Coming Soon to an Internet Near You: Half-Price, Direct-to-Consumer Wegovy

Novo Nordisk said on Wednesday that it’s trimming the price tag for slimmer waistlines. 

The Danish pharmaceutical giant will sell its blockbuster weight-loss drug Wegovy for under half its normal price via a new direct-to-consumer online pharmacy. Christened NovoCare, the site will let people pay $499 per month for the weekly drug, compared with a current list price of roughly $1,350 before insurance. It follows a similar move by rival Eli Lilly as both try to extract as much profit from so-called GLP-1 drugs as possible before a run of new participants join the fray.

Feeling the Weight of Expectations

Novo suffered a brutal setback in December when its next-generation weight-loss drug candidate, CagriSema, posted weak results in a late stage trial, which led to its stock sliding 19% in one day. Meanwhile, Eli Lilly’s sales have disappointed for two consecutive quarters, and shares in both companies have retreated from record highs. Each is still trading at a relatively high price-to-earnings ratio: Eli Lilly at 67 and Novo at 27, putting them above the average P/E range of 20 to 25 and meaning some would consider them still overvalued.

And while both companies still have their landmark, billions-making weight-loss drugs — Zepbound is Eli Lilly’s Wegovy competitor — even that is no sure thing in the medium to long term. That’s because investors have poured hundreds of millions into startup biotechs working on their own obesity treatments, setting the stage for a new generation of rivals. Verdiva Bio and Kailera Therapeutics have raised $400 million apiece and Metsera, which closed an IPO last month, raised $215 million last year. Big pharma competitors also have anti-obesity drug candidates in the works. And so, with the future of a sector that Goldman Sachs says could be worth up to $100 billion by 2030 at stake, Novo and Eli Lilly have opened up discounts to expand and entrench their market share:

• NovoCare, the new online pharmacy for discounted Wegovy, follows a decision last year by Eli Lilly to launch its own direct-to-consumer online platform. LillyDirect can help patients access Zepbound prescriptions through telehealth providers and offers the drug at half (or less) of the usual $1,000 monthly price.
• After Novo and Lilly struggled to keep up with demand for their weight-loss drugs, the Food and Drug Administration declared shortages of Zepbound and Wegovy, which temporarily allowed compounding pharmacies to make and sell cheaper versions. Last month, the FDA declared both shortages over, leaving behind a new generation of customers with expectations of a lower price point.

Traditional Song: Adding more music to the ears of Wegovy shoppers, Novo said in a statement that cash-paying customers at traditional pharmacies will be able to buy the drug for the discounted rate “in the near future.”