CVS Strikes Major Deal with Novo Nordisk, Reshaping Obesity Drug Market

In a significant development that has sent ripples through the pharmaceutical industry, CVS Health's pharmacy benefit manager Caremark has reached an agreement with Danish drugmaker Novo Nordisk to give preferred access to its weight loss drug Wegovy on Caremark's standard formulary. This deal, set to take effect on July 1, 2025, is poised to expand access to Wegovy for tens of millions of Americans while potentially limiting access to competing therapies such as Eli Lilly's Zepbound.

CVS-Novo Nordisk Partnership: A Game-Changer for Obesity Treatment

The partnership between CVS and Novo Nordisk marks a major shift in the lucrative market for obesity drugs. Under the new agreement, Wegovy will become the preferred GLP-1 for obesity treatment on CVS Caremark's largest commercial template formularies. This move will likely result in Wegovy costing less for Caremark clients to cover on their prescription drug plans, while Zepbound and other competing therapies may become more expensive.

CVS Pharmacy, the largest retail drugstore chain in the nation, will also benefit from this deal. Novo Nordisk has selected CVS to sell Wegovy for $499, less than half its list price, to cash-paying customers at its more than 9,000 locations across the United States. This pricing strategy aligns with Novo Nordisk's recent efforts to improve access to Wegovy, which has faced challenges due to supply constraints, high costs, and insurer reluctance to cover GLP-1 drugs.

Impact on Eli Lilly and Market Competition

The CVS-Novo Nordisk deal represents a significant blow to Eli Lilly, Novo Nordisk's primary competitor in the obesity drug market. Lilly's Zepbound will be excluded from health plans using CVS's standard list of covered drugs, although patients currently taking Zepbound will be able to transition to Wegovy or potentially receive exemptions for medical needs on a case-by-case basis.

In response to the news, Eli Lilly's stock fell more than 11%, while Novo Nordisk's stock rose about 2%. However, Eli Lilly's CEO Dave Ricks appeared to downplay the impact of the deal, stating that the company is focused on direct relationships with consumers rather than deals with middlemen. Ricks emphasized Lilly's commitment to growing choice and access in the private pay market segment.

Broader Implications for the Pharmaceutical Industry

This development highlights the intense competition in the obesity drug market and the growing importance of formulary access deals in shaping market dynamics. It also underscores the ongoing challenges of drug pricing and access in the United States, particularly for newer, high-cost medications like GLP-1 agonists.

The deal comes as part of a larger program launched by Novo Nordisk earlier this week, which includes partnerships with telehealth companies like Hims & Hers, LifeMD, and Ro to sell Wegovy at lower prices. These initiatives reflect the pharmaceutical industry's efforts to address affordability concerns and expand access to innovative treatments.

As the landscape of obesity treatment continues to evolve, this landmark agreement between CVS and Novo Nordisk may set a precedent for future partnerships between drug manufacturers, pharmacy benefit managers, and healthcare providers. The long-term implications of this deal on patient access, drug pricing, and market competition will likely be closely watched by industry observers and policymakers alike.