Novo Nordisk, Lilly weight loss drugs poised for price reductions: Cantor’s Louise Chen

A day after Novo Nordisk (NVO) CEO Lars Fruergaard Jørgensen was grilled by a U.S. Senate committee, Cantor Fitzgerald Managing Director Louise Chen noted that price relief is likely on the way due to several factors.

During Tuesday’s hearing, Jørgensen put much of the blame on high prices on pharmacy benefit managers.

In an appearance on CNBC’s “Squawk Box” Wednesday morning, Chen, who focuses on the pharma sector, said that a combination of drug supply increases, drug price negotiations, and additional weight loss drugs entering the market will all lead to lower prices for the popular medicines.

“The Street just has to be a little bit patient here,” she said, adding that patients should see improvements in affordability and accessibility.

Chen said that semaglutide, the active drug found in Novo’s Ozempic and Wegovy, will likely soon appear on the list of drugs that CMS will negotiate the price of due to the Inflation Reduction Act. Although that negotiation only impacts drug costs for Medicare beneficiaries, she added semaglutide accounts for some of the highest spending on Medicare-covered drugs.

And while Lilly noted in August that Mounjaro and Zepbound, its GIP/GLP-1 containing tirzepatide for, respectively, type 2 diabetes and weight loss, were no longer in shortage, the drugmaker hasn’t engaged in any direct-to-consumer advertising as that could again lead to supply issues, Chen noted.

Chen appeared as part of a panel on weight loss drugs at June’s Seeking Alpha Investing Summit. At that time, she said that if new entrants in the weight loss market, they have to show differentiation from existing meds. This could include that they are taken orally, dosed less frequently, preserve muscle mass, or are combination products.