President Biden has signaled that if companies like Novo Nordisk (NOVOB.DK) and Eli Lilly (LLY.US) refuse to significantly reduce the price of prescription drugs in the United States, the government will do everything it can to put an end to the greed prevalent in the pharmaceutical industry.
Along with Senator Sanders, government officials pointed to the obesity formulations Ozempic and Wegova, which are putting pressure on Novo Nordisk’s shares. Anti-obesity drugs are a key revenue driver for both Novo Nordisk and Eli Lilly, so the potential price cuts on key products are a clear reaction from investors, who have been weighing the revenue potential in this rapidly growing market for the past few months.
The president’s statement also boosted the share price of Eli Lilly, an American company that, along with Novo Nordisk, is a major player in the anti-obesity drug market. In pre-market trading, the company lost more than -1.3%.
Biden’s speech continues the policy of strong negotiations on drug prices in the United States under the Inflation Reduction Act (IRA). Pharmaceutical companies (including Astra Zeneca) attempted to stop the presidential administration’s moves by taking the case to court as an illegal attack on their freedom to conduct business, but the lawsuit was dismissed, according to the court’s decision.
Response to President Biden’s Statements. Source: xStation
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