Great article, thanks. I'd love to read your analysis of why Lilly seems to have been more successful stopping compounding of tirzepatide than Novo has been with sema. I've been curious about that.
Also it's worth noting that rhybelsus uses much more semaglutide per dose than the injectable, so that a small amount of that can survive the stomach. Also, the additional ingredients and processes to manufacture the semaglutide pills are much more complicated than the injections. This could make it harder for compounders to compete on price for pills, because their API cost and manufacturing complexity will go up.
The best part of this piece was you emerging from 10 days of silent meditation (Vipassana? I know it well :-)...) to find the world you watch has undeniably altered!
I'm not a fan of pharma solutions in general. Yet, I'm interested to watch this profiteering pov as well as the psychology around this particular drug phenomenon. I'm watching - friends and family included - to see longer-term physical and psychological health ramifications to individuals and societies. To me, this pharma panacea is macabre - with some important exceptions.
I appreciate your tracking and analysis and writing. I hope you apply it to other realms beyond glp-1.
Novo earn 25% of the ridiculous US list prices, brought to you by the PBM’s who truly take advantage of the ignorant americans. Blaming Novo won’t change a thing cause Novo isn’t the problem. But they’re a perfect scape goat.
Don't you think Novo is suspiciously ignoring the elephant in the room, being that tirzepatide is a substantially superior drug that is sold at the same (or lower) price point? Lilly just did their earnings call, and they reported huge growth in their direct to consumer vials, with not much mention of the impact of compounding. It seems to me that Novo is stubbornly maintaining prices amid competition, while Lilly is eating their lunch in market share
The new Medicare prices for glp1 should get released soon. That will I’ve you a good idea of their strategy.
Right now the compounders are simply selling it near the post rebate prices. Novo could do the same and cut them out if they gave up their rebate strategy.
I think GLP1s are unique and pharma companies cannot rely on the standard pricing model of charging a ton during the patent protected period. They are extremely easy to make - you can literally buy "next gen" GLP1s right now, it's completely legal as long as you don't inject it.
Instead I think they'll have to use more traditional tactics such as touting increased safety, price, availability, maybe even partnering with some competitor distributors. The market here is so incredibly huge I really believe there's plenty of profit to go around.
Compounders aside, there are, what, a dozen new GLP1s in trials? Even within the patented space there is going to be a ton of competition. Novo is still on the backfoot here, Cagrisema looks very promising but not as good as retatrutide
Is there anything they can do to put pressure on insurance companies to cover the medication for more people? A big reason I see people turning to compounding is they can't get coverage for weight loss unless they have type II or sleep apnea. I think most people would prefer to get the name brand medications but they have to seek alternate routes when their insurance denies them.
I would have assumed insurance would do this on their own, they'd presumably save a ton of money by outlaying the cash for 1-2 years of GLP1 now and avoiding more catastrophic obesity related health problems later.
My pessimistic view is insurance companies are playing the long bet that more people will die of complications from obesity than will require catastrophic care. The crux being insurance companies are motivated by profits, not health outcomes.
From a societal standpoint, would it be advantageous for a government to subsidize these drugs to have a healthier more productive populace?
I get that the cost is high and I think there is likely a middle ground for cost that could be found, but producing drugs is expensive and profits drive innovation so I see the case for Novo wanting to make their money. They made a game-changing medication that is going to save and improve a lot of lives. That is really valuable. How do you balance access and also them getting compensated for the value they have created?
How about the PBM’s stopped taking advantage of americans? Easy to just blame Novo cause the entrenched corruption in the US is harder to attack than a foreign company. Especially now that Trump and his Project 2025 administration is all about total corruption, waste, fraud and abuse.
Can you describe to me, in detail, how the PBMs force Novo to price Ozempic higher? Last time I checked every single PBM tries to drive the price of the drug down as far as they can, but the manufacturer has monopoly pricing power.
Trump is probably the best hope for lower GLP1 prices. When Biden negotiated drugs in 2026 he got WORSE prices then the PBMs, and everyone thinks its a joke. By contrast Trump has released a lot of memos saying that he's going to pursue best in class OECD pricing, which would be much lower than the PBMs get today on GLP1s. The price he negotiates for GLP1s should be released soon.
You don't seem to know much about how the drug market works.
I guess they never considered the strategy of *checks notes* charging less…
Did you read the end of the article?
Great article, thanks. I'd love to read your analysis of why Lilly seems to have been more successful stopping compounding of tirzepatide than Novo has been with sema. I've been curious about that.
Also it's worth noting that rhybelsus uses much more semaglutide per dose than the injectable, so that a small amount of that can survive the stomach. Also, the additional ingredients and processes to manufacture the semaglutide pills are much more complicated than the injections. This could make it harder for compounders to compete on price for pills, because their API cost and manufacturing complexity will go up.
The best part of this piece was you emerging from 10 days of silent meditation (Vipassana? I know it well :-)...) to find the world you watch has undeniably altered!
I'm not a fan of pharma solutions in general. Yet, I'm interested to watch this profiteering pov as well as the psychology around this particular drug phenomenon. I'm watching - friends and family included - to see longer-term physical and psychological health ramifications to individuals and societies. To me, this pharma panacea is macabre - with some important exceptions.
I appreciate your tracking and analysis and writing. I hope you apply it to other realms beyond glp-1.
I hear the world's smallest violin playing for poor Novo Nordisk not being able to milk American fat people for every last penny they own.
Novo earn 25% of the ridiculous US list prices, brought to you by the PBM’s who truly take advantage of the ignorant americans. Blaming Novo won’t change a thing cause Novo isn’t the problem. But they’re a perfect scape goat.
Awesome article thx
Don't you think Novo is suspiciously ignoring the elephant in the room, being that tirzepatide is a substantially superior drug that is sold at the same (or lower) price point? Lilly just did their earnings call, and they reported huge growth in their direct to consumer vials, with not much mention of the impact of compounding. It seems to me that Novo is stubbornly maintaining prices amid competition, while Lilly is eating their lunch in market share
What a great article.
The new Medicare prices for glp1 should get released soon. That will I’ve you a good idea of their strategy.
Right now the compounders are simply selling it near the post rebate prices. Novo could do the same and cut them out if they gave up their rebate strategy.
I think GLP1s are unique and pharma companies cannot rely on the standard pricing model of charging a ton during the patent protected period. They are extremely easy to make - you can literally buy "next gen" GLP1s right now, it's completely legal as long as you don't inject it.
Instead I think they'll have to use more traditional tactics such as touting increased safety, price, availability, maybe even partnering with some competitor distributors. The market here is so incredibly huge I really believe there's plenty of profit to go around.
Compounders aside, there are, what, a dozen new GLP1s in trials? Even within the patented space there is going to be a ton of competition. Novo is still on the backfoot here, Cagrisema looks very promising but not as good as retatrutide
Is there anything they can do to put pressure on insurance companies to cover the medication for more people? A big reason I see people turning to compounding is they can't get coverage for weight loss unless they have type II or sleep apnea. I think most people would prefer to get the name brand medications but they have to seek alternate routes when their insurance denies them.
I would have assumed insurance would do this on their own, they'd presumably save a ton of money by outlaying the cash for 1-2 years of GLP1 now and avoiding more catastrophic obesity related health problems later.
My pessimistic view is insurance companies are playing the long bet that more people will die of complications from obesity than will require catastrophic care. The crux being insurance companies are motivated by profits, not health outcomes.
From a societal standpoint, would it be advantageous for a government to subsidize these drugs to have a healthier more productive populace?
I get that the cost is high and I think there is likely a middle ground for cost that could be found, but producing drugs is expensive and profits drive innovation so I see the case for Novo wanting to make their money. They made a game-changing medication that is going to save and improve a lot of lives. That is really valuable. How do you balance access and also them getting compensated for the value they have created?
The math doesn’t work. Health savings are swamped by selection effects and cost of the drug.
If novo would dramatically lower the nominal price things might pen better.
How about the PBM’s stopped taking advantage of americans? Easy to just blame Novo cause the entrenched corruption in the US is harder to attack than a foreign company. Especially now that Trump and his Project 2025 administration is all about total corruption, waste, fraud and abuse.
Can you describe to me, in detail, how the PBMs force Novo to price Ozempic higher? Last time I checked every single PBM tries to drive the price of the drug down as far as they can, but the manufacturer has monopoly pricing power.
Trump is probably the best hope for lower GLP1 prices. When Biden negotiated drugs in 2026 he got WORSE prices then the PBMs, and everyone thinks its a joke. By contrast Trump has released a lot of memos saying that he's going to pursue best in class OECD pricing, which would be much lower than the PBMs get today on GLP1s. The price he negotiates for GLP1s should be released soon.
You don't seem to know much about how the drug market works.
Great write-up, thank you!