The recognition of Novo Nordisk’s weight-loss medicine has been unprecedented and has proven no indicators of fading. It’s clearly greater than a development spurt as spending on these medicine is anticipated to surge to $100 billion by 2035.
Whereas weight-loss drug Wegovy has skilled ballooning demand globally, one factor has stunned the 100-year-old Danish firm’s CEO: the willingness amongst Europeans to pay out of their very own pockets to entry it.
“The uptake we see has surprised us initially. We wondered, was that only a U.S. phenomenon? We tested it out in Denmark and Norway, we saw more or less the same,” Novo’s Lars Fruergaard Jørgensen informed the Financial Times.
“It’s perhaps the first time that you see a large population willing to pay out of pocket for medicine.”
Wegovy is barely obtainable in a handful of European nations together with Germany, Denmark, Norway and Switzerland, the place demand has expanded since its launch. Final 12 months, Novo noticed gross sales of weight problems medicine Wegovy and Saxendra enhance by 147% in native foreign money in contrast to 2022.
In European nations, Wegovy is usually not obtainable in public well being programs, which suggests a big portion of the purchases—80%, based on Novo—are paid for by customers out of their pocket. That’s in distinction to America, the place Novo says over 90% of Wegovy gross sales are lined both absolutely or partially by medical health insurance suppliers.
However anti-obesity medicine that additionally carry collectively different health benefits like Wegovy don’t come usually—and other people acknowledge that, the Novo chief stated.
“When there’s finally something that works and brings improved health and quality of life for the individual, there’s very high willingness to pay,” Jørgensen informed the FT.
The value of Wegovy differs between nations—in Germany it costs between €170 and €300 ($183 to $323) per thirty days, whereas in the U.K. the vary is £199 to £299 ($250 to $376) for a month’s provide. Wherever on this planet customers try to get their palms on it, the drug isn’t low cost and its demand exhibits no indicators of cooling.
Novo is in talks with healthcare programs to ease the monetary burden on customers by serving to them stagger the cost of Wegovy over many years.
Restricted provide
Novo hit new highs final week when it turned solely the second European firm to surpass a $500 billion market worth, because of blockbuster gross sales of its weight-loss-aiding medicine through 2023. Its shares have tripled since 2021 and final 12 months, because the Danish firm skilled a deluge of seekers for Wegovy and Ozempic, it turned more valuable than the economic system of Denmark, the place it’s domiciled. Whereas the medicine, described as a “game-changer” and “miracle,” have develop into sought-after the world over, there are nonetheless provide shortages and a sprawling counterfeit market fueled by these determined to entry the medicine.
Assembly the wants—and needs—of these chasing weight-loss aiding medicine (together with Novo’s diabetes drug Ozempic, which has the identical lively ingredient as Wegovy) has been a giant problem for the Danish pharmaceutical large. In response, Novo has tried curbing the provision of starter doses in some markets to make sure sufferers already prescribed the drug have entry to it.
Some nations, such because the U.Ok., have a particular association whereby the NHS offers a restricted provide of the drug for many who qualify underneath strict medical standards.
A booming 2024 for Novo
A part of the rationale why Novo’s weight-loss medicine have gotten the traction that they’ve is the well being advantages related to their consumption. In November, new information confirmed that Wegovy minimize the chance of heart-related occasions by 20%. That prompted the EU’s drug regulator to think about using Wegovy for extra than simply weight-loss, seeing because it positively impacts different areas of affected person well being.
As demand for the medicine continues to speed up, Novo has scrambled to get a grip on their provide. Late final 12 months, the Danish firm dedicated to spending $6 billion to bolster manufacturing in an effort to satisfy the worldwide demand. It additionally has plans to increase into Asia later this month, Reuters reported in November.
Gross sales for 2023 was up 31%, whereas year-over-year working revenue had climbed 37%. Within the present 12 months, Novo stated its income and working income (in fixed trade price phrases) may develop by as much as 26% and 29%, respectively.
Representatives at Novo didn’t instantly return Fortune’s request for remark.
