See The Weight-Loss Price Wars Are Breaking Big Pharma’s Business Model: Prices for GLP-1s are falling fast and forcing companies to adapt by David Wainer of The WSJ.
"Two years ago, a GLP-1 prescription could cost an uninsured patient more than $1,000 a month. Today, Novo Nordisk’s Wegovy pill starts at just $149 through cash-pay programs."
"Typically, drug prices climb or plateau until generics arrive years later. That trend should be even stickier in a duopoly. Yet the obesity market has turned traditional pharma economics upside down."
"there isn’t a comparable precedent for this level of price erosion in the industry’s history."
"In recent years, demand spread through TikTok, Instagram, and word-of-mouth"
"As insurers and employers moved slowly, patients bypassed the system entirely, turning to cash payments. This shift—combined with persistent brand-name shortages—opened the door for telehealth firms and compounded “copycats,” introducing cutthroat price competition years earlier than the industry expected."
"Drugmakers were ultimately forced to respond with lower prices. They needed cash prices low enough to fend off compounders and to reach uninsured patients at scale."
"The question both companies are now racing to answer is just how elastic consumer demand is in the obesity market. Lower prices are clearly unlocking growth in demand" [I would not say growth in demand but an increase in quantity demanded-the demand line is not moving]
"this isn’t a price war, so much as a search for the price points that open the floodgates of access."
Firms in the oligopoly and monopolistic competition market structure are price searchers, meaning the demand for their product slopes downward. But the article implies that the demand lines are pretty flat or very elastic (but, of course, slope and elasticity are not the same thing).
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