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Can LLY Strengthen Its Lead as GLP-1 Price Cuts Reshape the Market?
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Key Takeaways
LLY trims Zepbound prices and broadens access as competition with Novo Nordisk intensifies.
NVO has started implementing semaglutide price cuts aimed at expanding access and regaining share.
Lower GLP-1 prices for both leaders raise concerns about margins amid rapidly expanding patient volumes.
Eli Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) , long-standing rivals and the two dominant forces in the GLP-1 obesity market, are now locked in an intensified battle as both companies slash prices to defend and expand their market positions amid soaring demand. Lilly announced meaningful price cuts to its tirzepatide-based obesity drug Zepbound, reducing out-of-pocket costs on its LillyDirect platform to as low as $299 for the starter dose and $449 for higher doses, just weeks after negotiating a separate price-cut agreement with the Trump Administration to secure Medicare access and tariff relief. The price cut agreement announced in early November was for a different form of Zepbound, administered via a multi-dose pen, and its investigational obesity pill, orforglipron, provided that both receive FDA approval. Zepbound’s Lower pricing should substantially widen the addressable patient population, with improved affordability enabling broader adoption across both insured and self-pay segments.
Novo Nordisk, however, is aggressively countering Lilly’s momentum with its own sweeping price actions across its semaglutide portfolio, including Wegovy (obesity) and Ozempic (diabetes). After federal pressure and negotiations with the U.S. Administration, NVO committed to reducing monthly prices for these therapies to $350 through the upcoming TrumpRx platform, with Medicare and Medicaid paying $245 and oral versions potentially priced as low as $150 pending approval, in exchange for tariff relief. The company has already begun implementing major cuts ahead of the 2026 rollout, offering introductory self-pay prices of $199 for new patients and lowering standard self-pay pricing for most doses to $349. These moves are strategically designed to expand access, regain market share eroded by Lilly’s tirzepatide franchise, and battle the presence of compounded semaglutide in the market.
For both companies, the aggressive pricing reset marks the beginning of a new phase in the obesity-drug battle. While lower prices and expanded insurance coverage will unlock vast new patient populations and likely drive further prescription volume, they also raise critical questions about future profitability at a time when these therapies have become the financial engines of both firms. The magnitude of margin compression remains speculative.
Lilly’s broader portfolio strength and strong tirzepatide demand may help cushion profitability, while Novo Nordisk faces more visible downside risks given its heavy reliance on semaglutide for top-line growth and ongoing cost-cutting efforts. Ultimately, the long-term economic impact for both leaders will depend on how effectively they scale manufacturing, convert lower prices into higher volumes, and continue innovating in an increasingly competitive GLP-1 landscape.
Competition Heating Up in the Obesity Space
Several other companies, like Amgen (AMGN - Free Report) and Viking Therapeutics (VKTX - Free Report) , are also making rapid progress in the development of GLP-1-based candidates in their clinical pipeline.
Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity. In June, VKTX started two late-stage studies evaluating the subcutaneous formulation of its investigational obesity drug, VK2735. While one of these studies recently completed enrolment at a rapid pace, the company expects to complete enrolment in the other study by early 2026.
Amgen is developing MariTide, a GIPR/GLP-1 receptor, as a single dose in a convenient autoinjector device with a monthly and maybe less frequent dosing in a broad phase III program targeting obesity and diabetes. This key feature differentiates it from Zepbound and Wegovy, which are weekly injections. In clinical studies, it has shown predictable and sustained weight loss and a clinically meaningful impact on cardiometabolic parameters. Amgen has launched a broad phase III program for MariTide targeting obesity and diabetes.
LLY’s Stock Price, Valuation and Estimates
Shares of Eli Lilly have gained 26.1% in the past year compared with the industry’s 8.5% growth. The company has also outperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.
LLY Stock Price Movement
Image Source: Zacks Investment Research
From a valuation standpoint, Lilly’s stock is expensive. Going by the price/earnings ratio, the company’s shares currently trade at 32.11 forward earnings, higher than 17.00 for the industry. However, the stock is trading below its five-year mean of 34.54.
LLY Stock Valuation
Image Source: Zacks Investment Research
Estimates for Eli Lilly’s 2025 earnings have improved from $23.10 to $23.91 per share in the past 60 days, and estimates for 2026 earnings have improved from $30.84 to $33.30 over the same time frame.
Image: Bigstock
Can LLY Strengthen Its Lead as GLP-1 Price Cuts Reshape the Market?
Key Takeaways
Eli Lilly (LLY - Free Report) and Novo Nordisk (NVO - Free Report) , long-standing rivals and the two dominant forces in the GLP-1 obesity market, are now locked in an intensified battle as both companies slash prices to defend and expand their market positions amid soaring demand. Lilly announced meaningful price cuts to its tirzepatide-based obesity drug Zepbound, reducing out-of-pocket costs on its LillyDirect platform to as low as $299 for the starter dose and $449 for higher doses, just weeks after negotiating a separate price-cut agreement with the Trump Administration to secure Medicare access and tariff relief. The price cut agreement announced in early November was for a different form of Zepbound, administered via a multi-dose pen, and its investigational obesity pill, orforglipron, provided that both receive FDA approval. Zepbound’s Lower pricing should substantially widen the addressable patient population, with improved affordability enabling broader adoption across both insured and self-pay segments.
Novo Nordisk, however, is aggressively countering Lilly’s momentum with its own sweeping price actions across its semaglutide portfolio, including Wegovy (obesity) and Ozempic (diabetes). After federal pressure and negotiations with the U.S. Administration, NVO committed to reducing monthly prices for these therapies to $350 through the upcoming TrumpRx platform, with Medicare and Medicaid paying $245 and oral versions potentially priced as low as $150 pending approval, in exchange for tariff relief. The company has already begun implementing major cuts ahead of the 2026 rollout, offering introductory self-pay prices of $199 for new patients and lowering standard self-pay pricing for most doses to $349. These moves are strategically designed to expand access, regain market share eroded by Lilly’s tirzepatide franchise, and battle the presence of compounded semaglutide in the market.
For both companies, the aggressive pricing reset marks the beginning of a new phase in the obesity-drug battle. While lower prices and expanded insurance coverage will unlock vast new patient populations and likely drive further prescription volume, they also raise critical questions about future profitability at a time when these therapies have become the financial engines of both firms. The magnitude of margin compression remains speculative.
Lilly’s broader portfolio strength and strong tirzepatide demand may help cushion profitability, while Novo Nordisk faces more visible downside risks given its heavy reliance on semaglutide for top-line growth and ongoing cost-cutting efforts. Ultimately, the long-term economic impact for both leaders will depend on how effectively they scale manufacturing, convert lower prices into higher volumes, and continue innovating in an increasingly competitive GLP-1 landscape.
Competition Heating Up in the Obesity Space
Several other companies, like Amgen (AMGN - Free Report) and Viking Therapeutics (VKTX - Free Report) , are also making rapid progress in the development of GLP-1-based candidates in their clinical pipeline.
Viking Therapeutics’ dual GIPR/GLP-1 receptor agonist, VK2735, is being developed both as oral and subcutaneous formulations for the treatment of obesity. In June, VKTX started two late-stage studies evaluating the subcutaneous formulation of its investigational obesity drug, VK2735. While one of these studies recently completed enrolment at a rapid pace, the company expects to complete enrolment in the other study by early 2026.
Amgen is developing MariTide, a GIPR/GLP-1 receptor, as a single dose in a convenient autoinjector device with a monthly and maybe less frequent dosing in a broad phase III program targeting obesity and diabetes. This key feature differentiates it from Zepbound and Wegovy, which are weekly injections. In clinical studies, it has shown predictable and sustained weight loss and a clinically meaningful impact on cardiometabolic parameters. Amgen has launched a broad phase III program for MariTide targeting obesity and diabetes.
LLY’s Stock Price, Valuation and Estimates
Shares of Eli Lilly have gained 26.1% in the past year compared with the industry’s 8.5% growth. The company has also outperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.
LLY Stock Price Movement
From a valuation standpoint, Lilly’s stock is expensive. Going by the price/earnings ratio, the company’s shares currently trade at 32.11 forward earnings, higher than 17.00 for the industry. However, the stock is trading below its five-year mean of 34.54.
LLY Stock Valuation
Estimates for Eli Lilly’s 2025 earnings have improved from $23.10 to $23.91 per share in the past 60 days, and estimates for 2026 earnings have improved from $30.84 to $33.30 over the same time frame.
LLY Estimate Movement
Eli Lilly currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.