Novo Nordisk Slashes Wegovy Prices in China, Highlighting Escalating Global Pricing Pressure

What happened

On December 29, 2025, local media reported that Novo Nordisk has nearly halved prices of its obesity drug Wegovy in some Chinese provinces, a strategic move to boost market access in a key growth region. This comes amid ongoing global pricing headwinds detailed in the DeepValue report, where Novo faces persistent pressure from payers and competition from Eli Lilly's GLP-1 offerings. The price reduction aligns with management's guidance of milder 2025 growth after a 2024 surge, underscoring efforts to maintain volume growth despite anticipated margin compression. It reflects aggressive tactics to defend market share in China, where rising obesity prevalence offers secular tailwinds but intensifying competition could erode pricing power. This development directly touches on a core watch item from the report—net pricing erosion—and suggests that pricing challenges are extending beyond the U.S. into emerging markets.

Implication

This move likely reduces average selling prices for Wegovy in China, directly impacting revenue per unit and potentially squeezing margins if volume gains fail to fully offset the decline. It may foreshadow similar concessions in other regions, exacerbating the guided slowdown in 2025 growth and validating the report's warnings about steeper-than-expected price erosion. Investors should scrutinize whether this strategy secures long-term market share or merely triggers a race to the bottom, especially as Lilly's competitive threats loom. The news amplifies the risk of structural GLP-1 commoditization, which could impair returns on Novo's massive capacity investments and justify a more cautious stance. However, if managed effectively, it might bolster volume growth and support the long-term secular demand story, though the immediate financial impact is negative and warrants close monitoring of quarterly pricing metrics.

Thesis delta

The price cut in China reinforces the existing risk of pricing pressure identified in the DeepValue report, making margin compression more tangible and widespread, which could prompt a reassessment of the STRONG BUY rating if similar actions spread or volume growth disappoints. It does not invalidate the core thesis of Novo's GLP-1 leadership and solid financials, but it heightens sensitivity to pricing dynamics, suggesting that investors may need to tolerate increased volatility and potentially lower near-term returns. This development underscores the importance of monitoring net pricing trends globally, as sustained erosion could shift the investment case toward a hold until clearer signs of margin stabilization emerge.