---
title: "Why Ozempic is so expensive"
url: https://modern-mba.com/case/ozempic
sector: "Services"
sector_url: https://modern-mba.com/sector/services
aired: 2024-10-06
published: 2026-08-25
updated: 2026-08-28
reading_time_minutes: 16
charts: 15
video: https://www.youtube.com/watch?v=7sUoZVke_30
author: "Yishan Lin"
author_url: https://www.linkedin.com/in/yishanlin/
publisher: Modern MBA
license: "© Modern MBA, all rights reserved. Quote and cite with credit and a link; republishing needs written permission."
---

# Why Ozempic is so expensive

Eli Lilly and Novo Nordisk are two of the three companies that make 90% of the world's insulin, and they raised its price from $900 a year to over $5,000 in step with each other while diabetics rationed doses. Those are the companies now campaigning to have obesity reclassified as a disease — because if insurers and governments agree, they get to price a permanent injection for 890 million people. This case study follows the money through both sets of accounts: the patent cliff that motivated the insulin gouging, the drug class Lilly invented and lost, and why the GLP-1 trade is the insulin trade with the resistance removed.

## Key figures

- **$900 → $5,864** — Annual insulin cost at Eli Lilly, in step with Novo
- **890M** — Global obesity patient pool, against 486M for cancer
- **$817B + $589B** — Market cap of Eli Lilly and Novo Nordisk in 2024

## The argument

The industry's bargain is real and it mostly works. A drug costs roughly $2.3 billion and 10 to 15 years, and the only thing that funds that bet is the monopoly at the end. Then it expires and the price collapses — a Lipitor tablet cost $45 in 2010 and $5 by 2021. The bargain has one condition: the monopoly has to actually end.

Eli Lilly and Novo Nordisk spent a decade proving it does not have to. Both charged $900 for a year of insulin in 2007, $1,500 in 2011, $2,100 in 2013 — the same numbers, the same years, two supposed rivals holding two thirds of a three-firm market. Humalog's patent expired in 2013 and the monopoly ran another decade on secondary patents. The motive is in the accounts: Zyprexa collapsed, and insulin was raised almost line for line to fill the hole.

GLP-1 drugs are that trade with the last checks removed. Patients arrive demanding the drug by name, and Lilly has cut the doctor out entirely with its own telehealth portal. Ozempic went from $0.3 billion to $14.2 billion in five years. What is left is coverage, which is why both firms are pushing to have obesity reclassified as a disease — the same move Purdue made with pain. Get insurers to agree and 890 million people become a subscription, priced by the two companies whose record on captive patients is already written down.

## Charts

### Two drugmakers in the top ten

Market capitalization of the world's most valuable companies in 2024. Two drugmakers sit inside the top ten, on the promise of weight loss.

|  | US dollars |
| --- | --- |
| Apple | $3,358B |
| Microsoft | $3,015B |
| Nvidia | $2,611B |
| Amazon | $1,840B |
| Alphabet | $1,832B |
| Meta | $1,277B |
| TSMC | $844B |
| Eli Lilly | $817B |
| Tesla | $690B |
| Novo Nordisk | $589B |

Source: Modern MBA, “Why Ozempic is so expensive”, aired October 2024. Chart: https://modern-mba.com/case/ozempic#chart-1 · Sources: https://modern-mba.com/case/ozempic#sources

### The biggest patient pool on earth

Global patient population by condition, in millions. Obesity is nearly twice the size of cancer, which is why the industry wants it classified as a disease.

|  | Counts |
| --- | --- |
| Obesity | 890M |
| Cancer | 486M |
| Asthma | 262M |
| Heart disease | 200M |
| Dementia | 55M |
| HIV / AIDS | 45M |

Source: Modern MBA, “Why Ozempic is so expensive”, aired October 2024. Chart: https://modern-mba.com/case/ozempic#chart-2 · Sources: https://modern-mba.com/case/ozempic#sources

### Four years of repricing

Market capitalization of Eli Lilly and Novo Nordisk, in billions. The two were the same size in 2020; the gap since is the market pricing a promise.

|  | Eli Lilly | Novo Nordisk |
| --- | --- | --- |
| 2014 | $77B | $112B |
| 2016 | $81B | $94B |
| 2018 | $122B | $112B |
| 2020 | $162B | $163B |
| 2022 | $348B | $461B |
| 2024 | $817B | $589B |

Source: Modern MBA, “Why Ozempic is so expensive”, aired October 2024. Chart: https://modern-mba.com/case/ozempic#chart-3 · Sources: https://modern-mba.com/case/ozempic#sources

### Drugs are the biggest franchises in the world

Lifetime gross of the bestselling drugs against the leading media franchises, 1992–2017. Lipitor out-earned Star Wars and the Marvel universe.

|  | US dollars |
| --- | --- |
| Lipitor | $95B |
| Humira | $76B |
| Nexium | $72B |
| Advair | $69B |
| Mickey Mouse | $62B |
| Star Wars | $47B |
| Marvel | $33B |

Source: Modern MBA, “Why Ozempic is so expensive”, aired October 2024. Chart: https://modern-mba.com/case/ozempic#chart-4 · Sources: https://modern-mba.com/case/ozempic#sources

### The monopoly is supposed to end

Price of a single Lipitor tablet. The patent expired in 2011 and generics took the price from $45 to $5 — this is the payoff that justifies the monopoly years.

|  | US dollars |
| --- | --- |
| 2006 | $36 |
| 2008 | $40 |
| 2010 | $45 |
| 2011 | $41 |
| 2012 | $20 |
| 2013 | $12 |
| 2015 | $8 |
| 2017 | $8 |
| 2019 | $6 |
| 2021 | $5 |

Source: Modern MBA, “Why Ozempic is so expensive”, aired October 2024. Chart: https://modern-mba.com/case/ozempic#chart-5 · Sources: https://modern-mba.com/case/ozempic#sources

### Why the reward has to be enormous

Prescription drugs in development against those approved in the U.S. and EU. The second bar is not a rendering error: 114 cleared in 2019.

|  | In development | Approved |
| --- | --- | --- |
| 2013 | 10,479 | 56 |
| 2014 | 11,307 | 81 |
| 2015 | 12,300 | 149 |
| 2016 | 13,718 | 49 |
| 2017 | 14,872 | 138 |
| 2018 | 15,267 | 143 |
| 2019 | 16,181 | 114 |

Source: Modern MBA, “Why Ozempic is so expensive”, aired October 2024. Chart: https://modern-mba.com/case/ozempic#chart-6 · Sources: https://modern-mba.com/case/ozempic#sources

### The insulin cartel

Cost of a year's supply of insulin by manufacturer. Two rivals charged the same figure in the same year for seven straight years, then tripled it together.

|  | Eli Lilly | Novo Nordisk |
| --- | --- | --- |
| 2007 | $900 | $900 |
| 2009 | $1,200 | $1,200 |
| 2011 | $1,500 | $1,500 |
| 2013 | $2,100 | $2,100 |
| 2015 | $4,080 | $4,020 |
| 2017 | $5,280 | $5,100 |
| 2019 | $5,864 | $5,400 |

Source: Modern MBA, “Why Ozempic is so expensive”, aired October 2024. Chart: https://modern-mba.com/case/ozempic#chart-7 · Sources: https://modern-mba.com/case/ozempic#sources

### The patent cliff that caused it

Eli Lilly revenue and operating income, in billions. Zyprexa and Gemzar lost protection in 2011, Cymbalta and Evista in 2014, and the bottom line halved.

|  | Revenue | Operating income |
| --- | --- | --- |
| 2006 | $15.7B | $3.4B |
| 2007 | $18.6B | $3.9B |
| 2008 | $20.4B | −$1.3B |
| 2009 | $21.8B | $5.4B |
| 2010 | $23.1B | $6.5B |
| 2011 | $24.3B | $5.3B |
| 2012 | $22.6B | $5.4B |
| 2013 | $23.1B | $5.9B |
| 2014 | $19.6B | $3.0B |
| 2015 | $20.0B | $2.8B |

Source: Modern MBA, “Why Ozempic is so expensive”, aired October 2024. Chart: https://modern-mba.com/case/ozempic#chart-8 · Sources: https://modern-mba.com/case/ozempic#sources

### Insulin filled the hole

Eli Lilly sales in billions. As Zyprexa collapsed after its 2011 patent expiry, insulin revenue climbed on price rather than volume.

|  | Zyprexa | Insulin |
| --- | --- | --- |
| 2006 | $4.4B | $2.2B |
| 2008 | $4.7B | $2.8B |
| 2010 | $5.0B | $3.1B |
| 2011 | $4.6B | $3.6B |
| 2012 | $1.7B | $3.6B |
| 2014 | $1.0B | $4.2B |
| 2016 | $0.7B | $4.1B |
| 2018 | $0.5B | $4.3B |

Source: Modern MBA, “Why Ozempic is so expensive”, aired October 2024. Chart: https://modern-mba.com/case/ozempic#chart-9 · Sources: https://modern-mba.com/case/ozempic#sources

### The first mover lost the category

Byetta against Victoza, in millions. Eli Lilly sold the first GLP-1 ever made, in 2005, and Novo's 2009 version passed it within three years.

|  | Byetta (Lilly) | Victoza (Novo) |
| --- | --- | --- |
| 2008 | $751M | $0M |
| 2009 | $797M | $13M |
| 2010 | $430M | $342M |
| 2011 | $422M | $884M |
| 2012 | $278M | $1,402M |

Source: Modern MBA, “Why Ozempic is so expensive”, aired October 2024. Chart: https://modern-mba.com/case/ozempic#chart-10 · Sources: https://modern-mba.com/case/ozempic#sources

### GLP-1 ate the cash cow

Eli Lilly sales in billions. Trulicity passed insulin in 2019, cannibalizing the product the company spent a decade repricing.

|  | Insulin | Trulicity |
| --- | --- | --- |
| 2014 | $4.2B | $0.1B |
| 2015 | $4.1B | $0.2B |
| 2016 | $4.1B | $0.9B |
| 2017 | $4.2B | $2.0B |
| 2018 | $4.3B | $3.2B |
| 2019 | $3.9B | $4.1B |
| 2020 | $3.7B | $5.1B |

Source: Modern MBA, “Why Ozempic is so expensive”, aired October 2024. Chart: https://modern-mba.com/case/ozempic#chart-11 · Sources: https://modern-mba.com/case/ozempic#sources

### Bigger than insulin ever was

Eli Lilly sales in millions. Mounjaro passed the all-time insulin peak in its second year. Zepbound is the same molecule, uncovered.

|  | US dollars |
| --- | --- |
| Mounjaro 2023 | $5,163M |
| Insulin 2018 peak | $4,327M |
| Insulin 2022 | $2,060M |
| Insulin 2023 | $1,663M |
| Mounjaro 2022 | $483M |
| Zepbound 2023 | $176M |

Source: Modern MBA, “Why Ozempic is so expensive”, aired October 2024. Chart: https://modern-mba.com/case/ozempic#chart-12 · Sources: https://modern-mba.com/case/ozempic#sources

### Ozempic in five years

Novo Nordisk sales in billions. Ozempic now grosses more in a year than the company ever made from insulin, with Wegovy adding $4.6B on top in 2023.

|  | US dollars |
| --- | --- |
| 2018 | $0.3B |
| 2019 | $1.7B |
| 2020 | $3.1B |
| 2021 | $5.0B |
| 2022 | $8.8B |
| 2023 | $14.2B |

Source: Modern MBA, “Why Ozempic is so expensive”, aired October 2024. Chart: https://modern-mba.com/case/ozempic#chart-13 · Sources: https://modern-mba.com/case/ozempic#sources

### Specialization beats diversification

Annual operating margin. Novo went all-in on diabetes while Lilly ran three races at once, and by 2015 earned triple the margin.

|  | Eli Lilly | Novo Nordisk |
| --- | --- | --- |
| 2005 | 19% | 24% |
| 2007 | 21% | 21% |
| 2009 | 25% | 29% |
| 2011 | 22% | 34% |
| 2013 | 25% | 38% |
| 2015 | 14% | 46% |
| 2017 | 12% | 44% |

Source: Modern MBA, “Why Ozempic is so expensive”, aired October 2024. Chart: https://modern-mba.com/case/ozempic#chart-14 · Sources: https://modern-mba.com/case/ozempic#sources

### Who actually pays for the drug

Share of U.S. prescription drug spending paid out of pocket. Once the insurer pays, the insurer decides what a drug can charge.

|  | Percentages |
| --- | --- |
| 1972 | 80% |
| 1982 | 70% |
| 1992 | 51% |
| 2002 | 28% |
| 2012 | 18% |
| 2022 | 14% |

Source: Modern MBA, “Why Ozempic is so expensive”, aired October 2024. Chart: https://modern-mba.com/case/ozempic#chart-15 · Sources: https://modern-mba.com/case/ozempic#sources


## Takeaways

1. Two drugmakers now sit among the ten most valuable companies on earth, and they got there on obesity. **Eli Lilly** is worth **$817 billion** and **Novo Nordisk** **$589 billion**, against **$844 billion** for **TSMC** and **$690 billion** for **Tesla**. Neither firm was in this conversation a decade ago — in 2014 **Lilly** was worth **$77 billion**.
2. The reason is the size of the pool rather than the price of the drug. **890 million** people worldwide are obese against **486 million** with cancer, **262 million** with asthma, **200 million** with heart disease, **55 million** with dementia, and **45 million** with HIV. Oncology is the biggest drug class in the world at a projected **$370 billion**; weight loss is already second at **$133 billion**.
3. Insulin is where that justification breaks. **Eli Lilly** and **Novo Nordisk**, two of the three manufacturers who make **90%** of the world's insulin, charged **$900** for a year's supply in 2007 — both of them. They then charged **$1,200** in 2008, **$1,440** in 2010, **$1,500** in 2011, **$1,680** in 2012, and **$2,100** in 2013. The same figures, in the same years, from two rivals.
4. Then they accelerated. From 2014 the price roughly tripled again in five years: **Lilly** to **$4,080** in 2015, **$5,280** in 2017, and **$5,864** in 2019, with **Novo** a few percent behind at every step. The only “cheap” insulin price was always last year's, and a Type 1 diabetic cannot opt out of insulin.
5. The patent was supposed to stop this. **Humalog's** expired in 2013 and generics should have flooded in — instead **Lilly** filed secondary patents on incremental improvements, a practice known as patent thicketing, and the monopoly ran another full decade. Challenging a thicket costs more in legal fees than a small manufacturer can raise, so the challenge never comes.
6. The motive was a patent cliff of its own. **Lilly's** 2000s were carried by five blockbusters — **Zyprexa** at **$4.9 billion**, insulin at **$3.0 billion**, **Gemzar** at **$1.7 billion**, **Evista** at **$1.1 billion**, and later **Cymbalta** and **Cialis**. **Zyprexa** and **Gemzar** lost protection in 2011 and **Cymbalta** and **Evista** in 2014, and the drop was immediate.
7. So insulin was raised to cover the gap, almost line for line. **Zyprexa** went from **$5.0 billion** in 2010 to **$1.7 billion** in 2012 and **$0.5 billion** by 2018. Over exactly the same years **Lilly's** insulin sales climbed from **$3.1 billion** to **$4.3 billion**. Insulin was the one product where the patient pool was both large enough and desperate enough to absorb any price.
8. **Lilly** also invented this drug class and then lost it. **Byetta**, launched in 2005, was the first GLP-1 ever sold. It needed two injections a day, drew reports of kidney failure, pancreatitis, and deaths, and took an **FDA** black-box warning. Sales peaked at **$797 million** in 2009 and were down to **$278 million** by 2012.
9. **Novo Nordisk** took the idea and executed it. **Victoza** launched in 2009 as a once-daily GLP-1, did **$13 million** in its first year, **$1.4 billion** by 2012, and **$3.2 billion** by 2017 — clearing a billion dollars in its fourth year, five years faster than **Lilly's** **Trulicity** managed a decade later.
10. The replacement is already bigger than the thing it replaced. **Mounjaro** went from **$483 million** in 2022 to **$5.2 billion** in 2023, against a peak of **$4.3 billion** for insulin in 2018. **Zepbound**, the same molecule branded for the obese rather than the diabetic, managed only **$176 million** — because insurers and **Medicare** still will not cover weight loss, so patients pay about **$1,000** a month out of pocket or get the diabetic version instead.
11. **Novo** is further ahead. **Ozempic** went from **$0.3 billion** in 2018 to **$1.7 billion**, **$3.1 billion**, **$5.0 billion**, **$8.8 billion**, and **$14.2 billion** in 2023, with **Wegovy** adding **$4.6 billion** on top. That single drug now grosses more in a year than the company ever made from insulin.
12. Specialization is why **Novo** out-earns a much larger rival. **Novo** ran **46%** operating margins in 2015 and **44%** in 2017 against **14%** and **12%** at **Lilly**, on revenue that grew from **$7 billion** in 2008 to **$18 billion** in 2019 with a fraction of the assets. Going all-in on one disease worked better than **Lilly's** decade of diversification.
13. None of the usual gatekeepers apply to this drug class. Manufacturers normally have to buy doctors — big pharma paid physicians **$8.1 billion** in cash and **$13 billion** in total in 2023 — and negotiate placement with pharmacy benefit managers who take a cut of every rebate: **CVS Caremark** at **$187 billion** of revenue, **Express Scripts** at **$154 billion**, and **Optum** at **$116 billion** in 2023. With GLP-1s the patients arrive asking for the drug by name, which inverts every one of those negotiations.
14. **Lilly** has now removed the doctor from the transaction outright. **LillyDirect** is a company-run telehealth portal where an independent physician will write the prescription your own doctor declined and the drug ships to your door. Going direct-to-consumer is only possible with a product this viral — and the company that built it is the same one that spent a decade raising insulin prices on people who could not refuse.
15. The reclassification campaign is the actual product. **Purdue** built **OxyContin** into an epidemic by getting pain treated as a fifth vital sign; **Lilly** and **Novo** are now arguing that obesity is a disease rather than a condition. The medical case is arguable. The commercial case is not: disease status is what unlocks insurer and government coverage, and coverage is what turns **890 million** people into a recurring, patented, permanent prescription.
16. And obesity is a symptom, not the root cause. American obesity is downstream of a food system that permits additives, dyes, and hormones banned in most of the developed world. The country already spends **$13,493** per person on healthcare against **$5,493** in the UK and still dies six years earlier than Japan. The proposal on the table is to bill taxpayers and patients for a $1,000-a-month injection rather than change what is in the food.

## Common questions

### Why did insulin get so expensive?

Because three manufacturers make about 90% of the world's supply and they raised prices in step. Eli Lilly and Novo Nordisk both charged $900 for a year's supply in 2007, $1,200 in 2008, $1,500 in 2011, and $2,100 in 2013 — identical figures in identical years. By 2019 Lilly was at $5,864 and Novo at $5,400. The Humalog patent expired in 2013, which should have brought generics and lower prices, but secondary patents on incremental improvements extended the monopoly another decade. Insulin is not optional for a Type 1 diabetic, so the demand held at every price.

### How much money do Ozempic and Mounjaro actually make?

Ozempic did $0.3 billion in 2018 and $14.2 billion in 2023, with Wegovy adding $4.6 billion on top — more from one drug than Novo Nordisk ever made from insulin in a year. Mounjaro went from $483 million in its first year to $5.2 billion in its second, exceeding Eli Lilly's insulin peak of $4.3 billion in 2018. Zepbound, the same molecule branded for weight loss rather than diabetes, made only $176 million in 2023 because insurers do not cover it.

### Why is Zepbound so much smaller than Mounjaro if it is the same drug?

Coverage. Mounjaro is prescribed for Type 2 diabetes, which insurance pays for; Zepbound is prescribed for obesity, which insurers and Medicare still do not treat as a covered disease. That leaves Zepbound patients paying roughly $1,000 a month out of pocket. The practical result is that a lot of weight-loss demand is being met through the diabetic prescription instead, because that is the version somebody else pays for.

### Do drug patents actually make drugs cheaper in the end?

Yes, and that is the argument for the whole system. A drug costs an average of $2.3 billion and 10 to 15 years to develop, roughly nine in ten candidates fail, and in 2019 there were 16,181 prescription drugs in development against 114 approvals in the U.S. and EU. The patent is the reward that funds the attempt, and it expires. Lipitor peaked at $45 a tablet in 2010 and cost $5 by 2021 once generics arrived. The problem is not the bargain — it is what happens when a manufacturer finds ways to keep the monopoly running past the expiry date.

### What is patent thicketing?

Filing large numbers of secondary patents on small modifications to a drug so the original monopoly effectively never ends. There is no fixed definition of what counts as an improvement, so manufacturers submit tens or hundreds of them. A smaller competitor can challenge the thicket in court, but the legal cost exceeds what most drug startups can raise, so the challenge rarely comes. Humalog's patent expired in 2013 and the monopoly ran roughly another decade on this basis. The same tactic has been used on arthritis drugs, painkillers, and cancer treatments.

### Why don't the usual pharmaceutical sales tactics apply to weight-loss drugs?

Because for the first time the demand came before the marketing. Manufacturers normally spend heavily on doctors — $8.1 billion in cash payments to U.S. physicians in 2023, $13 billion including research funding and equity — and negotiate placement with pharmacy benefit managers, the middlemen who set drug tiers and take a cut of each rebate. With GLP-1s, patients pressure doctors for prescriptions unprompted and ask for brands by name, which means the manufacturer holds the leverage in every one of those negotiations rather than paying for it.

### Who invented GLP-1 drugs?

Eli Lilly, and it lost the category anyway. Byetta launched in 2005 as the first GLP-1 ever sold, aimed at blood sugar rather than weight. It required two injections a day, accumulated reports of kidney failure, pancreatitis, and deaths, and took an FDA black-box warning. Sales peaked at $797 million in 2009 and fell to $278 million by 2012. Novo Nordisk launched the once-daily Victoza in 2009, cleared a billion dollars in its fourth year, and has led the category since.

### Why is Novo Nordisk more profitable than Eli Lilly?

It never diversified. Novo went all-in on diabetes in the 2000s and built an entire suite of insulin products around it, while Lilly spread across antipsychotics, oncology, animal health, and diabetes at once. The margins show the difference: Novo ran 46% operating margins in 2015 and 44% in 2017 against 14% and 12% at Lilly, on revenue that went from $7 billion in 2008 to $18 billion in 2019 with far fewer assets.

### What is the case against treating obesity as a disease?

Not that obesity is harmless — it is that reclassifying it unlocks insurance and government coverage for a permanent, recurring, patented injection, and hands the pricing decision to two companies with a documented record of what they do with a captive patient pool. It also treats a symptom. American obesity is downstream of a food system that permits additives, dyes, and hormones banned elsewhere, and the proposed remedy is for taxpayers and patients to fund a subscription drug rather than fix the input.

## Discussion

- The industry's bargain is that roughly $2.3 billion and 10 to 15 years buys a monopoly, and the monopoly then has to end. What is the fair version of that trade, and how would you tell whether it is being honored?
- Two supposed rivals holding two thirds of a three-firm market charged $900, then $1,500, then $2,100 for a year of insulin in the same years. What are the innocent explanations, and how would you test them?
- Humalog's patent expired in 2013 and the monopoly ran another decade on secondary patents. Is that the system working as designed or failing? Who would have to change what?
- Lipitor went from $45 a tablet to $5 once its monopoly genuinely ended. If that is the system working, why is it so rarely allowed to?
- You are asked to reform drug pricing without destroying the incentive to invent. What do you change first, and what breaks?

## Sources

Company figures from Eli Lilly and Novo Nordisk annual reports and filings; drug-level sales as disclosed by their manufacturers; market capitalizations at 2024 close; insulin, Humira, Keytruda, and Lipitor prices as published list prices; patient-pool and drug-class projections from the industry estimates cited in the episode; physician payments from Open Payments data

---

From [Modern MBA](https://modern-mba.com/). Read this case in full at [https://modern-mba.com/case/ozempic](https://modern-mba.com/case/ozempic), or watch the episode at https://www.youtube.com/watch?v=7sUoZVke_30.