Novo launches $249 Wegovy subscription, undercutting Lilly as shares fall 30%

This article first appeared on GuruFocus.

Novo Nordisk (NYSE:NVO) is stepping up its push to regain share in the obesity drug market, introducing a subscription-based pricing model that could improve access and pricing visibility for cash-paying patients. Starting Tuesday, patients can enroll in three-, six-, or 12-month plans through telehealth partners including Ro, Weight Watchers, and LifeMD, with the 12-month option pricing the Wegovy pen at $249 per monthabout $50 below Eli Lilly's (NYSE:LLY) lowest offering. Company representatives indicated the structure is designed to improve predictability for patients, particularly in a market where insurance coverage remains limited and a significant portion of users continue to pay out of pocket.

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The move comes as competitive pressure has been building. Novo's shares have declined as much as 1.4% in Copenhagen and are down roughly 30% this year, reflecting investor concerns about its positioning against Eli Lilly, which moved earlier to capture demand through direct-to-consumer pricing and telehealth partnerships. Analysts have suggested that Novo's delayed response may have cost it share, prompting a shift in strategy under CEO Mike Doustdar, who has focused on improving the company's consumer-facing platform and expanding distribution partnerships, including a recent agreement with Hims & Hers Health to broaden access to obesity treatments.

The subscription rollout builds on momentum from Wegovy's pill version, launched in January, which has been selling at three times the rate seen during the launch of Lilly's Zepbound, according to analyst commentary, with most patients paying cash. Novo indicated that patients opting for longer-term subscriptions could save up to $600 annually, while a newly approved higher-dose Wegovy shot is expected to be added to the program at a later stage. Eli Lilly executives have signaled interest in exploring similar pricing structures, suggesting subscription-based access models could become an increasingly important competitive lever across the obesity drug market.

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