Novo Nordisk's Profit Hinges on Trump's Weight-Loss Drug Price Cuts Amid Patent Losses
The Danish pharma giant behind the popular weight-loss drug Wegovy warned of a sharp drop in revenue this year due to US President Donald Trump's efforts to lower prescription medicine prices. The company's CEO Mike Doustdar attributed the decline, expected to be between 5% and 13%, to the "painful" impact of price cuts, patent expirations, and increased competition.
In response to Trump's pressure, Novo agreed to cut the prices of its weight-loss medications by over $650 per month, from more than $1,000 to an average of $350. The move is expected to significantly reduce sales for the company this year. However, Doustdar expressed optimism that lower prices would lead to higher volumes and boost future revenue.
Novo's shares plummeted 17% on Wednesday after announcing the forecast, wiping out all gains so far in 2023. The stock has lost nearly 50% of its value over the past year. In contrast, US rival Eli Lilly is forecasting stronger-than-expected sales and profit growth this year, driven by increased demand for its Mounjaro weight-loss medication.
GSK, Britain's second-largest drugmaker, also warned that it would see slower sales growth this year due to Trump's price-cutting measures and patent expirations. Despite these challenges, the company maintained its £40bn-plus sales target by 2031 and reported strong growth in its speciality medicine division last year.
Analysts have expressed concerns about the impact of Trump's efforts on the pharmaceutical industry, with some warning that the guidance set by GSK is "beatable". The outlook for Novo Nordisk remains uncertain as it navigates a challenging market landscape.
The Danish pharma giant behind the popular weight-loss drug Wegovy warned of a sharp drop in revenue this year due to US President Donald Trump's efforts to lower prescription medicine prices. The company's CEO Mike Doustdar attributed the decline, expected to be between 5% and 13%, to the "painful" impact of price cuts, patent expirations, and increased competition.
In response to Trump's pressure, Novo agreed to cut the prices of its weight-loss medications by over $650 per month, from more than $1,000 to an average of $350. The move is expected to significantly reduce sales for the company this year. However, Doustdar expressed optimism that lower prices would lead to higher volumes and boost future revenue.
Novo's shares plummeted 17% on Wednesday after announcing the forecast, wiping out all gains so far in 2023. The stock has lost nearly 50% of its value over the past year. In contrast, US rival Eli Lilly is forecasting stronger-than-expected sales and profit growth this year, driven by increased demand for its Mounjaro weight-loss medication.
GSK, Britain's second-largest drugmaker, also warned that it would see slower sales growth this year due to Trump's price-cutting measures and patent expirations. Despite these challenges, the company maintained its £40bn-plus sales target by 2031 and reported strong growth in its speciality medicine division last year.
Analysts have expressed concerns about the impact of Trump's efforts on the pharmaceutical industry, with some warning that the guidance set by GSK is "beatable". The outlook for Novo Nordisk remains uncertain as it navigates a challenging market landscape.
. Everyone's all worried about price cuts and patent expirations hurting pharma companies' profits, but have you considered the poor people who need those meds? Like, what's more important - Novo's bottom line or actually helping people lose weight and live healthier lives? I know some ppl say it's about supply & demand, but let's be real, if we just lower prices willy-nilly, ppl will just buy whatever's cheapest instead of actual quality meds. It's like saying "just make money wherever you can" is a good thing 
is super wild. Trump's pushing to cut prices down to $350 a month from $1,000, which is like, almost half the price! 
And it makes total sense that Novo's gonna take a hit - their sales are expected to drop by 5-13% this year, which is huge 
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. He thinks lower prices will lead to more volume and better future revenue 
? That's like a classic case of "we'll make it up in sales" thinking 
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Those guys are worried about Trump's price-cutting measures too, but they're still trying to maintain their sales target 
, where one wrong move could lead to disaster 
.
!
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. I'm not buying it...literally 
. Hasn't anyone noticed how quickly the pharmaceutical industry goes through CEOs when their stocks start tanking? 
Anyway, I guess we'll just have to wait and see how this all plays out 
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And if lower prices do lead to higher volumes, then that's a win-win 
GSK's outlook isn't looking great either, though... it's like they're walking on eggshells over there 
. Now, that's changed. Plus, Eli Lilly is doing well, so I guess there's still hope for the industry 
. And GSK's sales target? Still on track! 
. The world's full of twists and turns, right? 
. The question remains, will these lower prices lead to increased volume sales and boost future revenue as CEO Doustdar hopes? Only time will tell 
.
. But, I also get why the pharma companies are getting all salty about this 