Novo and Pfizer make their America First case
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Novo Nordisk and Pfizer's multibillion-dollar fight over who gets to buy an anti-obesity biotech has morphed into a narrative argument over which acquisition would be most America First — a framing with clear political implications.
Why it matters: It's a sign of the new world order for the pharmaceutical industry, in which manufacturers hope dealmaking and political overtures made directly to President Trump translate into favorable treatment from the administration.
- That dynamic is also the backdrop for Novo's reported participation in talks with the White House that could lead to some Medicare coverage of weight-loss drugs.
Driving the news: Novo announced last week it was making a surprise bid for the obesity startup Metsera, which had already agreed in September to a deal with Pfizer valued at up to $7.3 billion. Novo last week offered up to $9 billion.
- Both pharmaceutical giants increased their bids Tuesday after days of escalating legal action, with Pfizer offering a maximum of $8.1 billion and Novo offering $10 billion.
- Pfizer's proposed acquisition has already received U.S. antitrust clearance from the Federal Trade Commission, and Pfizer has filed a lawsuit alleging that Novo's merger agreement would violate U.S. antitrust laws given the company already owns Wegovy and Ozempic.
- In a statement, Novo vice president Ambre James-Brown called the Pfizer lawsuit "false and without merit."
The intrigue: A source close to Pfizer told Axios the company has been calling allies on the Hill and within the administration to bolster its case against the proposed Novo acquisition, and wants the FTC to weigh in.
- Both companies and their allies are making their case not only in terms of the value of the deal, but its value to the American public.
- "Pfizer's suggestion that Novo Nordisk would impair or potentially stop an emerging US competitor is absurd and not based on facts, common sense, or market realities," James-Brown said in Novo's statement.
- In its own statement, Pfizer said it filed the lawsuit to preserve competition and "stop Novo Nordisk from illegally paying off Metsera and its controlling stockholders to gain control of, and impair and potentially kill, an emerging U.S. competitor."
Between the lines: Both Pfizer and Novo have been in active negotiations with the administration over the prices of their drugs.
- Pfizer was the first company to announce a most-favored nation pricing deal from the Oval Office, and Novo is set to announce its own deal on obesity drug prices and coverage as soon as this week.
- The Pfizer deal was framed as a win-win; the company agreed to some price concessions in exchange for tariff relief, a tradeoff to which analysts responded positively.
- The obesity drug pricing announcement also has a strong upside for drugmakers. Though they are expected to make some major pricing concessions, at least for some customers, they'll receive expanded Medicare and Medicaid coverage, per WSJ.
- If Novo and fellow obesity drugmaker Eli Lilly offer large price concessions, however, it raises questions about trickle-down effects into commercial markets and potentially the overall value of the obesity market.
The big picture: Pricing concessions aside, the emergence of GLP-1s as a successful treatment not just for weight loss but also a host of other chronic conditions has made the obesity sector extremely lucrative — and competitive.
- Though the first generation of GLP-1s result in substantial weight loss, they also come with significant side effects and are administered as injections.
- That means a new generation of obesity drugs, like ones that come in a pill version or with fewer side effects, could have an immense competitive edge.
