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Novo and Lilly shares rise on expected White House deal

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Deal aims to lower obesity drug prices for Medicare and

Medicaid

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Analysts see potential growth for Lilly with $150 monthly

cap

By Mrinalika Roy, Patrick Wingrove and Jarrett Renshaw

Nov 6 (Reuters) -

The White House is expected to announce a deal for lower

prices of obesity drugs from Novo Nordisk and Eli

Lilly ( LLY ) on Thursday during an event, according to sources

familiar with the situation, pushing shares of the two companies

higher as investors bet on increased patient access in

government health programs.

Denmark's Novo rose around 2%, while Eli Lilly ( LLY ) was trading about

1% higher before the U.S. market open.

Novo's Wegovy and Eli Lilly's ( LLY ) Zepbound are the only highly

effective GLP-1 based weight-loss drugs sold mainly in the U.S.

as weekly injections. List prices top $1,000 a month, though

both offer cash buyers a $499 monthly supply.

President Donald Trump has said he wants prices to fall to

below $150. On Tuesday, media reports said that the Trump

administration had

struck

deals at that price for the smallest, starter doses.

The move is aimed at increasing access to the treatments through

U.S. Medicare for people aged 65 and over or with disabilities

and the Medicaid program for low-income people which together

provide healthcare coverage for nearly half of all Americans.

Currently, Medicare does not easily cover the drugs for

obesity. Coverage in Medicaid, which is run by each state and

jointly financed with the federal government, varies.

A $150 PILL WOULD BE A GAME CHANGER, ANALYST SAYS

Deutsche Bank analysts see the deal as a potential catalyst

for Lilly's growth, estimating a $150 monthly cap could unlock

access for up to 15 million Americans if it applies to

orforglipron, its experimental weight loss pill that succeeded

in its late-stage trial. Lilly has said it is talking to the

U.S. FDA about submitting that drug for approval.

Deutsche Bank said the increased uptake would come from the

20% of obese adults who do not like the needles that come with

the current injections. About 2.7 million Americans currently

take Lilly's Zepbound, it said.

Both Lilly and Novo are racing to bring oral versions of

their blockbuster GLP-1 treatments to market. Novo's once-daily

oral Wegovy is under U.S. FDA review with a decision expected in

late 2025, while Lilly's orforglipron is set for regulatory

submission by the end of 2025 and a potential launch in 2026.

BMO Capital analyst Evan Seigerman said Lilly's dominance in

the GLP-1 space continues to deepen, with physicians and

patients increasingly favoring its drugs.

"A potential deal with the Trump administration's

direct-to-consumer platform, TrumpRx, could further accelerate

Lilly's momentum," he said, as expanded government coverage more

than offsets any decline in net pricing.

The Trump administration has said that TrumpRx.gov will launch

in 2026 as a way to facilitate direct-to-consumer sales of drugs

at what it has described as most favored nation pricing.

The U.S. pays more than any other country for drugs, often

three times as much, and Trump has urged drugmakers to cut

prices here and charge more in other wealthy nations such as

those in Europe.

Several drugmakers, including Pfizer ( PFE ) and AstraZeneca ( AZN )

, have signed on through new agreements tied to the

TrumpRx platform.

(Reporting by Mrinalika Roy in Bengaluru, Bhanvi Satija and

Maggie Fick in London; Editing by Arun Koyyur, Caroline Humer

and Chizu Nomiyama )