At the recent Bio event in San Diego, there was one topic that almost everyone was keen to discuss: Novo Nordisk’s glucagon-like peptide-1 (GLP-1) drugs, Ozempic and Wegovy (generic name: semaglutide).
Ozempic was first approved by the FDA in 2017 as a weekly injection for type II diabetes. One of the common side effects was weight loss. In June 2021, a higher dose of semaglutide – Wegovy – was approved by the FDA for “chronic weight management.”
By March 2022, a shortage of Wegovy was declared in the US because of huge demand for the drug. Novo Nordisk recently said that around 25,000 new US patients are starting Wegovy each week – around four times higher than the number of patients compared with December 2023. The company is running manufacturing lines “24 hours a day, seven days a week.” There are also global shortages of Ozempic, which is being used off label for weight loss. Consultants in the biopharma industry have described the demand for the drugs as “off the chart.” At Bio, participants in a panel discussion on obesity drugs said that the market dynamics for this segment are still emerging so it’s difficult to predict what will happen – but it’s definitely going to be a significant market.
Arguably, it is something we should have seen coming. The populations of western countries are obsessed with weight – and weight loss. Extreme “fad” diets have been popular for as long as I can remember, and people have long sought a quick fix. Numerous celebrities have admitted to using Wegovy and Ozempic, endorsing the drugs’ effectiveness for weight loss – and tabloid newspapers are all too happy to report and gush over the results.
In my opinion, there’s nothing wrong with using a drug for weight loss – and I suppose people are rightly excited to finally have an approved option that is safe and effective. But when morbidly obese and diabetic patients are struggling to access a potentially crucial medicine like Ozempic, a few ethical questions spring forth. In some countries, guidance has been issued not to prescribe Ozempic off label while shortages persist.
In the drug development world, niche drugs for smaller patient populations has been the trend in recent years. But competition can be stiff. Conversely, the weight loss and anti-obesity market is enormous (no pun intended) – with more than though room for many players. It’s also in its early days, which means there are huge development opportunities in terms of optimization and differentiation. Long-acting formulations could be one area of focus. With weight loss drugs blurring the lines between patients and consumers, convenience and tolerability will be key. There is also a big opportunity in the space for maintaining weight after loss; people generally need help staying on target.
Ripples in the CDMO market
Novo Nordisk was not just a talking point at Bio because of the runaway demand for its medicines; the company is also shaking up the CDMO space.
In an unusual move, Novo Nordisk’s parent company Novo Holdings purchased CDMO Catalent – and then immediately announced plans to sell off three Catalent fill-finish sites to Novo Nordisk. The benefit of being a big pharma with a big bank account and a blockbuster drug: if you don’t have something you need, buy it. The facilities will be used to bolster production of Wegovy and Ozempic.
Catalent will continue to operate as a CDMO, but competitors that I spoke with at Bio claimed that Catalent customers were scrambling. There is a need to understand what the loss of three Catalent sites means for customers and their products. Novo Nordisk has reportedly said it will honor customer obligations, but the situation is still unsettling some customers.
One of Catalent’s customers is Eli Lilly – which competes with Novo Nordisk in the obesity market and whose own GLP-1 drugs are seeing soaring demand. Catalent’s extensive client list will no doubt include other competitors. It’s one thing to compete with another company – quite another to compete with them and pay them to produce your own drug.
The deal is currently awaiting approval from the US Federal Trade Commission, which asked for more information at the start of May 2024.
Bernie Sanders and the price controversy
Bernie Sanders, Chairman of the Senate Committee on Health, Education, Labor, and Pensions (HELP), is always concerned about drug prices in the US. With the surge in demand in Wegovy and Ozempic, Sanders sought a vote to subpoena Novo Nordisk President Doug Landa to testify why the prices for Ozempic and Wegovy are so high in the US. Sanders claims that Americans must pay $1,349 a month for Wegovy, compared to $92 in the UK, $186 in Denmark, and $265 in Canada.
“Further, if half of the adults in our country with obesity took Wegovy and the other new weight loss drugs, it could cost, and this is really quite incredible, $411 billion per year—$5 billion more than what Americans spent on all prescription drugs at the pharmacy counter in 2022,” said Sanders in a statement. “The HELP Committee also found that if half of all Medicare and Medicaid beneficiaries who are obese took Wegovy and other weight loss drugs, Medicare and Medicaid could spend $166 billion per year – roughly what these two major health programs spent on all retail prescription drugs in 2022. That would also be unsustainable.”
The subpoena vote was due to take place on June 18, but was cancelled on June 17 after Novo Nordisk CEO Lars Fruergaard Jørgensen agreed to voluntarily testify before the Senate committee in September.
“I enjoyed the opportunity of chatting with Mr. Jørgensen this afternoon and thank him for agreeing to voluntarily testify on a solo panel before the HELP Committee on the high cost of Ozempic and Wegovy in the United States,” said Sanders in a statement. “The scheduled subpoena vote is no longer necessary and will be cancelled.”
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