Eli Lilly raising GLP-1 prices abroad raises more questions about US pricing: BofA analyst

Eli Lilly (LLY) raised prices of its GLP-1 weight-loss injectable in the UK this week, with plans to do the same in other European countries, in response to President Trump's push to normalize pricing in peer developed nations.

The effort, known as Most Favored Nations pricing, has been a goal of Trump's since his first term. He has doubled down on the efforts this year, giving pharma companies 60 days to implement changes in pricing in what he deems "freeloading" nations.

The US drug economy differs from European and other developed nations, which rely on the government to negotiate prices with drugmakers, resulting in lower prices globally.

"While we agree that the costs for breakthrough medicines should be more fairly shared across developed countries, we must also address the underlying structural issues in the US that have contributed to high drug prices. The US system is complex and opaque," Lilly said in a statement Thursday.

The stock was up 1% in trading Friday.

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Eli Lilly raised the price of its GLP-1, Zepbound, from about $125 to $165 and plans an additional hike next month that would almost double its price.

In a note to clients Friday, Bank of America Securities research analyst Tim Anderson questioned who would actually be impacted by the raised prices.

"LLY has announced it will raise GLP-1 pricing in the UK by a healthy margin (a doubling of price, but it's unclear to whom this higher price realistically applies). It expects to do something similar in other European countries (but worth appreciating: in most European markets, there aren't price agreements in place between GLP-1 manufacturers and governments, meaning these are out-of-pocket spending markets)," Anderson wrote.An injection pen of Zepbound, Eli Lilly’s weight loss drug, is displayed in New York City, U.S., December 11, 2023. REUTERS/Brendan McDermid·REUTERS / Reuters

Ultimately, whether or not the move results in lower US prices remains a question, though Anderson believes it likely will not.

"Does this mean it will actually cut the price on the GLP-1s in the US (and on other medicines)? To us, the answer is quite likely no, or at least, not in a way that creates P&L [profit and loss planning ] risk," he wrote.

Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, provider services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee as AnjKhem on social media platforms X, LinkedIn, and Bluesky @AnjKhem.

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