The Impact of Biden and Sanders’ Criticism on Novo Nordisk and Eli Lilly
Key Takeaways:
- Novo Nordisk and Eli Lilly shares experienced a decline after U.S. President Joe Biden and Senator Bernie Sanders criticized the companies for the high cost of their medicines.
- Biden and Sanders highlighted the exorbitant prices charged by big pharmaceutical firms for prescription drugs, specifically mentioning weight-loss treatments produced by Novo Nordisk and Eli Lilly.
- The politicians issued a warning, stating that they would take action if pharmaceutical companies like Novo Nordisk did not significantly reduce prescription drug prices.
Novo Nordisk and Eli Lilly, two prominent pharmaceutical companies, faced a setback as their shares took a hit following a scathing op-ed penned by U.S. President Joe Biden and Senator Bernie Sanders. The duo called out these companies for the steep prices of their medications, particularly focusing on weight-loss drugs such as Novo Nordisk’s Wegovy and Eli Lilly’s Mounjaro.
Biden and Sanders’ Criticism:
In their joint statement, Biden and Sanders criticized the pharmaceutical industry for imposing “outrageous prices” on prescription drugs, labeling the costs of weight-loss treatments as “unconscionably high.” They specifically called out Novo Nordisk’s Wegovy and Eli Lilly’s Mounjaro, highlighting the exorbitant prices attached to these medications.
The politicians issued a stern warning, indicating that if companies like Novo Nordisk did not take immediate steps to substantially lower prescription drug prices, they would intervene to ensure fair pricing practices. Biden and Sanders emphasized the need for pharmaceutical companies to prioritize affordability and accessibility when setting drug prices.
Response from Novo Nordisk and Eli Lilly:
Following the public criticism from Biden and Sanders, Novo Nordisk responded by expressing disappointment at the oversimplification and mischaracterization of the issue for political gain. The company defended its pricing strategy, stating that over 80% of Americans with insurance pay $25 or less per month for medications like Ozempic and Wegovy.
On the other hand, Eli Lilly did not immediately respond to the allegations made by Biden and Sanders. The company’s silence in the face of criticism raised questions about its pricing policies and commitment to ensuring affordable healthcare for all individuals.
Despite the backlash from political figures, Novo Nordisk’s American depositary receipts (ADRs) experienced a 1.7% decline, closing at $142.98, while Eli Lilly’s shares dropped by 0.8% to $906.71. However, both companies have seen significant gains in their stock prices since the beginning of the year, with Novo Nordisk ADRs rising by over 38% and Eli Lilly shares surging by more than 55%.
Conclusion:
The public criticism from President Biden and Senator Sanders has put pressure on pharmaceutical companies like Novo Nordisk and Eli Lilly to reevaluate their pricing strategies and ensure that essential medications are accessible to all individuals. The spotlight on exorbitant drug prices highlights the urgent need for reform within the pharmaceutical industry to address affordability concerns and prioritize public health over profit margins.
For more information, you can read the original article on Investopedia.
