KEY TAKEAWAYS:
Shares of Novo Nordisk and Eli Lilly declined after President Biden and Senator Bernie Sanders criticized the companies for high drug prices.
The critique, made in an op-ed, highlighted the costs of Novo Nordisk’s Wegovy and Eli Lilly’s Mounjaro as “outrageous.”
Biden and Sanders threatened legislative action if drug prices are not significantly reduced.
Shares of Novo Nordisk (NVO) and Eli Lilly (LLY) fell on Tuesday following public criticism from President Joe Biden and Senator Bernie Sanders regarding the cost of their weight-loss medications. In a published op-ed, Biden and Sanders accused pharmaceutical companies of imposing “outrageous prices” on consumers, specifically naming Novo Nordisk’s Wegovy and Eli Lilly’s Mounjaro as prime examples of excessively priced treatments.
Biden and Sanders issued a stark warning to the pharmaceutical industry, stating that if companies like Novo Nordisk do not “substantially lower prescription drug prices,” they will take legislative measures to enforce such reductions. They singled out Novo Nordisk, urging the company to cut the price of Ozempic and Wegovy, which currently cost over $1,000 per month despite production costs of under $5.
Novo Nordisk expressed disappointment over the statements, claiming the complex issue was being oversimplified for political gain. The company noted that more than 80% of insured Americans pay $25 or less per month for these medications. Eli Lilly did not immediately provide a comment.
Despite the public rebuke, Novo Nordisk ADRs saw a 1.7% drop, closing at $142.98, and Eli Lilly shares fell 0.8% to $906.71. Nevertheless, Novo Nordisk’s ADRs have risen by over 38% since the beginning of the year, while Eli Lilly’s shares have increased by more than 55%.
As the debate over drug pricing intensifies, the pharmaceutical industry faces mounting pressure from both political leaders and the public to make life-saving medications more affordable.
