The GLP1 price wars are rewriting the pharma business model?

I decided to do some digging (ClaudeAi) and found that the WSJ is in fact, sort of FOS. I don't think they are rewriting the pharma business model.

When you look at the 10 most prescribed drugs in the US, they're relative inexpensive. Why? Because they're selling massive amounts of the stuff. The reason GLP1 drugs are falling in price is because the volume of the unit sold is taking off. The marginal cost to produce a 1 month supply of an injectable GLP1 is about $10. The pill form even less. Eli Lilly is in am especially good position to sell this stuff like aspirin to a very wide audience and make money hand over first. Lower the cost and make it up in volume.

The Weight-Loss Price Wars Are Breaking Big Pharma’s Business Model

Prices for GLP-1s are falling fast and forcing companies to adapt

By David Wainer, WSJ

Feb. 7, 2026 5:30 am ET

Two years ago, a GLP-1 prescription could cost an uninsured patient more than $1,000 a month. Today, Novo Nordisk’s NOVO.B 5.29%increase; green up pointing triangle Wegovy pill starts at just $149 through cash-pay programs.

In the world of Big Pharma, this is unheard of.

Typically, drug prices climb or plateau until generics arrive years later. That trend should be even stickier in a duopoly. Yet the obesity market has turned traditional pharma economics upside down. As Leerink analyst David Risinger notes, there isn’t a comparable precedent for this level of price erosion in the industry’s history.

This past week investors have seen the cost of this price war. Novo Nordisk, maker of Wegovy and Ozempic, forecast a sharp sales decline for 2026, sending its stock down nearly 20% in the days that followed. The outlook for Eli Lilly LLY 3.66%increase; green up pointing triangle, which makes Zepbound and Mounjaro, remains brighter, but only because a strong surge in volume is expected to offset the drag of recent price cuts.

Then on Thursday, shares of both companies fell sharply after Hims & Hers Health HIMS -1.96%decrease; red down pointing triangle announced a $49-a-month compounded version of the Wegovy pill. They rebounded Friday after the Food and Drug Administration chief threatened action against the mass marketing of copycat drugs.

The wild week for GLP-1 makers was a stark reminder of how unusual this market has become, operating more like a high-growth consumer business than a traditional drug market. In recent years, demand spread through TikTok, Instagram, and word-of-mouth, often before patients ever saw a physician. Unlike treatments for conditions such as high blood pressure, the impact of GLP-1s isn’t measured only in lab results: it’s visible. That viral demand overwhelmed manufacturing capacity and outpaced employers’ willingness to cover the drugs.

As insurers and employers moved slowly, patients bypassed the system entirely, turning to cash payments. This shift—combined with persistent brand-name shortages—opened the door for telehealth firms and compounded “copycats,” introducing cutthroat price competition years earlier than the industry expected.

Drugmakers were ultimately forced to respond with lower prices. They needed cash prices low enough to fend off compounders and to reach uninsured patients at scale. They also later reached a deal with the Trump administration to lower prices in exchange for broader access, including Medicare coverage for millions of seniors.

The question both companies are now racing to answer is just how elastic consumer demand is in the obesity market. Lower prices are clearly unlocking growth in demand, especially in the cash-pay market. As Novo Nordisk Chief Financial Officer Karsten Munk Knudsen argued in an interview this week, this isn’t a price war, so much as a search for the price points that open the floodgates of access.

While Eli Lilly is thriving under the new logic, Novo Nordisk is struggling to keep pace. Both companies are projecting net price declines this year, but Lilly is aggressively capturing market share. Lilly says it recently surpassed a 60% share of the U.S. GLP-1 market, and it now expects 2026 revenue to climb about 25% to more than $80 billion. As for Novo Nordisk, the company is cutting prices, but volume hasn’t yet made up the difference. Sales are expected to fall between 5% and 13% in 2026. The company is hoping that—longer term—volume will bounce back enough to make up for the price pressures.

Lilly’s primary advantage is clinical: Zepbound is simply seen as more effective than Wegovy. But the Indianapolis-based company was also quicker to realize that a direct-to-consumer, cash-pay model was the future. More than 30% of Zepbound prescriptions now flow through LillyDirect. The company is already preparing to launch its own daily pill, Orforglipron, at a similar price point to Novo Nordisk’s $149 entry-level oral Wegovy.

Novo Nordisk was slower to embrace the cash-pay pivot, but it is making up for lost time. In just a few weeks since launching the Wegovy pill, it has already added 170,000 patients onto the treatment—most of whom are paying out-of-pocket through portals such as NovoCare or telehealth partners such as Ro.

This weekend’s Super Bowl will codify the shift. One of the most talked-about ads could be from Ro. Featuring Serena Williams, the spot aims to dismantle the “willpower” stigma around weight loss. As Ro Chief Executive Officer Zach Reitano puts it in an interview: “No one in the world has more willpower than Serena Williams.” By positioning GLP-1s as a tool for an elite athlete’s health—not a “cheat code” for the lazy—Ro is attempting to accelerate the consumerization of the category.

The weight-loss market is a special case shaped by conditions that don’t exist elsewhere in the drug industry, not least of which is the mass appeal of the product. But it also reveals what happens when consumers have more agency and more transparent prices. It is a lesson pharmaceutical companies are unlikely to forget.