President Donald Trump just dropped a political bomb into one of Wall Street's hottest trades. His promise to cut the cost of Novo Nordisk A/S (NYSE:NVO) blockbuster drug Ozempic from around $1,300 to $150 isn't just about affordability—it's about shaking the foundations of the GLP-1 gold rush that's reshaped healthcare valuations from Eli Lilly And Co (NYSE:LLY) to Pfizer Inc (NYSE:PFE).
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The Ozempic Shockwave
Trump's remark, made during a White House event on drug pricing, instantly turned Novo Nordisk into a lightning rod for the administration's push to lower costs. The company confirmed discussions with the government under the Most Favored Nation executive order, but declined to comment on specifics.
For investors, that silence speaks volumes. Novo's semaglutide franchise—Ozempic for diabetes and Wegovy for obesity—has powered a meteoric stock run, accounting for more than half of its 2024 revenue. But with talk of a federally negotiated $150 price cap, those once fat margins could slim fast.
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Lilly's Margin Mirage
The tremors extend to Eli Lilly, whose GLP-1 drugs Mounjaro and Zepbound dominate the U.S. obesity market. Like Novo, Lilly's earnings have been juiced by massive markups on weekly injectables. Any precedent set by Novo's pricing talks could corner Lilly into following suit—or risk a public backlash that outweighs short-term gains.
Even a 20% cut in average selling price could trim several billion off projected 2025 operating income.
The Underdogs' Opening
Ironically, Trump's pricing play might give lagging pharma players a new lease on life. Pfizer, whose oral GLP-1 candidate faltered in trials, could re-emerge as investors rotate toward lower-cost, pill-based alternatives if pricing caps level the playing field.
Amgen Inc (NASDAQ:AMGN), developing a dual-agonist version that promises longer-lasting effects, might also benefit from investor appetite shifting from high-priced incumbents to next-gen challengers.
Trump's price-cut crusade could redraw the leaderboard in the weight-loss wars. Novo Nordisk and Eli Lilly may see their margins melt faster than their patients' pounds, while Pfizer and Amgen get a second shot at the GLP-1 crown. If the White House forces a reset, the winners won't be the fattest companies—they'll be the leanest.
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