Novo and Lilly fall after Biden calls for lowering prices of weight loss drugs

The president of USAJoe Biden on Tuesday urged pharmaceutical giants Novo Nordisk and Eli Lilly to lower the prices of medicines for diabetes and weightlossstating that companies must stop “cheat” to the Americans.

Companies are charging “exorbitantly high prices,” higher than those paid in other countries, Biden said in an editorial with Vermont Sen. Bernie Sanders published in USAToday. If “Pharmaceutical companies refuse to substantially lower prescription drug prices in our country and stop their greed, we will do everything in our power to stop it.”.

Novo Nordisk A/S shares and Eli Lilly & Co. fell in early Tuesday after the article was published. Novo fell as much as 3% in Copenhagen, while Lilly lost 2.1% before the U.S. market opened. Neither company immediately responded to requests for comment.

The president and Senator Sanders argue in the article that American patients pay much more than those in Canada, Germany and Denmark for medicines such as Ozempic, for type 2 diabetics, and Wegovy, used to treat obesity and weight loss.

“Why do people in Burlington, Vermont, pay so much more for the same medicine than people in Copenhagen or Berlin?“Biden and Sanders wrote in the article.

Market explosion

Analysts expect an explosion in the market for injectable drugs, particularly in the fight against obesity, that could reach $130 billion a year by the end of the decade. Companies including Pfizer Inc., AstraZeneca Plc and Amgen Inc., along with a host of smaller biotechs, are racing to get their products to consumers.

Biden’s comments seem to be “a last-ditch effort to appease certain voters,” according to a note from Mizuho’s Jared Holz. Given the drugs’ benefits in diabetes, heart disease and other conditions, “The price of US$1,000 a month for the injections actually seems very cheap.”.

Novo has blamed the high U.S. list prices for Ozempic and Wegovy on systemic problems, and in a letter to Sanders in May said it was willing to work with lawmakers to fix them. Its chief executive, Lars Fruergaard Jorgensen, is scheduled to testify in September before a Senate committee chaired by Sanders on drug pricing.

Novo has said it expects discounts on both drugs to continue to increase, particularly as more insurers cover Wegovy. Lilly has avoided some of the scrutiny Novo has faced so far.

Optimism over surging sales of Novo’s obesity drug Wegovy and its diabetes sibling Ozempic has helped boost the drugmaker’s market capitalisation to more than $600bn this year, reinforcing its position as Europe’s most valuable listed company. The share price has risen more than 80% in the past year and is up more than fivefold since the start of 2020.

“Unreasonably high” prices

According to one study, a one-month dose of Ozempic costs US$936 in the United States, five and nine times more than in Canada (US$169) and Germany (US$103), respectively.

Pharmaceutical company Eli Lilly also charges “exorbitantly high prices” for Mounjaro, a drug similar to Ozempic.

Those “excessive prices“They make medicines unaffordable for millions of Americans,” added the text from Biden and Sanders, who chairs the Senate health committee.

“If the prices of these drugs are not substantially lowered, they have the potential to bankrupt the U.S. health care system.“The president and the senator added.We will not allow that to happen.”

Novo Nordisk and Eli Lilly did not immediately respond to AFP’s requests for information.

Biden, who is seeking re-election in November, has focused his campaign on cutting health care costs, which have long been plagued by high prescription drug prices.

The article comes days after Biden’s poor performance in the first presidential debate against Republican Donald Trump sparked fears among Democrats ahead of the election.

With information from Bloomberg and AFP

IT MAY INTEREST YOU