I think Medicare prohibits payment for these drugs most of the time. To maximize profits it would seem that these companies would want to change that. Please explain
This is a sharp, real-world take, and it captures something many clinicians see from the trenches: Novo and Lilly don’t have to “win” by being the cheapest pill; they win by being the easiest drug to stay on. 
A few points that really land:
1. Obesity care is an access game. Formularies, prior auth friction, step therapy, and supply reliability often determine what patients end up taking more than a $50–$100/month list-price delta. “Market access and launch execution” is the right battleground description. 
2. Rebates ≠ price competition. Even when net prices fall through deeper rebates, the “signal” to patients and prescribers is still shaped by coverage rules and out-of-pocket design, not the headline list price. 
3. The compounding angle is also well-placed: the incumbents have strong incentives to undercut the logic of compounded alternatives (through access, copays, supply, and legal/regulatory pressure) rather than trigger a race-to-the-bottom that resets global pricing expectations. 
One “yes, and” given what’s happening now: the competitive arena is shifting toward delivery formats and convenience (vials, pens, oral GLP-1s) and toward channel strategy (cash-pay/DTC vs payer). Those moves can change patient adoption and persistence more than sticker price wars. 
Great post as it treats GLP-1s like what they are in 2025–2026, not just a drug class, but a logistics + reimbursement ecosystem.
Interesting! I agree that Novo having a head start on approval for an oral glp1 drug gives them an advantage in creating and retaining that market. I do still suspect though that some large percentage of DTC customers would be willing to switch to whatever drug, oral or injectable, is cheaper if it was a $100/month+ difference, which creates the space for DTC price competition.
Rebates are going away on Medicare. Without them the financials for insurance companies to cover them go belly up. Only much lower net prices will make it financially viable to cover these drugs.
I’m not even getting into some of the weirder aspects of the Ira that de-incentivize low copays.
The prices have to come down to where the compounders are or every pbm in Medicare is going to jack up the ded/copays/pa.
Thanks for the GLP commentary Ashwin! I enjoy reading your analysis. I tend to agree with your analysis and am a bit surprised about NVO and LLY stocks are both trading at a bit of a discount, given what seems to be on the horizon. Of course there's not an absolute certainty but this *feels* like one of those big discoveries that sets up long-term successes.
I think Medicare prohibits payment for these drugs most of the time. To maximize profits it would seem that these companies would want to change that. Please explain
This is a sharp, real-world take, and it captures something many clinicians see from the trenches: Novo and Lilly don’t have to “win” by being the cheapest pill; they win by being the easiest drug to stay on. 
A few points that really land:
1. Obesity care is an access game. Formularies, prior auth friction, step therapy, and supply reliability often determine what patients end up taking more than a $50–$100/month list-price delta. “Market access and launch execution” is the right battleground description. 
2. Rebates ≠ price competition. Even when net prices fall through deeper rebates, the “signal” to patients and prescribers is still shaped by coverage rules and out-of-pocket design, not the headline list price. 
3. The compounding angle is also well-placed: the incumbents have strong incentives to undercut the logic of compounded alternatives (through access, copays, supply, and legal/regulatory pressure) rather than trigger a race-to-the-bottom that resets global pricing expectations. 
One “yes, and” given what’s happening now: the competitive arena is shifting toward delivery formats and convenience (vials, pens, oral GLP-1s) and toward channel strategy (cash-pay/DTC vs payer). Those moves can change patient adoption and persistence more than sticker price wars. 
Great post as it treats GLP-1s like what they are in 2025–2026, not just a drug class, but a logistics + reimbursement ecosystem.
Oo interesting! What are your thoughts on Novo Nordisk and Eli Lilly now both using 9amHealth and Form Health as their telehealth partners?
Interesting! I agree that Novo having a head start on approval for an oral glp1 drug gives them an advantage in creating and retaining that market. I do still suspect though that some large percentage of DTC customers would be willing to switch to whatever drug, oral or injectable, is cheaper if it was a $100/month+ difference, which creates the space for DTC price competition.
Rebates are going away on Medicare. Without them the financials for insurance companies to cover them go belly up. Only much lower net prices will make it financially viable to cover these drugs.
I’m not even getting into some of the weirder aspects of the Ira that de-incentivize low copays.
The prices have to come down to where the compounders are or every pbm in Medicare is going to jack up the ded/copays/pa.
Thanks for the GLP commentary Ashwin! I enjoy reading your analysis. I tend to agree with your analysis and am a bit surprised about NVO and LLY stocks are both trading at a bit of a discount, given what seems to be on the horizon. Of course there's not an absolute certainty but this *feels* like one of those big discoveries that sets up long-term successes.