Investing.com -- CVS Caremark announced a partnership with Novo Nordisk (NYSE: NVO ) to expand access to Wegovy, a GLP-1 drug for obesity, at a more affordable price. Starting July 1, 2025, Wegovy will become the preferred medication for CVS Caremark members. The move is part of a formulary action that includes additional lifestyle clinical support through the CVS Weight Management program.
BMO Capital analysts commented on the strategic implications for Novo Nordisk following the announcement. They noted that CVS Caremark proactively approached Novo Nordisk for the deal, reflecting the company’s philosophy that patients should have the freedom to select the appropriate medication in collaboration with their healthcare providers. Although the exact number of individuals affected by this change is undetermined, estimates suggest it could be around 35 million lives.
The analysts perceive Novo Nordisk’s decision as a tactical maneuver to regain market share, especially after facing competition from Zepbound. They emphasized the importance of pricing strategies and contracts for market retention and growth.
Addressing the relationship between Novo Nordisk and HIMS, the analysts highlighted that it is not exclusive. Novo Nordisk clarified their stance, explaining they are open to working with various telehealth providers and that HIMS is just one of the players. The company also pointed out that compounding of Wegovy should cease by May 22, 2025, as per legal requirements.
In response to CVS Caremark’s decision, Lilly’s CEO Dave Ricks expressed concern over the potential reduction in drug choice for consumers, particularly noting the impact on smaller employers who might not typically cover obesity drugs. He indicated that Lilly will closely monitor the market’s response to this development.
Lilly’s shares experienced a significant drop of over 10% today after the company reported first-quarter earnings that did not meet analyst expectations. Lilly also adjusted its full-year 2025 earnings forecast to a range of $20.78 to $22.28 per share, which is below the anticipated $22.40. Despite this, Lilly has kept its revenue projection steady at $58-61 billion.
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