Novo Nordisk has launched a new online pharmacy, NovoCare, where it will offer its weight-loss drug Wegovy at less than half its usual price.
As Europe’s biggest pharmaceutical company, Novo Nordisk made this move shortly after U.S. rival Eli Lilly cut prices on its own obesity medication. This has increased competition in the fast-growing market for weight-loss drugs.
After the announcement, Novo Nordisk’s stock rose by 3.8% in U.S. trading. Eli Lilly’s shares initially fell 0.7% but later gained 2%. However, despite this boost, Novo Nordisk’s shares have only risen 4.2% this year, while Eli Lilly’s have jumped 19%.
This was reported by Euronews.
Competition Over Pricing
Under FDA rules, compounding pharmacies can produce versions of drugs that are in short supply. This has allowed smaller telehealth companies, like Hims & Hers Health, to sell cheaper weight-loss treatments.
But the FDA recently announced that shortages of Wegovy and Eli Lilly’s Zepbound are over. This means pharmacies will soon stop selling the lower-cost compounded versions, and patients will have to buy the official medications.
Without insurance, both Wegovy and Zepbound cost over $1,300 a month—too expensive for many people. About half of large U.S. employers don’t cover these drugs, and regulators have pressured pharmaceutical companies to lower prices.
To respond, Eli Lilly reduced the cost of its lower-dose Zepbound vials by $50 for cash-paying customers through its LillyDirect online store. The 2.5 mg dose now costs $348 per month, while the 5 mg dose is $499. Novo Nordisk followed by offering cash-paying customers Wegovy for $499 per month through its NovoCare pharmacy.
A Novo Nordisk spokesperson explained:
"While 90% of Wegovy users pay between $0 and $25 per month through insurance, this discount is meant to help those who don’t have coverage. With concerns about fake or unauthorized compounded semaglutide, NovoCare ensures patients can access real, FDA-approved Wegovy in a safe, once-weekly, single-dose pen."
The U.S. government has allowed a transition period for compounded versions of Zepbound and Mounjaro. Meanwhile, compounded versions of Wegovy and Ozempic will be available until April 22, when sales will stop.
Dave Moore, executive vice president of Novo Nordisk’s U.S. operations, said:
"Novo Nordisk is committed to making our medicines more affordable and accessible, whether patients have insurance or not. Right now, more than 55 million people in the U.S. have coverage for weight-loss treatments, and 90% of insured Wegovy users pay just $0 to $25 per month."
Slower Growth Ahead for Novo Nordisk
Despite strong fourth-quarter earnings, Novo Nordisk has warned that growth may slow in 2025 as competition from Eli Lilly increases.
The company is investing heavily in research and development, especially since the patent for Wegovy is set to expire in the early 2030s.
A recent trial of its next-generation obesity drug, amycretin, showed positive results, briefly boosting its stock price in January.
However, investors are still watching closely, as the company’s profit margins fell in the last quarter due to price cuts and rising costs.
