Eli Lilly shares fell 2.2% Tuesday after Novo Nordisk announced plans to cut U.S. list prices for its weight-loss and diabetes drugs Ozempic and Wegovy by up to 50%. The price reductions, effective January 1, 2027, will bring monthly costs down to $675 for both medications, representing significant cuts from current pricing.

Novo Nordisk's move intensifies competition in the lucrative GLP-1 drug market, where millions of patients currently take these medications despite high prices limiting broader adoption. The Danish pharmaceutical giant will also reduce prices for pill versions including Rybelsus. Jamey Millar, Novo Nordisk's executive vice president of U.S. operations, said the price cuts aim to improve access for patients with high-deductible health plans or those paying coinsurance based on list prices.

The pricing pressure could force Eli Lilly to adjust its own GLP-1 product pricing in the weight-loss and diabetes treatment market. Both companies have seen massive demand for their medications, but affordability concerns have kept many potential patients from accessing these drugs. The price war signals a shift in strategy as pharmaceutical companies face increasing scrutiny over drug costs and insurance coverage limitations.