The Ozempic Winter Games
When Medicine Is Allowed to Compete, Good Things Happen
About a decade ago, I was invited to a medical-legal conference at a top-tier Boston law firm. Panelists spoke to inexorable price growth, regulatory complexity, and the legal opportunities. I raised my hand and said,
“Prices in many areas of healthcare have fallen dramatically over the prior decade, while quality and service has improved.”
The room went quiet. Faces registered polite disbelief, as if I had just denied gravity. I let the pause sit for a beat and then added the missing clause.
“I ‘forgot’ to mention. I’m talking about veterinary orthopedics, laser cosmetic procedures, LASIK eye surgery, and dental implants.”
There was a collective release of tension: contradiction dissolved.
Those sectors are cash-based. Consumers know the price in advance. They are spending their own money. Providers compete locally. There is no dominant national brand, no single behemoth’s dictating terms, no Byzantine coding apparatus’ mediating every transaction. If someone builds a better mousetrap, patients notice. If someone overcharges, patients leave.
For large health systems, scale and regulatory capture often insulate incumbents from meaningful competition. But for consumers, when genuine competition is allowed to operate, the results are remarkably consistent.
This distinction matters when we look at pharmaceuticals, and particularly at something as anomalous as the apparent softening of GLP-1 drug prices despite patent protection and massive demand. If even a partial version of competitive pressure is being reintroduced into a domain long governed by administered pricing, political signaling, and global cost-shifting, it may explain why familiar economic rules suddenly appear to reassert themselves.
GLP-1 medications, still under patent protection and enjoying extraordinary demand, are dropping in price, counter to expectations with (still-)patented drug until exclusivity ends, governments intervene, or demand collapses. None of those conditions obviously apply here.
“In the world of Big Pharma, this is unheard of. 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. As Leerink analyst David Risinger notes, there isn’t a comparable precedent for this level of price erosion in the industry’s history.”
So what might be going on?
One explanation is internal competition. GLP-1s are not a single product but a growing class of branded drugs. While there are no generics, insurers can still leverage formulary placement, rebates, and substitution within the class. This is not a free market in any clean sense, but it is a form of constrained competition that can exert downward pressure on net prices even when list prices remain high.
Another explanation is basic economics. These drugs straddle a fault line between medicine and lifestyle. When priced exclusively as specialty therapies, uptake is limited. When prices fall, even modestly, demand may explode. Lower margins per prescription paired with vastly higher volume can yield higher total revenue. Pharmaceutical companies may simply be discovering where the real revenue-maximizing point on the price curve lies for mass-market weight loss. Yet purely economic explanations feel incomplete.
The United States occupies a peculiar role in global pharmaceutical markets. We do not have anything approaching a true free market, but relative to other wealthy Western nations, our system remains less centralized and less monopsonistic. That difference matters. France, Germany, and other advanced economies impose aggressive price controls through single-payer systems. They still host pharmaceutical companies, but those firms increasingly groom their innovations for the U.S. market, where discovery costs can be recouped and first-mover profits realized.
In that sense, Americans subsidize global drug innovation (much as they subsidize Western defense spending). The NATO analogy is imperfect but useful. The United States shoulders disproportionate costs; others can free-ride. If GLP-1 prices are softening even here, in the one market designed to bear those costs, something unusual is happening.
Political context may also matter. GLP-1s enjoy broad institutional acceptance, including for off-label weight loss use. This stands in stark contrast to the treatment of older, safer, off-patent drugs ivermectin and hydroxychloroquine during COVID. Those medications had long records, minimal cost, and one Nobel-recognized origin, yet were actively discouraged or stigmatized. The asymmetry raises uncomfortable questions about whether permissibility is driven by safety and evidence alone, or by institutional incentives and power structures.
Reputational and legal pressures may be exerting their own influence. Pharmaceutical firms remain under scrutiny following the pandemic era, with litigation and political backlash still possible. In such an environment, pricing restraint can function as reputational insurance. Playing the role of cooperative actor may be cheaper than provoking fresh political hostility. Programs like TrumpRx, regardless of their ultimate legal or economic reach, contribute to that signaling environment.
GLP-1 pricing may prove to be a narrow case study, or it may offer a glimpse into how economics, politics, and institutional pressure interact beneath the surface of pharmaceutical markets.
Separately, if the United States were to move fully to a single-payer model, as some advocate, the incentive structure for drug innovation would likely collapse. The global pipeline for new-generation pharmaceuticals depends on at least OUR market’s absorbing the risks and costs of discovery. It is not fair or just for that burden to fall indefinitely on a single country.