Pharma just ‘scratching the surface’ of weight-loss drug market
Novo Nordisk chief estimates industry reaching only 15% of potential customers at most
Pharma companies are just “scratching the surface” of the huge potential market for weight-loss drugs and should focus more on widening access, according to the boss of the company behind Wegovy and Ozempic.
Mike Doustdar, chief executive of Novo Nordisk, told the FT in an interview, “You need to expand the market especially if you work in a business like ours. In the US, there are 110mn people [with] obesity.”
He added that Novo, its main rival Eli Lilly, and US “compounding” pharmacies that make copycat obesity drugs combined “are scratching the surface — we’re getting no more than 10 to 15 per cent of that population at this point in time. There’s very little talk about the rest.”
Doustdar took over as Novo chief executive last August to try to improve the Danish company’s fortunes after a difficult period when it lost its market lead to Lilly and had some disappointing trial results.
It is hoping that the launch of its weight-loss drug Wegovy in pill form this year will help it win back ground, though Lilly has also just won US regulatory approval for its weight-loss pill Foundayo.
Doustdar said the need to expand access was one reason Novo agreed to cut prices for drugs sold via TrumpRx, the US president’s prescription website. Lilly and a number of other big pharma companies reached similar deals.
Novo is also planning sharp cuts to US wholesale prices for Wegovy and Ozempic, which is sold as a diabetes treatment. Prices will fall by 50 and 35 per cent respectively from January.
“The deal with the Trump administration, albeit works well for the US government, it also works very well for us,” he said, because it widens the customer base with lower prices.
One major challenge for Novo is patent expiries. Semaglutide, the active ingredient in Ozempic and Wegovy, has recently lost patent protection in Canada, India, Brazil and China, opening the door to cheaper non-branded “generic” drugs. At least 10 companies in India have already launched generics.
Emil Larsen, Novo’s executive vice-president of international operations, suggested price cuts could form part of its strategy to compete in a price-sensitive market like India.
Novo already cut the price of Wegovy injections in India by up to 37 per cent last year, with the highest dose of 2.4mg selling for about $187 a month compared with about $250 a month in the UK.
Larsen, who runs all overseas operations excluding the US, told the FT in an interview: “There’s already a crowded marketplace [in India] and it will get more crowded . . . our ambition is to remain competitive at where the prices land over the coming months.”
He also said that to compete with generics, Novo’s “number one is to underscore the quality of our products . . . There’s a trust and brand recognition element that we work with.”
He pointed out that although the company’s human insulin products lost patent protection decades ago, Novo remains a market leader because of its brand name, quality assurance and large-scale production.
To offset some of the effects of patent expiries, Novo has agreed partnerships. In Brazil, it has partnered with Eurofarma to launch Wegovy under the brand name Poviztra for weight loss and Extensior for diabetes.
In India, it has an agreement to launch Poviztra with Emcure Pharma. For Extensior it is working with Abbott. Both Emcure and Abbott have extensive distribution networks across the world’s most populous nation.
Larsen said a bigger challenge than competition from generics was the limited size of the weight-loss drug market in many parts of the world.
“The biggest problem we have from an opportunity perspective in a market like India is not yet competition, it’s that there’s hardly a market. There are more patients being treated in Denmark with Novo Nordisk products than [in] the most populous country in the world.”
Trust in established brands will be key to expanding access, he added.
“The strength of a quality brand with a legacy of delivering good outcomes at a reasonable price goes a very long way in emerging markets.”