Lilly’s China Price Cut Sparks Debate Over Margins, With Bulls Hailing Long-Term Opportunity

Market observers frame Lilly’s tactic not as a pure price war but as a calculated effort to cement leadership in China and secure a firm place on the country’s national reimbursement list (NRDL). A foothold on NRDL in the world’s most populous market would help guarantee broader payer coverage and patient access over the long term.

Analyst sentiment has shifted toward optimism despite the near-term margin concerns. Over the weekend, Zacks Research upgraded Eli Lilly from Hold to Strong Buy, arguing that expected volume growth across Asia and a robust product pipeline would more than offset near-term pricing pressure. This stance aligns with the broad view among major banks, which have maintained bullish targets for Lilly. In mid-December, institutions including Deutsche Bank and Goldman Sachs reiterated price targets above $1,100, citing the company’s expanded manufacturing capacity and the resilience of its long-term growth narrative.

Should investors sell immediately? Or is it worth buying Eli Lilly?

Lilly’s financial strength reinforces the strategic pricing move. The company posted a strong third quarter for 2025, delivering earnings per share of $7.02, ahead of consensus estimates, with revenue rising to $17.6 billion—an increase of about 54 percent driven by strong demand for incretin therapies. In line with solid cash generation, the Board of Directors also raised the quarterly dividend to $1.73, translating to an annualized payout of $6.92 per share. The dividend will be paid on March 10, 2026, to shareholders on the register as of February 13, 2026.

Looking ahead, Lilly’s emphasis appears to be shifting from injectable therapies toward oral options. The company is advancing Orforglipron, a daily GLP-1 receptor agonist, with regulatory updates anticipated in the first quarter of 2026. A successful oral formulation could alleviate some supply-chain pressures tied to injectable pens and broaden access for patients who prefer oral medications, potentially unlocking additional growth opportunities in the near term. The market will remain keyed to regulatory developments and the company’s ability to monetize its expanding product ecosystem while navigating pricing dynamics in major markets.