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Lower weight loss drug prices are more positive than negative, says Mizuho's Jared Holz
11/6/2025, 8:22:51 PM
Economic Summary
- A government deal aiming for broad access to GLP-1 weight-loss drugs may lower prices but expand volumes; for companies like LLY and NVO this could offset revenue declines through higher patient uptake.
- Novo Nordisk (NVO) signaled a likely negative impact on next year's revenue growth, highlighting short-term headwinds from negotiated pricing but removing ambiguity for investor models.
- The addressable obesity market is enormous—hundreds of millions globally; at median monthly prices of roughly $250–$300, roughly 30 million patients could imply a market approaching $100 billion, indicating substantial long-term upside if adoption scales.
Bullish
- Broader access and lower prices can drive much higher volumes, offsetting price cuts.
- Massive addressable market—hundreds of millions globally—supports large long-term revenue potential.
- Clearer pricing outcomes reduce investor modeling uncertainty and remove downside scenarios.
Bearish
- Government-negotiated lower prices could reduce near-term revenue growth for manufacturers.
- Price erosion may compress margins and prevent prior high-margin forecasts for LLY and NVO.
- Novo Nordisk already warned of a negative revenue-growth impact next year.
Bullish tickers
LLYNVO
Bearish tickers
LLYNVO
LLY
Bullish
Huge global obesity population and volume expansion from broader access can sustain long-term growth despite lower prices.
Bearish
Negotiated lower prices and broader access could compress near-term revenue and margins for Eli Lilly (LLY).
NVO
Bullish
Even with lower prices, large addressable market and increased volume could still support a ~$100B market opportunity.
Bearish
Novo Nordisk (NVO) warned of a negative impact on next year's revenue growth from lower negotiated prices.
People mentioned
Jared HoltzBrian