Tirzepatide Pricing Comes in Similar to Semaglutide

Competition can be a great thing. In the past few weeks we’ve been hearing a lot about tirzepatide. The FDA just approved it for treating type 2 diabetes, hailing it as an important advance. Tirzepatide for obesity is a couple of years away, but the initial results of pivotal studies have been extremely impressive. So the emergence of tirzepatide for diabetes and (fingers crossed) for obesity will bring significant competition, including price competition. With all this as context, Friday’s news from Lilly about pricing tizepatide for diabetes (Mounjaro™) is important. Tirzepatide will enter the market with pricing similar to semaglutide in the form of Ozempic.

Because Wegovy is much more expensive than Ozempic, this means that tirzeptide will begin to put price pressure on Wegovy.

A Competitive Diabetes Market

Though tirzepatide is an important advance, this news signals that Lilly is not trying to extract a big premium for it. Not that it’s cheap. But it won’t come in with a much higher price than other advanced therapies for diabetes. The list price will be $974 per month, regardless of the dose. That’s nine percent higher than the $892 list price for a month of Ozempic.

When a new, advanced therapy comes into the market without a big price premium in the U.S., that’s a signal that the market is at least somewhat competitive.

This Means It’s Less Expensive Than Wegovy

The real reason that this is good news is the implications for pricing in obesity care. Right now, the most advanced drug therapy for obesity is semaglutide in the form of Wegovy from Novo Nordisk. The pricing of Wegovy is a problem, though.

The company has chosen to put a 51 percent higher price ($1,349 per month) on obesity treatment with semaglutide compared to the price for semaglutide in diabetes treatment. They rationalize it by pointing to the higher dose used for obesity and the innovation that this indication represents. Maybe that works for now. Semaglutide is the most advanced therapy available.

But the pricing announcement from Lilly means things are changing. Because the dosing in studies of tirzepatide for obesity is the same as it is for type 2 diabetes. That means no stupid games with differential pricing that penalizes people with obesity. It simply won’t work in the marketplace.

Wegovy’s list price is 39 percent more expensive than tirzepatide. That will start looking obviously excessive very quickly.

Innovation for the 0.1 Percent

Let’s face it. Drug pricing in the U.S. is screwed up. We could write volumes about this and others have. But the bottom line here is that drug pricing is not very competitive, and the pricing scheme for semaglutide in obesity illustrates that point. It’s not an easy problem to solve.

So we’re glad to see more competition coming for obesity medicines. We hope it will lead Novo Nordisk to once again show some leadership in obesity care and make better decisions about pricing and affordability.

Innovation is worthless if it’s only available to the most fortunate 0.1 percent of people who live with this complex chronic disease.

Click here and here for more on the tirzepatide pricing news. For further perspective on the problems with U.S. drug pricing, click here. For more on our questions about the pricing of Wegovy, click here.

Golden Water, painting by Dante Gabriel Rossetti / WikiArt

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May 21, 2022