The White House is expected to announce a deal for lower prices of obesity drugs from Novo Nordisk (NOVOb.CO) and Eli Lilly (LLY.N) on Thursday during an event, according to sources familiar with the situation, pushing shares of the two companies higher as investors bet on increased patient access in government health programs.
Denmark's Novo rose around 2%, while Eli Lilly was trading about 1% 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.
President Donald Trump has said he wants prices to fall to below $150. On Tuesday, media reports said that the Trump administration had struck deals at that price for the smallest, starter doses.
The move is aimed at increasing access to the treatments through U.S. Medicare for people aged 65 and over or with disabilities and the Medicaid program for low-income people which together provide healthcare coverage for nearly half of all Americans.
Currently, Medicare does not easily cover the drugs for obesity. Coverage in Medicaid, which is run by each state and jointly financed with the federal government, varies.
A $150 PILL WOULD BE A GAME CHANGER, ANALYST SAYS
Deutsche Bank analysts see the deal as a potential catalyst for Lilly's growth, estimating a $150 monthly cap could unlock access for up to 15 million Americans if it applies to orforglipron, its experimental weight loss pill that succeeded in its late-stage trial. Lilly has said it is talking to the U.S. FDA about submitting that drug for approval.
Deutsche Bank said the increased uptake would come from the 20% of obese adults who do not like the needles that come with the current injections. About 2.7 million Americans currently take Lilly's Zepbound, it said.
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.
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.
The Trump administration has said that TrumpRx.gov will launch in 2026 as a way to facilitate direct-to-consumer sales of drugs at what it has described as most favored nation pricing.
The U.S. pays more than any other country for drugs, often three times as much, and Trump has urged drugmakers to cut prices here and charge more in other wealthy nations such as those in Europe.
Several drugmakers, including Pfizer and AstraZeneca (AZN.L), have signed on through new agreements tied to the TrumpRx platform.
