Has the golden era of GLP-1 drugs come to an end?

Theoretically, in the U.S. market, the list price of an innovative drug during its patent exclusivity period remains relatively stable—even when competitors enter the market, their list prices tend to stay close, with competition manifesting primarily in net pricing (i.e., post-rebate, post-discount prices), especially as new entrants aggressively cut net prices to gain market share. However, this rule applies only to diseases with relatively stable patient populations. In the case of obesity—a condition affecting a vastly larger population than typical chronic diseases—the competitive dynamic becomes exceptionally fierce, even with just two major players. As early as Q1 2025, Eli Lilly’s tirzepatide had already overtaken Novo Nordisk’s semaglutide across key metrics: total prescriptions and new prescriptions. In the U.S. weight-loss drug market specifically, Zepbound (tirzepatide’s obesity indication) captured 60% of total prescriptions and 74% of new prescriptions—significantly surpassing Wegovy (semaglutide’s obesity indication). Faced with Lilly’s aggressive advance, Novo Nordisk launched a counteroffensive—and price became its most potent weapon. First, CVS, the largest U.S. pharmacy benefit manager (PBM), announced it would remove Zepbound from its preferred drug list effective July 1, 2025, retaining only Wegovy. This decision effectively excluded Zepbound from coverage by nearly one-third of U.S. payers. Subsequently, both companies engaged in Most-Favored-Nation (MFN) price negotiations with the White House, establishing direct-to-consumer (DTC) self-pay prices: ・ Ozempic and Wegovy list prices will drop from $1,000/month and $1,350/month respectively to $350/month. ・ Zepbound and the upcoming oral GLP-1 drug orforglipron will see their $1,086/month list price reduced to an average of $346/month. ・ FDA-approved Wegovy tablets—or any company’s newly launched oral GLP-1 drugs—will offer their initial-dose regimens at $150/month. By 2026, the initial-dose pricing for both Wegovy and Zepbound is set to fall to an average of $350/month—only a modest reduction from Zepbound’s prior $399/month, but a notable drop from Wegovy’s previous $499/month. Under the agreement, both drugs must lower their initial-dose price to $250/month by no later than 2028. Yet as early as late November 2025, Novo Nordisk had already slashed Wegovy’s price for new users to $199/month for the first two months. Finally, Novo Nordisk confirmed it will reduce Wegovy’s list price from $1,349 to $675 by 2027—leaving further room for net-price reductions. Thus, GLP-1 price competition will intensify markedly in 2026. Under mounting pressure, Novo Nordisk lowered its 2026 financial guidance alongside its 2025 earnings release, forecasting a 5–13% decline in sales. Nonetheless, U.S. prescription data clearly indicate a broad-based slowdown in GLP-1 demand.

Navigating the price storm: How are GLP-1 drugs reshaping competitive logic in the ‘20% era’?

Original content / translation / compilation requires effort—feel free to share this article on WeChat Moments; institutional reprints require whitelisting authorization via our official WeChat account. For more high-quality articles, please follow our WeChat public account: “Chunhui Capital”. Once hailed as a “one-drug-worth-a-thousand-gold” miracle in capital markets, GLP-1 drugs—renowned for their remarkable efficacy in weight loss and glycemic control—are now entering an unprecedented “20% era,” driven by deepening health insurance negotiations and intensifying market competition. The former “drug king’s” premium-pricing halo has dimmed, and the entire industry appears thrust into a brutal elimination race. Yet the GLP-1 story is far from over: news that DR10624—a globally first-in-class, triple-target agonist developed by Da’er Biotech (a subsidiary of Huadong Medicine)—has been designated a Breakthrough Therapy by China’s Center for Drug Evaluation (CDE) flashes like lightning across an otherwise quiet landscape, signaling that beyond price-driven commoditization, transformative innovation is quietly taking root. The Market Logic Behind the “Myth’s Demise” Recent market reports confirm steep price cuts for GLP-1 star drugs—semaglutide and tirzepatide—in both the U.S. and Chinese markets. Yet the drivers, mechanisms, and magnitudes of these price reductions differ significantly between the two markets. U.S.: Volume-for-Price Trade-Off, Government-Led Structural Price Reduction The U.S. price cuts stem from formal agreements between government agencies and pharmaceutical companies (e.g., the “Balancing Initiative”), whose core objective is to secure Medicare’s first-ever coverage of obesity indications in exchange for substantial price reductions—a move dubbed by netizens as the “U.S. version of volume-based procurement.” • Core mechanism: Agreement-based pricing establishes a new federal payment anchor ($245/month for Medicare), which also exerts downward pressure on self-pay market prices—addressing both exorbitant list prices (previously >$1,000/month) and access barriers. • Future implications: Newly approved oral GLP-1 agents—such as the oral semaglutide tablet—at lower entry prices (e.g., $149/month) may further reshape competitive dynamics. China: Intensified Competition + Health Insurance Pressure Driving Broad-Based Price Cuts In China, price reductions reflect the combined impact of market rivalry, national health insurance negotiations, and anticipated launches of domestic biosimilars. • Core drivers: ① Health insurance leadership: Implementation of the latest National Reimbursement Drug List (NRDL) includes tirzepatide (for diabetes only); semaglutide was previously added. Negotiated prices now define reimbursement benchmarks. ② Market-driven price cuts: To preempt the 2026 patent expiry of semaglutide and the imminent arrival of numerous domestic biosimilars, originator companies have proactively slashed prices—by as much as 80% (“20% of original price”)—across online and off-hospital channels, aiming to capture market share and enhance patient loyalty. The biggest distinction between the two markets lies in reimbursement scope: In China, health insurance reimbursement remains strictly limited to type 2 diabetes indications; weight-loss use remains fully out-of-pocket. Nevertheless, broad-based price reductions benefit even self-paying patients. The arrival of the “20% era” is no coincidence—it is the inevitable outcome of profound transformation on China’s payer side, dramatic shifts in competitive structure, and fundamental industry dynamics. From the demand side, the establishment of China’s National Healthcare Security Administration (NHSA) and the institutionalization of centralized drug procurement have fundamentally rewritten the rules of the game. The healthcare fund has evolved from a passive payer into a strategic purchaser—its central mandate being to acquire clinically valuable medicines at reasonable prices. For GLP-1 drugs—especially mature products like semaglutide—achieving broad patient access and commercial scale through “volume-for-price” inclusion in the NRDL has become the critical pathway forward.

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CVS says GLP-1s save money when priced below $350 per month

CVS says GLP-1s save money when priced below $350 per month

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