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Eli Lilly ( LLY ) announced it is cutting prices of its blockbuster weight-loss drug Zepbound after less than a year on the market.

The company is pricing its 2.5mg doses at $399 per month and 5mg doses at $549 per month, much less than the $1,060 list price per month when it launched in December last year. It is also a discount from estimated net prices, the price paid after rebates offered by pharmacy benefit managers (PBMs).

Evercore ISI estimated net prices for Zepbound to be $650 per month, according to an analyst note to clients on Tuesday.

"Those numbers are largely similar to the net prices as they stand today. Separately, compounders are offering price points <$200/month (depending on dose)," the analysts wrote, pointing to the controversial compounding pharmacy market that has flourished amid ongoing GLP-1 shortages.

Compounding pharmacies, which create substitute, off-patent versions of the drugs and are not recommended by the Food and Drug Administration (FDA), have flooded the market amid GLP-1 shortages in the past year. Lilly's drugs have fallen off the FDA's drug shortage list, which ends the right of compounding pharmacies to sell their versions of the drugs. Compounders have supplied the drugs to online buyers as well as to telehealth platforms, such as Ro .

In addition, Lilly announced the doses will now be in single-dose vials, rather than auto-injector pens, which are easier to manufacture and will help ease access to the drugs, Lilly said in a statement Tuesday.

"These new vials not only help us meet the high demand for our obesity medicine but also broaden access for patients seeking a safe and effective treatment option," said Patrik Jonsson, executive vice president and president of Lilly USA.

Market dominance

The new strategy, focused on those paying for the drugs out-of-pocket, will be available on the company's direct-to-consumer platform , LillyDirect, which launched in January this year.

Lilly has not provided any updates on how well the platform is doing, which now faces new competition with Big Pharma competitor Pfizer ( PFE ), which launched its own platform, PfizerForAll, on Tuesday.

Shortages have plagued the GLP-1 class of drugs, which includes competitor weight-loss drug Wegovy from Novo Nordisk ( NVO ), which has a higher list price than Zepbound. Wegovy has a list price of $1,349 per month.

Novo has not indicated whether or not it will reduce its prices in response.

The two companies combined comprised 99% of the GLP-1 market in 2023, according to new data from analytics firm GlobalData last week. GLP-1s have been around since 2005 as therapies for type 2 diabetes, but the latest formulas from Lilly and Novo have achieved the greatest percentage of weight loss ever, fueling their popularity outside of diabetes.

"The 11 approved drugs in the GLP-1 category generated $37.2 billion in 2023, cementing their place as one of the most lucrative therapies," according to Global Data.

The GLP-1 market is estimated to reach more than $150 billion by 2030.

Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee on most social media platforms @AnjKhem .