Copenhagen, Denmark – Novo Nordisk A/S and Eli Lilly & Co. faced a downturn in their stock prices following U.S. President Joe Biden’s recent push for more affordable medications, specifically demanding price reductions on their popular weight-loss and diabetes drugs.
In an opinion piece published in USA Today alongside Vermont Senator Bernie Sanders, Biden criticized the pharmaceutical companies for charging what he deemed as unreasonably high prices above those seen in other countries. This led to Novo Nordisk shares dropping by 1.1% in Copenhagen, while Lilly shares experienced a decrease of up to 3.9% before recovering slightly in New York.
Biden emphasized that if pharmaceutical companies do not significantly lower prescription drug prices and curb their appetite for profits, his administration would take decisive actions to address the issue. In response to these accusations, a representative from Lilly pointed out that list prices in the United States do not account for patient affordability programs or the substantial discounts provided to pharmacy benefit managers, ultimately leading to higher costs for consumers.
The market for injected weight-loss drugs, particularly in combating obesity, is expected to expand significantly, with some estimates suggesting it could reach $130 billion annually by the end of the decade. This growth has prompted various pharmaceutical companies, including Pfizer Inc., AstraZeneca Plc, and Amgen Inc., to develop competing products to meet consumer demand.
Biden’s stance on healthcare, especially pertaining to drug pricing, has garnered support among voters in swing states, with a Bloomberg News/Morning Consult poll indicating a preference for Biden over his political opponents on key health-related issues. Recognizing the potential impact of these medications on conditions like diabetes and heart disease, analysts have highlighted the relative affordability of drugs like Ozempic at roughly $1,000 a month.
Efforts to tackle rising drug prices have been a focal point for the Biden administration. The Inflation Reduction Act has granted Medicare the authority to negotiate drug prices after they have been on the market for a specified period. Novo Nordisk’s products, Ozempic and Wegovy, have drawn particular attention for their pricing structure, prompting calls for further scrutiny and potential reforms.
Despite criticisms, Novo Nordisk has emphasized its commitment to patient access and affordability, highlighting a decrease in the costs of its drugs since their launch. The company remains open to collaborating with policymakers to address systemic issues within the healthcare system. Furthermore, Lilly has not faced the same level of scrutiny as Novo Nordisk, indicating differing levels of industry oversight and public perception.
In the face of escalating price debates, Novo Nordisk’s market value has soared, solidifying its position as one of Europe’s most valuable listed companies. The company’s optimistic outlook for increased sales of its obesity and diabetes drugs has propelled its stock price upwards, with substantial growth seen over the past year. Biden’s ongoing efforts to address drug pricing reflect broader concerns about healthcare affordability and accessibility, signaling a potential shift in how the pharmaceutical industry operates in the United States and beyond.
