction of the Danish firm’s $149 price tag.
🔻 Novo threatened legal action, but the damage was done: investors sent its shares down about 20% this week.
Zooming out: Novo’s losing weight in all the wrong places.
All in all, Novo thinks revenue could fall by as much as 13% this year – and it can’t pin that solely on knockoff rivals and steeper discounts. Eli Lilly, after all, sells similar weight-loss drugs – and the American firm has pulled ahead with more effective treatments and a faster manufacturing ramp.
▶ That sets Lilly up to better handle this new pricing pressure, which is why the firm still expects its revenue to climb this year – by as much as 27%.
▶ No wonder investors have picked a favorite: Lilly’s shares are up about 20% over the past year, while Novo’s have slumped.
