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A price war waged by big pharma usually works in the favor of consumers, in the short term at least, or until the victor captures the market and establishes a monopoly. Eli Lilly and Company unveiled its opening gambit earlier this week by pricing its GLP-1 weight loss drug at a substantial discount to a competing offering by Novo Nordisk. The Danish pharmaceutical giant has now responded by hyping up the results of a critical trial.

Hunger and Obesity go hand in hand

Glucagon-Like Peptide-1, or GLP-1 for short, plays an important role in regulating hunger. This hormone forms the bedrock of Novo Nordisk's Ozempic and Wegovy drugs, with the former geared toward type-2 diabetes and the latter marketed as a treatment for teen obesity.

In recent years, Eli Lilly and Company has unveiled various offerings that supplement GLP-1's ability to reduce the craving for food with a cocktail of other hormones. For instance, its Mounjaro (Tirzepatide) injections leverage GLP-1 as well as Glucose-dependent Insulinotropic Polypeptide (GIP) – to control type-2 diabetes by regulating blood sugar levels.

Retatutide, another offering by Eli Lilly and Company, is currently undergoing clinical trialsand supposedly offers superior results by targeting three different hunger-regulating hormones: GLP-1, GIP, and Glucagon.

On Wednesday, Eli Lilly and Company announced that the US FDA has now approved its Tirzepatide drug under the Zepbound label for "chronic weight management." Critically, the pharma giant priced the drug's monthly course of six doses at $1,060, constituting a substantial discount to Novo Nordisk's Wegovy, which sets its users back by over $1,300 per month.

Do note that insurers are currently reluctant to cover GLP-1 drugs for weight management, owing to their sky-high prices. In a bid to attract these crucial market intermediaries, both Novo Nordisk and Eli Lilly and Company have now begun to unveil their unique gambits.

Eli Lilly and Company's Price War

This brings us to the crux of the matter. While Eli Lilly and Company seems to be banking on the discount that its Zepbound drug offers relative to the pricier Wegovy in order to lure insurers, Novo Nordisk is now touting the results of a critical phase-3 trial to hammer home the supposed superiority of its offering.

To wit, Novo Nordisk now claims that its Wegovy drugs reduce the risk of "major adverse cardiovascular events (MACE)" by "statistically significant 20%." The pharma giant correctly notes that around 18 million people die every year from cardiovascular diseases, with obesity a major contributing factor to this malaise. However, the company then notes that Wegovy's benefits extend beyond those accrued from weight loss alone:

"The results also demonstrated that the beneficial effects in MACE risk reduction were evident soon after treatment initiation, suggesting an effect that is more rapid than what would be expected if the cardiovascular effects were entirely mediated with the effects of semaglutide 2.4 mg on body weight reduction. This suggests that weight loss alone may not fully explain the benefits of semaglutide 2.4 mg in reducing the risk of MACE."

Novo Nordisk appears to be banking on this conclusion to lure insurers to its side. We wait with bated breath now to observe Eli Lilly and Company's reaction to today's broadside by the Danish giant.