MW Why cutting drug prices is pushing Eli Lilly's stock toward an all-time high

By Jaimy Lee

Even by dramatically lowering the prices of some of its medications, the drug giant is still outpacing its rivals and nearing a trillion-dollar valuation

Novo Nordisk CEO Mike Doustdar (center) and Eli Lilly CEO David Ricks (right) listen to President Donald Trump as he delivers remarks on lowering drug prices at the White House on Nov. 6.

Eli Lilly & Co.'s stock is once again in record-breaking territory, fueled by ongoing excitement about its new deal with the Trump administration to sell obesity medications to people on Medicare.

The company's shares $(LLY)$ climbed 2.5% in afternoon trading on Tuesday, after closing at a record high of $966.64 on Monday. That rally pushed Lilly's market capitalization up to $937 billion, putting it on the cusp of being the ninth trillion-dollar company.

As part of the deal, Medicare beneficiaries with obesity will now have access to Lilly's Zepbound and Novo Nordisk's (NVO) Wegovy for the first time - and for a monthly copay of only $50.

The agreement, which was announced Thursday at the White House, appears to bypass a decades-old law that prevents Medicare coverage for medications used for weight gain or loss. It also gives the Indianapolis-based drug giant three years of tariff relief and a sped-up regulatory process for orforglipron, its promising obesity pill that could receive FDA approval early next year.

In a recent note upgrading Lilly's stock, Leerink Partners analyst David Risinger cited a range of reasons why the government deal, albeit featuring price cuts, will benefit the company, including the addition of about 40 million more patients in the U.S. He also believes that lower prices for GLP-1s will challenge the need for compounders, which sell cheaper versions of brand-name drugs.

"We expect Lilly to enhance its market-leading position," Risinger wrote.

In recent months, Lilly has disclosed several strategic actions that aim to safeguard and grow its lucrative obesity business, while widening its lead over chief rival Novo Nordisk.

The drugmaker has announced it's investing at least $12.7 billion to build three plants that will manufacture its medicines for the U.S. market. It's on track to close the year with the world's top-selling drug on its books after Zepbound and Mounjaro - both of which are produced with the same active ingredient - brought in a total of $10.1 billion in sales in the third quarter.

Once neck and neck in the obesity-drug market, Novo Nordisk has stumbled while Lilly has soared. The Danish drugmaker's longtime chief executive stepped down earlier this year, and Novo is now undergoing a vast restructuring of people, licensing deals and disease areas it wants to focus on. Under new CEO Maziar Mike Doustdar, the company made a surprise bid for obesity biotech company Metsera Inc. (MTSR) last month, tangling with Pfizer Inc. $(PFE)$ to do so. Pfizer ended up outbidding Novo last week.

Lilly's stock has run up 55.9% over the past three months, while Novo shares have slipped 1.3%.

On Tuesday, however, Novo Nordisk's stock also appeared to be benefiting from the long tail of excitement around the pricing deal in the U.S., in addition to a new pricing agreement in India. Its shares were up about 7% in afternoon trading after Reuters reported that Novo agreed to cut Wegovy's price by 33% in India.

-Jaimy Lee

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November 11, 2025 15:20 ET (20:20 GMT)

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