Shares of companies making weight-loss drugs, a fast-growing segment of the pharmaceutical market, saw a decline on Tuesday. The drop followed a statement from President Trump about drug prices, which negatively impacted stock prices but not to extremely low levels.
Novo Nordisk, a Danish company most closely associated with obesity treatments, saw its stock fall by nearly 4%. Roche Holdings, a European rival, and Viking Therapeutics, a U.S.-based company also working on weight-loss drugs, experienced stock drops of approximately 3% and 2%, respectively.
Trump Targets Drug Prices
One of the Trump administration’s current focuses is reducing drug prices. On Monday afternoon, President Trump signed an executive order requiring drug prices in the U.S. to align with lower prices in other countries. Companies must comply with this mandate within 30 days or risk facing government action.
While experts believe the order is somewhat vague, it signals the administration’s intent to start addressing drug price reductions. After signing the order, Trump criticized weight-loss drugs, using an example of an unnamed man who paid $88 for his medication in London, while the same drug cost $1,300 in New York.
Though Trump did not name the drug, it is likely he was referring to popular GLP-1 weight-loss treatments such as Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound. These drugs can cost over $1,000 for a month’s supply in the U.S.
Potential Impact on Obesity Drug Makers
Trump’s executive order does not directly target weight-loss drugs, but his comments suggest that companies behind these medications could face more scrutiny in the future. A White House official told Reuters that GLP-1 drugs might be specifically targeted for price reductions.
The official indicated that if companies do not lower prices voluntarily, the administration may explore other policy options to force price cuts.
Despite these concerns, the lack of concrete details about the potential measures likely prevented a panic sell-off in stocks of Novo Nordisk, Viking, Roche, and other companies involved in weight-loss treatments.
The Future of Obesity Drug Developers
While the president’s executive order is vague, any successful effort to lower drug prices could significantly affect obesity drug makers. These companies could face tougher challenges than larger pharmaceutical companies, such as Novo Nordisk or Eli Lilly, which have a broader product range beyond weight-loss drugs.
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