Published by Global Banking & Finance Review®
Posted on February 4, 2026
5 min readLast updated: February 4, 2026
Add as preferred source on GoogleNovo Nordisk risks a price war in the weight-loss drug market due to Wegovy price cuts, impacting revenues amid competition with Lilly.
By Maggie Fick, Jacob Gronholt-Pedersen and Bhanvi Satija
LONDON, Feb 4 (Reuters) - Danish obesity drug maker Novo Nordisk's new CEO risks being on the losing side of a damaging price war as "unprecedented" price pressure forces it to slash the cost of its blockbuster Wegovy drug in the United States, analysts and investors said.
Novo, which like U.S. rival Lilly was forced to cut prices in its biggest market under pressure from U.S. President Donald Trump, launched its Wegovy pill last month at a discount to the injection to lure self-paying customers. It shares sank 17% on Wednesday after warning of a drop in revenues and profit this year of up to 13%.
CEO Mike Doustdar, who took the helm last year after the company lost its lead in the market to Lilly, said Novo would accept short-term pain to lift volumes, arguing that lowering prices would pay off in the long-run. But investors warned it may come off worse in any race to the bottom with market leader Lilly, which on Wednesday posted a far more optimistic outlook.
"The real danger arises from a potential price war between both companies struggling for market share, which would be a no-win situation," said Markus Manns, a portfolio manager at Union Investment that holds Novo and Lilly shares.
"There is no assurance that the price cuts will pay off."
After the launches of Wegovy in 2021 and Lilly's rival Zepbound in 2023, the injectable drugs retailed for about $1,000 per month in pharmacies. Faced with political pressure to lower costs in the U.S., coupled with more people paying out of their own pocket rather than through healthcare schemes, they are now sold on company websites starting at $149 to $299.
Novo, which pointed to higher-than-anticipated prescriptions of its Wegovy pill just launched to complement its injection, has been forced to salve investor fears about lower prices denting revenues and margins. Its message on Wednesday: "bear with us".
"We are quite optimistic about the future, but have to recognise that short term, pricing reduction takes a toll on our financials," Doustdar told reporters, adding it would help Wegovy gain ground on Lilly's injection Zepbound.
Zepbound injection prescriptions totalled 469,000 in the week to January 23, versus some 257,000 total Wegovy injection and oral prescriptions, according to IQVIA data cited in an analyst note, which does not capture some oral prescriptions.
Zepbound has the clinical edge with higher weight loss than the Wegovy injection, while the pill form of Wegovy delivered better weight loss in trials than Lilly's own pill which it expects to be approved in April.
'NO-ONE WAS EXPECTING THIS MUCH PRESSURE'
Some investors who had welcomed Doustdar taking quick action to address weak U.S. performance more forcefully are now questioning just how much pain this will entail.
"Novo already said previously that the volume game will take time to manifest," said Lukas Leu, a portfolio manager at Novo Nordisk shareholder ATG Healthcare, who said a key question was how conservative management was being with their guidance.
"But no-one was expecting this much pressure."
"We are seeing a volume response to the lower prices...but net-net it is price declines that drives U.S. (sales this year) down", CFO Karsten Munk Knudsen told analysts on Wednesday.
GLP-1 MARKET GETTING 'VERY CROWDED'
Both Novo and Eli Lilly are valued as though the obesity market will remain a duopoly, with years of strong pricing power and expanding margins, noted Union Investment's Manns.
However, the market for so-called GLP-1 drugs is getting increasingly competitive, while the broader shift to consumer-driven cash-pay channels is making price points more sensitive.
"On GLP-1s now... I think it's going to be very crowded," said Luke Miels, CEO of British drugmaker GSK on Wednesday, adding the firm would keep its focus on the downstream effects of obesity like liver disease.
The competition comes in the form of copycat compounded versions of GLP-1 weight-loss drugs - Novo estimates as many as 1.5 million Americans are on them - and soon from other major drugmakers like Pfizer and Amgen which could launch rival products in 2028.
Bernstein analyst Courtney Breen said price cuts in Novo's current competitive situation were risky given it was behind Lilly in the race.
"Striking a deal for a price reduction and pull-forward of government channel makes sense if you're in the leadership position in the market and growing," she said.
"It does not make sense if you are losing share and already facing year-on-year declines."
Doustdar, however, countered that lower prices would mean higher volumes by year end.
"If you're working in product supply and manufacturing, you're going to be producing a lot more boxes of whatever than you did in 2025. That's growth," he said.
(Reporting by Maggie Fick in London, Jacob Gronholt-Pedersen in Copenhagen, and Bhanvi Satija in London;Additional reporting by Stine Jacobsen in Copenhagen;Editing by Adam Jourdan and Elaine Hardcastle)
A price war occurs when competing companies lower prices to attract customers, often leading to reduced profit margins for all involved.
Market capitalisation is the total market value of a company's outstanding shares, calculated by multiplying the share price by the total number of shares.
Investor sentiment refers to the overall attitude of investors toward a particular security or financial market, often influenced by news, trends, and economic indicators.
A blockbuster drug is a pharmaceutical product that generates annual sales of over $1 billion, often due to its widespread use and effectiveness.
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