Will cheaper weight-loss drugs slim down stocks?

Weight-loss drug makers may need to tighten their belts now that President Trump has announced plans to trim the price of these popular treatments.

In a press conference Thursday, Trump unleashed off-the-cuff plans to put the sizable profits of “fat-loss drugs” on a crash diet. The list price of GLP-1 treatments like Ozempic and Wegovy currently run around $1,000 per month. But Trump said, “Those are going to be $150 out of pocket.” These cost cuts have not been negotiated yet, but Trump vowed that they’d happen “pretty fast.”

Although this news might thrill anyone hoping to slim down without emptying their wallets, the companies behind these blockbuster drugs suffered stomach-dropping losses today. Novo Nordisk, maker of Wegovy and Ozempic, dropped 3.07%, while Eli Lilly, maker of Zepbound, lost 2.02%.

Trimming the fat

Trump is working to whittle down a wide variety of medication costs. After putting a 100% tariff on brand-name or patented pharmaceuticals made outside the US, firms including Pfizer, Merck, and AstraZeneca have haggled for tariff moratoriums by promising to lower prices. No huge surprise, then, that Novo and Eli have popped up as Trump’s next targets.

But whether these industry heavyweights will suffer permanent downsizing is unclear, since they’ve already begun bending to public pressure to pare down prices. Eli Lilly offers a version of Zepbound starting at $350 a month; Novo’s monthly cash option for Ozempic and Wegovy is $499. The catch? You’ll need to draw the syringes yourself rather than use ready-to-go injector pens, which could be worth it if you’re determined to squeeze into your skinny jeans for cheap.

“The CEOs of both Novo and Lilly have expressed a desire to reduce GLP-1 pricing, but not as aggressively as this,” president of healthtech platform Impiricus Sandy Donaldson told Brew Markets. “In the short term, pricing pressure and political theater are shaking investor confidence.” But in the long run, he thinks that the applications and demand for these drugs are expanding so fast, “Pricing will normalize, but volume is going to scale massively. That tradeoff still benefits the manufacturers.”

Worth considering: With weight-loss drugmakers on shaky ground, one health care company is hedging its bets. After trying to butt into the weight-loss drug industry with middling success, angering big boys Eli and Novo, Hims & Hers Health has explored other avenues for growth and hit upon a humdinger: menopause treatments, which are expected to pad annual revenue by over $1 billion next year. It’s a good reminder that it pays to not put all your eggs in one weight-loss basket, as big as it may be.—JD