Today, 13:50
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Plan: P:E/DDF
Stats: 225/150/169
BF:45%/28%/25%
Progress: 134%
Location: NC
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https://www.wsj.com/health/pharma/e...share_permalink
Should work, but if not...
Quote:
A price battle has broken out in the hot market for weight-loss drugs.
Eli Lilly LLY -3.47%decrease; red down pointing triangle and Novo Nordisk NOVO.B -4.59%decrease; red down pointing triangle, the pharmaceutical heavyweights selling the popular injections, are each dangling discounts to gain an edge and to induce health plans to pay up. The concessions are slashing as much as half off the price tags of the $1,000-plus-a-month medicines.
For people who pay out of pocket, Lilly recently introduced vials of its drug Zepbound that cost as little as $399 a month.
Price concessions are a new, major development in the burgeoning market for weight-loss drugs, after high prices and limited supplies led many health plans to refuse coverage and prompted some patients to turn to lower-priced but unapproved custom-made versions.
The moves could prod more health plans to begin paying for the medicines. That would help some workers who are clamoring for the drugs—but unable to afford them without health insurance—to finally be able to fill prescriptions.
Kailey Wright delayed filling a prescription for Zepbound injection pens after her pharmacy told her she would have to pay about $600 out of pocket for a month’s supply because her employer-based insurance didn’t cover it.
After Lilly introduced the lower-cost vials, Wright opted instead to pay $399 cash for a one-month supply of vials, using Lilly’s online service, LillyDirect, which ships directly to patients. She took her first dose this month.
I prefer paying that over $600 or $1,000,” said Wright, 38 years old, a forensic accountant in Orange County, California. “But I also think these things should be cheaper.”
Lilly’s Zepbound and Novo Nordisk’s Wegovy are among the hottest-selling medicines in the U.S., along with their twins for diabetes: Mounjaro and Ozempic. They have been so popular that some health plans that initially agreed to cover the medicines stopped because of the cost.
Wegovy, which came out in 2021, has a list price of nearly $1,350 a month in the U.S.
Lilly began the pricing fight when rolling out Zepbound in late 2023. Lilly priced the drug competitively at roughly $1,060 for a month’s supply, or 20% lower than Wegovy’s list price.
To compete, Novo Nordisk ramped up its rebating. Average Wegovy rebates rose to about 51% of list price in the second quarter from about 35% a year earlier, according to Jefferies analysts.
Manufacturers pay rebates to drug middlemen called pharmacy-benefit managers, which say they pass them through to the health plans they serve. Drugmakers also pay rebates to other plans, such as state Medicaid programs for low-income people.
“It was only a matter of time before Novo was going to have to offer greater rebates and discounts, because it’s difficult for them to price Wegovy at a premium to Zepbound when Zepbound has better efficacy and tolerability,” said Leerink Partners analyst David Risinger.
A Novo Nordisk spokeswoman said the price of Ozempic after discounts has declined 40% since the drug’s launch, and Wegovy’s net price is following a similar trajectory. She added that Wegovy is the only anti-obesity drug also approved to reduce the risk of heart attacks and strokes in people with obesity and heart disease.
The discounting ate into Novo Nordisk’s revenue. The company reported disappointing sales for the latest quarter because of the rebates, though analysts say drugmakers should be able to book higher sales from selling more volume.
To compete, Lilly has dangled its own discounts. It has cut the average selling price of Zepbound to $750 to $800 a month, J.P. Morgan analysts estimated. Lilly said it doesn’t disclose net prices for specific products, but its prices reflect the value of the drugs.
The price competition will accelerate if additional weight-loss drugs come to market in the next few years. Analysts estimate an experimental weight-loss pill being developed by Lilly will be priced about 25% less than injected drugs such as Zepbound if the pill reaches the market.
The discounting ate into Novo Nordisk’s revenue. The company reported disappointing sales for the latest quarter because of the rebates, though analysts say drugmakers should be able to book higher sales from selling more volume.
To compete, Lilly has dangled its own discounts. It has cut the average selling price of Zepbound to $750 to $800 a month, J.P. Morgan analysts estimated. Lilly said it doesn’t disclose net prices for specific products, but its prices reflect the value of the drugs.
The price competition will accelerate if additional weight-loss drugs come to market in the next few years. Analysts estimate an experimental weight-loss pill being developed by Lilly will be priced about 25% less than injected drugs such as Zepbound if the pill reaches the market.
Yet even with the pricing wars, the drugs might still be too expensive for some patients if they don’t qualify for certain options or still must pay out of pocket.
When Lilly started selling vials containing the lower doses of Zepbound last month, the company directly charged patients paying cash, outside of their insurance plans, between $399 and $549 a month.
The pricing is more competitive with custom-made, or compounded, versions made by special pharmacies that can sell for less than $300 a month.
Yet, at the same time that it launched lower-priced vials, Lilly also reduced the subsidies it was providing to patients whose health plans didn’t cover Zepbound and who qualified for financial assistance from the drugmaker.
Their costs for a four-week supply of injection pens are rising to $650 a month from $550 a month previously, Lilly said.
The company said it made the change to help sustain the savings program. The company expects insurance coverage for Zepbound to improve, and people with coverage can pay as little as $25 a month under Lilly’s savings program.
Thomas Grillo doesn’t qualify for the Lilly savings program and couldn’t switch to a lower-cost vial because he is taking the highest dose of Zepbound, which isn’t available in vial form.
Grillo, 71, a retired journalist from Southborough, Mass., has paid more than $1,000 a month out of pocket since he started taking Zepbound injections this year because his Medicare plan doesn’t cover the drug.
The drug has helped Grillo lose more than 30 pounds, so he plans to keep paying for it out of pocket. He can afford it, but said, “It would be great if Wegovy and Zepbound were reasonably priced.”
Write to Peter Loftus at Peter.Loftus~wsj.com
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Last edited by JEY100 : Today at 13:59.
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