Eli Lilly Strikes Deal With Trump: Why Shares Are Up 10% Since
The world’s most valuable healthcare stock, Eli Lilly and Company (NYSE: LLY), just dropped huge news. Like Pfizer (NYSE: PFE), Lilly announced a drug pricing deal with the Trump Administration. Below, we’ll break down what this means for Lilly going forward, as well as how the market and analysts are reacting.
Lilly Makes Concessions to Government Channels, Protects Commercial Pricing
Starting April 1, 2026, Medicare will begin covering Lilly’s leading weight loss drug, Zepbound, along with Mounjaro, at $245—a 55% discount from current net prices, according to Leerink Partners. While this is a steep concession, it opens a vast new market for Lilly.
Currently, Medicare and Medicaid sales make up a small fraction of Lilly’s total volume. This means that the firm isn’t relying on these high-priced sales to drive growth. With a meaningful rise in volume from Medicare and Medicaid, the result could be net-positive revenue growth.
On the consumer side, the company is slightly reducing the price of Zepbound by $50 through its direct-to-consumer (DTC) channel, LillyDirect.
Emgality, Trulicity, and Mounjaro will see sharper price drops of 50% to 60%.
However, this won't dramatically affect revenue, as LillyDirect is not a primary sales channel and private insurers already cover many of these drugs. Most importantly, Lilly avoided mandatory price cuts for private insurers, successfully protecting its largest and most lucrative revenue channel.
Lilly Wins Big: Tariff Exemption and FDA Fast-Track for Orforglipron
In exchange for these pricing concessions, Lilly is receiving a three-year tariff exemption. This is a key win, as tariff worries weighed on the stock through much of 2025. The company also received a Commissioner's National Priority Voucher for its oral weight loss drug candidate, orforglipron, another significant victory, as these vouchers can radically reduce the time the Food and Drug Administration (FDA) takes to review a new drug application.
The timeline for orforglipron's approval could fall from 10 to 12 months to just one to two months, allowing Lilly to start generating sales more quickly. While FDA approval is not guaranteed, the expedited process dramatically improves the drug's commercial outlook.
Markets and Analysts Show Support for Lilly-Trump Deal
The market reaction to the deal has been positive, with the stock gaining 1.3% on Nov. 6, the day of the announcement. As of the Nov. 12 close, investors have driven shares up by 10%.
From Nov. 6 to Nov. 12, Lilly shares outperformed both the S&P 500 and the healthcare sector, showing that Lilly is gaining due to company-specific developments, rather than a rise in the overall market.
Several Wall Street analysts have become more bullish on Lilly shares. BMO Capital Markets, UBS Group, and Leerink Partners all raised their Lilly price targets on or after Nov. 6.
Notably, the average target among these three analysts rose by 21%, with multiple analysts citing positive implications of the deal. Strong data surrounding Lilly’s investigational weight loss drug eloralintide likely contributed to these price target enhancements as well.
Among analysts who have issued price targets on Lilly since Nov. 6, the average comes in at approximately $1,066.
This implies around 5% upside potential in shares, a solid improvement over the 3% downside implied by the consensus target of approximately $999.
This deal positions Lilly to capitalize on increased volume from Medicare and Medicaid without sacrificing profitability from private insurers. The price cuts are strategically limited, while the rewards—tariff relief and a fast-tracked FDA review—are significant.
Additionally, accelerating orforglipron’s review means Lilly could have another blockbuster on its hands sooner rather than later.
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