Weight loss drugs are starting to roll back prices, Eli Lilly is selling the weight loss miracle drug Zepbound in small bottles at half price

To address the shortage of weight loss drugs, Eli Lilly has started selling its blockbuster weight loss drug Zepbound in bottled form to patients for $399 per month.

Normally, Zepbound is used with an auto-injector pen, but the bottled form allows for faster production, saving Eli Lilly production time and enabling more patients to access the medication.

In a statement, Eli Lilly announced that starting from Tuesday, patients with Zepbound prescriptions can purchase monthly single-dose small bottles directly from the company's direct-to-consumer website. While using the bottled medication requires patients to extract and inject it themselves with a syringe, it is priced at half the cost of the pen form, with the higher dosage bottled medication priced at $549 per month.

Patrik Jonsson, Executive Vice President of Eli Lilly, stated that the company is working tirelessly to increase the supply of Zepbound and another similar diabetes drug, Mounjaro, as these drugs are currently in very short supply. By offering bottled medications, Eli Lilly is also providing a more affordable weight loss drug option for uninsured patients, as the pen form of these medications could cost over $1,000 per month.

Eli Lilly's "Low-Cost Bottled Drugs" Putting Pressure on Competitors

Both Eli Lilly and competitor Novo Nordisk are facing challenges in meeting the huge demand for weight loss drugs, with analysts predicting the weight loss drug market to reach $130 billion by the end of the century. Since the launch of Wegovy and Zepbound, they have often been in short supply, and the Food and Drug Administration (FDA) still considers these drugs to be in shortage.

Morgan Stanley analysts believe that while the lower price of bottled drugs may temporarily lower the average price of Zepbound, the increased supply from bottled drugs could ultimately have a positive impact on Eli Lilly's sales.

Therefore, Eli Lilly's introduction of low-cost bottled drugs may put pressure on competitors. On one hand, for Eli Lilly, the complexity of producing auto-injector pens has limited its supply. However, Eli Lilly's competitor Novo Nordisk is currently unable to lower prices like Eli Lilly, as it is facing difficulties in producing the main ingredient (semaglutide) of the drug.

On the overnight Tuesday, Eli Lilly's stock performance remained stable, while Novo Nordisk's stock declined. Eli Lilly's ADR rose more than 2.3% intraday before halving the gains, closing up 63% year-to-date as of Monday's close. Meanwhile, Novo Nordisk's ADR fell more than 1.1% intraday before erasing most of the losses.

On the other hand, due to drug shortages, the FDA allows compounding pharmacies to produce generic drugs. While these generic drugs have the same active ingredients as Zepbound or Wegovy, their regulation is not as strict as brand-name drugs, and in some cases, these drugs may pose health risks, even leading to patient hospitalization Generic drugs are usually much cheaper than brand-name drugs, driving a market estimated at $1 billion, directly competing with Eli Lilly and Novo Nordisk. Eli Lilly hopes to enable more patients to use their drugs by introducing bottled medications, rather than opting for higher-risk generic drugs. Hims & Hers Health Inc., a telemedicine company that sells generic weight loss drugs, fell more than 7.6% intraday.

Eli Lilly launches LillyDirect platform to ensure patients get authentic Zepbound medication

Earlier this year, due to a shortage of the weight loss drug Zepbound, many patients struggled to obtain prescription drugs, prompting them to call on Eli Lilly to introduce a more easily producible bottled version as in other countries. Dave Knapp, a social media activist, who was interviewed in April, said that Eli Lilly had the ability to alleviate this issue by introducing bottled medications, even creating the hashtag #ReleaseTheVials to pressure Eli Lilly.

During the earnings call in early August, Eli Lilly announced the launch of single-dose bottled Zepbound medication. This news left Knapp feeling "very surprised," as he was both surprised and satisfied with Eli Lilly's commitment.

Patrik Jonsson, Vice President and President of Heart Metabolism Health and U.S. Business at Eli Lilly, stated, "We listen to feedback." Therefore, the company decided to launch this bottled medication to meet the needs of patients.

These bottled medications can only be purchased through Eli Lilly's direct sales platform, LillyDirect, currently only open to self-paying patients. Jonsson, Vice President of Eli Lilly, stated that compared to purchasing generic drugs through compounding pharmacies, purchasing medication through LillyDirect allows patients to be confident that they are receiving authentic medication with accurate dosages. Eli Lilly also provides injection guidance to help patients use the medication safely.

The introduction of bottled medications not only alleviates supply shortages but also helps millions of patients without insurance coverage to obtain medication. These patients cannot purchase Zepbound through insurance or enjoy discounts on drugs. While Eli Lilly offers discounts to patients without commercial insurance coverage, they do not offer rebates to those with medical insurance.

LillyDirect is an online direct sales platform launched by Eli Lilly last year, currently serving thousands of patients weekly. Frank Cunningham, Vice President of Global Value and Access at Eli Lilly, revealed that other pharmaceutical companies such as Pfizer have also begun to introduce similar services to directly serve patients