Eli Lilly and Novo Nordisk recently reached agreements with the U.S. government to significantly reduce prices for GLP-1 weight-loss drugs. Goldman Sachs views this as a strategic "volume-for-value" move, where the substantial growth potential from Medicare’s first-time coverage will likely offset pricing pressures, despite steeper-than-expected cuts.

Under the deal announced last Thursday, Medicare and Medicaid patients will gain access to Eli Lilly’s Zepbound and Novo Nordisk’s Wegovy at a list price of $245 per month starting in 2026, with out-of-pocket costs capped at $50 for Medicare beneficiaries.

Goldman Sachs emphasized in a November 10 report that this is not merely a price reduction but a calculated strategy to unlock tens of millions of previously uncertain patients under Medicare and Medicaid. While near-term revenue may face pressure, the bank maintains its 2030 total addressable market (TAM) forecast of ~$95 billion for obesity treatments, expecting volume surges to counterbalance pricing declines.

**Key Pricing Adjustments**: - **Medicare/Medicaid**: First-time coverage for obesity drugs at $245/month, with patient copays ≤$50, applicable to Ozempic, Wegovy, Mounjaro, and Zepbound. - **TrumpRx.com**: Initial pricing at $350/month for Ozempic/Wegovy and $346/month for Zepbound and Lilly’s oral orforglipron, expected to taper to $245. - **Oral therapies**: Starter doses priced at $149/month (orforglipron and Novo’s oral Wegovy, if approved), escalating to $399 for higher doses.

Goldman noted these prices, though below its prior estimates, are well above the feared $150–200 "floor" under IRA negotiations, providing pricing clarity and a new baseline.

**Market Expansion**: The deal opens access to ~30 million Medicare-covered obesity patients (per Novo) and up to 40 million including Medicaid (per Lilly). Goldman sees this driving volume growth that outweighs price cuts, while also improving patient adherence and price stability.

**Winners and Losers**: - **Eli Lilly (LLY)**: Holds a dominant 60% share in reimbursed channels (vs. Wegovy’s 40%) and 85% in cash-pay markets. Its oral orforglipron, now likely launching in Q1 2026 (vs. prior Q2/Q3 expectations), could add ≥$1 billion in 2026 revenue. Oral pricing ($149 starter, ~$346 maintenance) remains competitive. - **Novo Nordisk (NVO)**: Faces compounded headwinds, including a "low-single-digit" 2026 revenue hit from pricing, 2pp drag from 2025 gross-to-net adjustments, international generics pressure, and potential Medicaid coverage losses. Goldman projects 4.4% 2026 revenue growth (constant currency), excluding pricing impacts, with additional risks from 2027 IRA negotiations that may impose a ~43% discount (to $200) on semaglutide vs. tirzepatide’s fixed $245 price.

The agreement solidifies the duopoly but tilts advantages toward Lilly, leaving Novo navigating tougher growth constraints.