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 yesterday 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 U.S. 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.

Full story

Speaking of the expected White House deal with the anti-obesity drug manufacturers, one analyst note from the investment bank UBS described their view of it as "mixed."

Between the lines: More coverage = more patients who will access the drug = more sales, and Medicare currently doesn't allow coverage of weight loss drugs at all. But the price discounts reported yesterday are pretty massive compared with today's U.S. prices.

What they're saying: The reported $149 per month price for Novo's Wegovy is even less than what's paid for it in non-U.S. countries, according to the UBS note.

• The price is $314 in Germany and $350 in Denmark, per UBS. The U.S. cash pay price is $499, and even higher on the commercial market.
• "A key question will be how do companies aim to isolate such a level of pricing to Medicare without significant bleed through to the commercial and cash pay market," the analysts write.

The bottom line: "Overall, we see anticipation from investors that Novo and Lilly will need to lower price to improve access given the stalling market penetration."

Democrats had a big night in Tuesday's elections, but in Congress all they could end up getting on health care is a vote on extending Affordable Care Act subsidies.

Why it matters: A guaranteed vote, but no actual agreement that can be signed into law, would be a tough pill for many Democrats to swallow.

• They'll be able to talk up their victories in the Virginia and New Jersey governors' races, which could bolster some Democrats against backing down, but the results may not be enough to change the ultimate outcome on Capitol Hill.

Driving the news: There were signs on Capitol Hill yesterday that the situation was coming to an inflection point, with more moderate members looking for a way out of the shutdown.

• Senate Democrats had a much longer than usual closed-door meeting that stretched on for over two hours.
• Many senators were tight-lipped to reporters leaving the meeting, often a sign that a breakthrough is close, with several declining to comment on whether an ACA vote would be enough to satisfy them.
• Senate Democratic Leader Chuck Schumer (N.Y.), asked about an ACA vote, said only that the caucus "discussed all of the options."
• House Minority Leader Hakeem Jeffries (D-N.Y.) softened on his previous demands for an "ironclad" deal on the subsidies, saying yesterday that "we will evaluate in good faith any bipartisan agreement that emerges from the Senate," Axios' Andrew Solender reported.

What they're saying: "I can only tell you that negotiations are going on and they're good, they're constructive," said Sen. Catherine Cortez Masto (D-Nev.).

• On the GOP side, one of the senators involved in talks, Mike Rounds (S.D.), said he thinks Democrats are "tired of this."
• Senate Majority Leader John Thune (S.D.) has "said from day one that he would provide them with a vote," Rounds said. "What he can't do is provide them with an outcome."
• A potential deal could also include action on certain full-year appropriations bills.

The other side: Some Democrats say just a vote on the ACA subsidies is not enough.

• "A future vote that fails doesn't help anybody in this country who's about to have their lives ruined by premium increases that are going to cause untold death and destruction," Sen. Chris Murphy (D-Conn.) told reporters yesterday morning before the lunch.

Share this

Colorado's Democratic Gov. Jared Polis proposed reducing Medicaid coverage for services including adult dental for fiscal year 2026-2027, as states prepare for big decreases in their federal funding for the program.

Why it matters: Colorado is among the first states to propose benefit cuts since Congress passed a tax and spending bill this summer that will take an estimated $1 trillion out of the program over a decade.

State of play: Polis' plan provides $298 million, or roughly 6%, more in discretionary spending for Medicaid, but it's far short of the $631 million, or 12%, increase needed to maintain current services.

• One area he wants to trim is adult dental care. He's proposing a $3,000 cap on coverage.

What he's saying: "These measures are necessary because rapid growth in Colorado's Medicaid program poses the most significant challenge to the state's long-term fiscal health," Polis wrote in a letter to lawmakers accompanying his budget plan.

• Polis' proposal is sure to clash with the priorities of state lawmakers in his own party, who have worked for years to increase the state's safety net.

Zoom out: North Carolina and Idaho have both this fall announced cuts to the rates Medicaid pays providers.

Share this ... Subscribe to Axios Denver

👀 Pfizer's COVID vaccine sales are falling after federal regulators narrowed their recommendations on who should get the shots. (AP)

🔎 Trump's HHS orders state Medicaid programs to help find undocumented immigrants. (KFF Health News)

💊 Marketing claims about the health benefits of microdosing GLP-1s aren't supported by evidence. (Stat)

🎶 The Country Music Association is donating $3 million to Belmont University to launch the new Center for Mental Health in Entertainment. (Axios Nashville)