Here's Why Novo Nordisk and Eli Lilly Could Still Be Absurdly Underrated Stocks to Buy Today
News Summary
Despite recent stock declines in 2025 (Novo Nordisk down 35%, Eli Lilly down 3%), this article posits that both GLP-1 drugmakers remain significantly underrated and are compelling buys today. A key catalyst is the Trump administration's reported consideration of Medicare and Medicaid coverage for GLP-1 weight loss drugs. Currently, these medications, such as Eli Lilly's Zepbound and Novo Nordisk's Wegovy, are expensive. Government coverage would dramatically boost market penetration and revenue for both companies. GLP-1 drugs are expanding beyond weight loss, with Zepbound approved for obstructive sleep apnea last year, and Wegovy approved to reduce serious heart problems in obese or overweight adults. There's also potential for treating substance abuse disorders. The global GLP-1 weight loss drug market is projected to triple from $14 billion to $49 billion by the end of the decade, positioning both companies to capitalize on these opportunities. The article highlights Novo Nordisk's current P/E ratio of 14 and Eli Lilly's 50, suggesting that Eli Lilly's valuation could decrease significantly in the coming years due to future growth and larger profit margins. Government crackdown on compounded versions of these drugs is also expected to benefit Novo Nordisk.
Background
GLP-1 (glucagon-like peptide-1) receptor agonists are a class of drugs that aid weight loss by curbing appetite and slowing gastric emptying. Key products on the market include Eli Lilly's Zepbound and Novo Nordisk's Wegovy, but their list prices, exceeding $1,000 per month, limit patient access. The indications for these drugs are expanding beyond weight loss. For instance, Zepbound has been approved for obstructive sleep apnea, and Wegovy for reducing cardiovascular risks in obese or overweight adults, with its active ingredient, semaglutide, potentially effective in treating substance abuse disorders. The global GLP-1 weight loss drug market is projected to grow from $14 billion in 2024 to $49 billion by 2030. In 2025, Novo Nordisk's stock has declined by approximately 35%, partly due to compounded versions of its drugs, while Eli Lilly's is down 3%. The U.S. government, specifically the Trump administration, is reportedly considering covering these costly but multi-beneficial drugs under Medicare and Medicaid.
In-Depth AI Insights
What are the non-obvious political and economic motivations behind the Trump administration's consideration of Medicare/Medicaid coverage for GLP-1 drugs? - Beyond the stated public health benefits, this move could be a shrewd political play to address long-term healthcare costs associated with obesity and lost productivity. - It could garner broad electoral support by demonstrating the administration's commitment to tangible health improvements for citizens and potentially lowering future healthcare expenditures by reducing long-term comorbidities. - It also provides a significant economic boost to domestic pharmaceutical giants, aligning with an