Yahoo FinanceNovo, Lilly Slide After Biden Calls for Cheaper Obesity Drugs

(Bloomberg) -- Novo Nordisk A/S and Eli Lilly & Co. shares fell Tuesday after US President Joe Biden continued his push for cheaper drugs by demanding price cuts on their blockbuster weight-loss and diabetes drugs.
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The companies are charging “unconscionably high prices” that are above those paid in other countries, Biden said in an editorial with Vermont Senator Bernie Sanders published 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, while Lilly shares lost as much as 3.9% before paring losses in New York.
“Comparing list prices in the United States to other countries ignores patient affordability programs,” as well as billions of dollars in discounts and fees paid to pharmacy benefit managers that should lower the costs, a Lilly spokesperson said in an emailed statement. “Unfortunately this system can drive prices higher.”
Novo Nordisk did not immediately respond to request for comment.
Analysts foresee exploding sales for the injected medicines, particularly in fighting obesity, a market that Goldman Sachs estimates may reach $130 billion annually by the end of the decade. Companies including Pfizer Inc., AstraZeneca Plc and Amgen Inc., along with a host of small biotechs, are racing to get competing products to consumers.
A Bloomberg News/Morning Consult poll from May — six months before the US election — showed that voters in swing states trust Biden over Republican presidential frontrunner Donald Trump on health care to the tune of 45% to 39%. Specifically on health-care costs, Biden held a four-percentage point advantage over Trump at 44%.
Biden’s comments seem like “a last-ditch effort to appease certain voters,” according to a note from Mizuho’s Jared Holz. In view of the drugs’ benefits in diabetes, heart disease and other conditions, he said the price of around $1,000 a month “actually seems very inexpensive.”
Drug costs have been a long-running focus for the Biden administration. The Inflation Reduction Act has given Medicare, the US health program for seniors, unprecedented power to negotiate prices once drugs have been on the market for a certain period of time. Novo’s Ozempic and Wegovy became a prime concern for Sanders earlier this year, after a study showed that Ozempic could be profitably produced for less than $5 a month.