In a significant strategic shift, Danish pharmaceutical giant Novo Nordisk announced on November 17 that it is reducing the price of its injectable obesity medication, Wegovy, in the United States. The company is also preparing an all-out push for its upcoming oral weight-loss pill, aiming to reclaim market share in the highly competitive and lucrative anti-obesity drug market.
New Pricing and an "All In" Oral Strategy
The company confirmed it will lower the monthly cost of injectable Wegovy to $349 for cash-paying patients, a substantial drop from the previous price of $499. This move is complemented by a new initiative where first-time doses of Wegovy and its diabetes counterpart, Ozempic, will be available for $149 per month. This discounted rate will apply to Medicare, Medicaid, and cash-paying patients through the government-backed TrumpRx platform or via commercial partners like GoodRx, WeightWatchers, and Costco.
Concurrently, Novo Nordisk is awaiting US regulatory approval for an oral version of Wegovy, expected by the end of the year. CEO Mike Doustdar, speaking at an event hosted by the Danish Shareholders Association, declared the company's intention to go "all in" on the pill. "We have more than enough pills this time, so we're going to go all in and really make this happen," he stated, highlighting the company's resolve to avoid the supply shortages that marred the 2021 launch of the injectable version.
Responding to Competition and Consumer Behavior
This aggressive pricing and product strategy is a direct response to intensifying competition, primarily from US rival Eli Lilly. Novo's earlier supply issues with injectable Wegovy created an opening for Lilly and compounded copycat versions to gain traction. The price adjustments also follow a previously announced deal with US President Donald Trump, scheduled to begin in January 2025.
CEO Doustdar pointed out a key difference in the weight-loss market, noting that consumers using these drugs exhibit more "consumer-like behaviour" compared to the company's traditional diabetes patients. This observation underscores the need for greater adaptability and agility in its commercial approach. "That requires that we need to very quickly adjust to this," he emphasized.
Market Reaction and Growth Challenges
The new strategy has been noted by market observers. Claus Henrik Johansen, CEO of Global Health Invest, welcomed the move, saying, "I like the initiative and the new tone. I have long waited for Novo to push a more aggressive strategy to try and regain momentum in the United States."
However, the company faces headwinds. Doustdar revealed that sales growth has slowed after an 18% increase in the first quarter, with fourth-quarter sales poised to fall by 4%. He framed this not just as a business challenge but as an access issue, stating, "You could say it's really bad. We are only giving medication to a fraction of those who want it, who need it." He believes the new pricing and output strategies can dramatically expand patient access.
While the plan is ambitious, some remain cautious. Paul Major, a portfolio manager at Bellevue Asset Management, characterized the strategy as a "'if you build it, they will come' argument," adding, "Prices fall, and you hope you get a volume offset. We'll have to see." As Novo Nordisk gears up for this critical phase, the global healthcare market watches closely to see if this bold play will help it win back its leading position.
