Key Points
- Pharma giants are navigating U.S. President Donald Trump’s demands to bring U.S. drug prices in line with other developed nations.
- Eli Lilly’s decision to hike Mounjaro prices in the U.K. could spark similar moves from other firms, analysts say.
- The U.S. consistently pays the most in the world for many prescription drugs.
Eli Lilly ‘s move to raise the U.K. list price of its blockbuster diabetes drug Mounjaro marks the start of prices hikes across Europe, analysts say, as pharmaceutical firms respond to U.S. President Donald Trump’s drug pricing demands. Lilly said Thursday that it had reached an agreement with the U.K. government to raise the list price of its weekly injection from Sept. 1, while maintaining access for patients covered by the publicly funded National Health Service (NHS). The U.S. pharma giant said it is now working with some other governments to adjust prices by the start of next month, without providing details of the specific countries involved. Analysts expect other firms to follow suit. “Lilly doing this isn’t shocking and I think that we’ll see more to come,” Kavita Patel, NBC News & MSNBC medical contributor and Stanford University professor, told CNBC’s “Fast Money” on Thursday. President Trump earlier this month delivered an ultimatum to pharma firms as part of his ongoing campaign to stamp out what he deems as unfair pricing practices in the U.S. In letters sent to 17 major pharmaceutical firms, the president outlined the steps they must take by Sept. 29 to lower the price of U.S. prescription drugs to “most favored nation” (MFN) levels. Lilly’s pricing decision takes the U.K. list price of its popular treatment from a range of £92 (about $124.57) to £122 a month, depending on the dose size, to between £133 and £330 — a 170% price jump. That compares to its U.S. list price of $1,079.77 a month, before insurance and other rebates. The U.S. consistently pays the most in the world for many prescription drugs, due in part to the country’s highly complex and fragmented reimbursement system, and a lack of the types of national pricing control prevalent in much of Europe. Several European pharma firms have spoken out in support of the White House’s pricing demands, with AstraZeneca CEO Pascal Soriot saying last month that Trump was “right” to push for price equalization. Novartis CEO Vas Narasimhan has cited “productive” conversations with the administration, while Roche Chief Executive Thomas Schinecker has suggested that U.S. prices could be cut in half if the government removed intermediaries, known as pharmacy benefit managers (PBMs). Stanford University’s Patel noted that firms like Eli Lilly may also be willing to accede to Trump’s pricing demands as they seek coverage for their weight loss drugs under forthcoming changes to the U.S. government’s Medicare and Medicaid health insurance systems for low-income people and retirees. “The United States is their big market and having that share in both Medicare and Medicaid is everything for drugs like Mounjaro. So this is important and I don’t think they’ll be the only one that we see,” she said. Indeed, rival diabetes and obesity drug giant Novo Nordisk is seeking to regain ground in the lucrative U.S. market after a series of missteps and supply shortages have seen it lose market share to both Lily and other cheaper compounded weight loss drugs. Novo Nordisk ‘s Chief Financial Officer Karsten Munk Knudsen said earlier this month that Trump’s drug pricing demands had “resonated” with the company and that it was already lowering the price of its Wegovy and Ozempic treatments stateside. The company said Monday that it would reduce the cost of Ozempic for cash-paying patients to $499 per month, less than half of its monthly U.S. list price. Nevertheless, Knudsen previously suggested that it could be difficult to simultaneously raise prices in other markets, given stretched public finances and strict pharmaceutical price caps across Europe. “If we look ex-U.S. markets, there’s rather limited history in terms of raising prices … I believe it will be challenging to significantly raise prices outside the U.S.,” he told CNBC’s “Squawk Box Europe.” Industry bodies, meanwhile, have warned of the damaging impact sudden prices hikes could have on patient care if implemented to meet Trump’s Sept. 29 deadline. Already, U.K. private pharmacies have reported a surge in orders for Lilly’s Mounjaro following Thursday’s announcement. “Short notice changes to pricing for medicines such as this also have a serious effect on access to an important public health service and pharmacy business themselves,” Henry Gregg, chief executive of the U.K.’s National Pharmacy Association, said in a statement. “We are urging the manufacturers to ensure that pharmacies are treated equitably and that proper support is in place,” he added.