Novo Nordisk just announced price cuts for Ozempic and Wegovy, whose list prices as recently as last year were around $1,000 a month. Patients buying directly from the manufacturer will be able to pay as little as $349 for a monthly dose of these medicines. The company has also dropped prices for new direct-pay customers to just $199 for the first two months.
Why slash prices on blockbuster drugs? One word: competition. Its biggest rival in the GLP-1 market, Eli Lilly, has been seizing market share. Novo is looking to win customers back. Cutting prices is the most obvious way to achieve that goal.
Proponents of price controls take note: Competition leads to lower prices without the harmful effects of government coercion.
Over the last few years, both parties have advanced aggressive reforms aimed at artificially capping the prices of brand-name drugs. The Democrats’ Inflation Reduction Act of 2022 gave the federal government enormous new powers effectively to name its price for a host of medicines purchased through Medicare Part D starting in 2026.
President Donald Trump has called for drug firms to sell their medicines to Americans at a “most favored nation” price, the lowest price offered in other developed countries.
Both assume that government must dictate drug prices if they’re to be affordable for average Americans. Novo’s move shows the market can do it faster.
The company is facing serious competition in the GLP-1 market. Indianapolis-based Lilly reported that it had 57.9% of the market in the most recent quarter, while Novo had 41.7%. Lilly’s Zepbound has overtaken Wegovy as the most commonly prescribed GLP-1 in the country.
It’s only reasonable that Novo would react to this situation by cutting its prices in hopes of taking some customers from Lilly. It’s also a classic example of how quickly market competition can drive down prices, while also incentivizing companies to keep developing better, more innovative products. In the end, patients win.
The same can’t be said for government price controls. These policies might bring down prices in the short term. But the harm they inflict far outweighs any temporary savings.
When the government imposes price controls on drugs, pharmaceutical companies’ revenues shrink. Investors are less interested in funding the development of products whose potential return is capped. Research budgets decline. The result is a marked reduction in the number of state-of-the-art medicines reaching the market.
ONE IN 8 ADULTS HAS USED OZEMPIC OR SIMILAR GLP-1 DRUGS
This scenario is already playing out. Research shows that drug companies are already scaling back post-approval trials for small-molecule oncology drugs. They’re reasonably concluding that investing in additional research may not pay off if their drugs could get ensnared by price controls.
A competitive drug market strongly encourages companies to best their rivals by developing the next generation of life-saving therapies. And as Novo and Lilly are proving, it can also save patients money.
Sally C. Pipes is president, CEO, and Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is The World’s Medicine Chest: How America Achieved Pharmaceutical Supremacy — and How to Keep It (Encounter 2025). Follow her on X @sallypipes.
