(Bloomberg) — Novo Nordisk A/S and Eli Lilly & Co. shares fell Tuesday after US President Joe Biden continued his push for cheaper medication by demanding worth cuts on their blockbuster weight-loss and diabetes medication.
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The firms are charging “unconscionably high prices” which are above these paid in different international locations, Biden stated in an editorial with Vermont Senator Bernie Sanders revealed in USA Today. If “pharmaceutical companies refuse to substantially lower prescription drug prices in our country and end their greed, we will do everything within our power to end it for them,” they wrote.
Novo fell 1.1% in Copenhagen Tuesday, whereas Lilly shares misplaced as a lot as 3.9% earlier than paring losses in New York.
“Comparing list prices in the United States to other countries ignores patient affordability programs,” in addition to billions of {dollars} in reductions and charges paid to pharmacy profit managers that ought to decrease the prices, a Lilly spokesperson stated in an emailed assertion. “Unfortunately this system can drive prices higher.”
Novo Nordisk didn’t instantly reply to request for remark.
Analysts foresee exploding gross sales for the injected medicines, notably in combating weight problems, a market that Goldman Sachs estimates might attain $130 billion yearly by the tip of the last decade. Companies together with Pfizer Inc., AstraZeneca Plc and Amgen Inc., together with a number of small biotechs, are racing to get competing merchandise to customers.
A Bloomberg News/Morning Consult ballot from May — six months earlier than the US election — confirmed that voters in swing states belief Biden over Republican presidential frontrunner Donald Trump on well being care to the tune of 45% to 39%. Specifically on health-care prices, Biden held a four-percentage level benefit over Trump at 44%.
Biden’s feedback look like “a last-ditch effort to appease certain voters,” in line with a observe from Mizuho’s Jared Holz. In view of the medication’ advantages in diabetes, coronary heart illness and different situations, he stated the worth of round $1,000 a month “actually seems very inexpensive.”
Drug prices have been a long-running focus for the Biden administration. The Inflation Reduction Act has given Medicare, the US well being program for seniors, unprecedented energy to barter costs as soon as medication have been in the marketplace for a sure time frame. Novo’s Ozempic and Wegovy grew to become a major concern for Sanders earlier this yr, after a examine confirmed that Ozempic may very well be profitably produced for lower than $5 a month.
Trump has additionally pushed to decrease drug prices. He issued an govt order throughout his time period mandating the US authorities pay costs pegged to these abroad. A federal choose struck down the order and the Biden administration froze it, however Trump has vowed to revive it.
This yr’s worth debate reached Novo’s dwelling market of Denmark, with Sanders urging Danes in a letter in one of many nation’s greatest newspapers to pressure Novo to chop costs. Denmark additionally not too long ago requested docs to begin shifting Ozempic sufferers onto cheaper medication.
Novo has blamed the excessive US record costs for Ozempic and Wegovy on the way in which the well being system is structured, citing rebates and charges paid to middlemen. The firm stated in a letter to Sanders in May that it’s ready to work with US lawmakers to handle what it known as systemic points. Chief Executive Officer Lars Fruergaard Jorgensen is about to testify earlier than a Senate committee chaired by Sanders in September in regards to the medication’ costs.
Novo has stated it expects reductions on each medication to proceed to rise, specifically as extra insurers cowl Wegovy. Lilly has evaded a few of the scrutiny that Novo has been underneath thus far.
Optimism over hovering gross sales of Novo’s Wegovy for weight problems and its sister drug for diabetes, Ozempic, have seen its market capitalization surge past $600 billion this yr, reinforcing its place as Europe’s most respected listed firm. The inventory is up greater than 80% previously yr and has greater than quintupled because the begin of 2020.
–With help from Riley Griffin and Anne Cronin.
(Updates with Eli Lilly assertion in fourth paragraph.)
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