BofA says today’s announcement that Novo Nordisk (NVO) plans to reduce list prices for the LPG-1 is an eye-catching headline, but the update is unlikely to have any material impact on the US market in the company’s view. BofA views today’s action as an attempt to reduce copay/coinsurance costs for patients in settings where that figure is calculated based on list price/WAC. More broadly, the firm believes it is fair for investors to question whether and when commercial reimbursement of GLP-1 could become more common, and BofA’s channel checks suggest this may depend on the convergence of the PBM price and the consumer cash price. Overall, the company sees limited impact on Eli Lilly’s business (LYLY) The GLP-1 franchise has no clear indication that Novo is moving more aggressively with lower net pricing in the commercial insurance channel, higher upfront cash contribution, and US government channels that will not be affected by today’s update. BofA maintains a Buy rating on Eli Lilly.
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