- Novo Nordisk said it would cut Wegovy’s prices amid rising sales and competition.
- Sales of the blockbuster drug more than doubled in the first quarter compared to the previous year.
- Novo faces competition from Eli Lilly and intense U.S. government oversight of drug prices.
Danish drugmaker Novo Nordisk will cut prices of its weight-loss drug Wegovy in a bid to increase sales volumes and face fierce competition.
Prices of the blockbuster drug fell in the first quarter. The company plans to continue lowering prices in the United States due to high volume and competition, said CFO Karsten Munk Knudsen during the company’s earnings call on Thursday.
Wegovy’s sales more than doubled in the first quarter from a year earlier, to 9.4 billion Danish crowns, or $1.3 billion, according to company results. In the United States, more than 25,000 new patients are starting the drug each week, up from 5,000 at the start of the year, Knudsen said.
Knudsen and CEO Lars Fruergaard Jorgensen said during the earnings conference call that they are prioritizing affordability at Wegovy, instead of keeping prices high – despite significant demand at current costs. They did not say how much Novo plans to reduce Wegovy’s prices.
The Danish pharmaceutical maker, which also produces the viral weight loss drug Ozempic, reported better-than-expected sales of 65 billion Danish crowns, or $9.4 billion, in the first quarter. The company also raised its guidance for 2024 and said it expects sales growth of between 19% and 27%.
Wegovy’s price cuts come as Novo faces competition from U.S. rival Eli Lilly, which also reported profits this week and reported a 26% increase in first-quarter revenue. Eli Lilly said revenue growth was driven by Ozempic and Wegovy’s competitors Mounjaro and Zepbound, which are used to treat type 2 diabetes and obesity, respectively.
Novo’s proposed prices for Ozempic and Wegovy have recently come under political scrutiny. Last week, U.S. Senator Bernie Sanders launched an investigation into Novo’s “shockingly high prices” for the two drugs in the United States, which he said are much higher than in other countries.
Wegovy and similar weight loss drugs have become a huge business. With the U.S. adult obesity rate at around 40%, drugs could be prescribed to 15 million Americans in the next few years, according to a 2023 Goldman Sachs report. The bank estimates that the drug market anti-obesity is expected to reach $100 billion by 2030.
The coveted drugs are being scooped up by celebrities like Oprah Winfrey, Elon Musk and Charles Barkley. They are also gaining popularity with people who go out of their way to afford them.
businessinsider
