Facing pricing pressure from Lilly's Zepbound, Novo Nordisk scales Wegovy supply

Novo Nordisk is facing fierce competition from Eli Lilly’s obesity rival Zepbound, which has shaken up U.S. pricing dynamics for the Danish company's popular GLP-1 drug. 

“Net pricing like-for-like” for both Wegovy and Ozempic will be down in the U.S. throughout the year due to the “increasing volume and competition,” Chief Financial Officer Karsten Munk Knudsen explained on Novo's first-quarter earnings conference call on Thursday.

The drugmaker touts a 55.3% market share in the GLP-1 segment, which is also populated by Eli Lilly's Mounjaro and Zepbound. While both companies struggle to put out enough product to meet surging demand, Novo scored an edge on the competition earlier this year with the acquisition of New Jersey-based CDMO Catalent for $16.5 billion via the drugmaker’s investment company Novo Holdings. 

Novo itself then acquired three of Catalent’s fill-finish sites in Italy, Belgium and Indiana for $11 billion, a move that should make an impact on filling capacity starting in 2026. That deal is expected to close by the end of this year and will expand Novo’s manufacturing footprint to 14 global sites.

Further investments across the supply chain are expected to “significantly” increase patient reach through 2023, the company noted in its earnings presentation. Upcoming capacity developments will be in areas including filling and tableting, assembly and packaging as well as active pharmaceutical ingredient production.

Obesity med Wegovy, specifically, has fallen hard on supply problems ever since launching in 2021. Novo addressed this in January with a relaunch that more than doubled the supply of starter doses after cutting back on the dose in May of 2023 to “safeguard continuity of care.”

That goal is still top of mind, the company said, meaning it will continue to “gradually scale efforts” throughout the rest of the year. In a follow-up announcement, Novo reiterated that its plan to “continuously increase” shipments of the three lowest dose strengths is working, but “overall demand will continue to exceed supply.”

Currently, three Wegovy dose strengths are listed as “limited availability” on the FDA’s shortage database. The estimated shortage duration is “TBD” and is attributed to demand increases. Ozempic, meanwhile, is marked as available after battling shortages last year.

Consistent supply will now be even more crucial for the drug, thanks to a key label expansion that covers cardiovascular risk reduction in certain patients. Wegovy is the first weight loss drug to score an FDA nod for that indication.

The semaglutide brands made up most of Novo’s total quarterly sales, contributing 61 billion Danish kroner ($8.7 billion) to the total haul of 65.3 billion Danish kroner ($9.4 billion).

A large chunk of sales come from international operations, where Novo’s GLP-1 products hold a 70% market share. Diabetes med Ozempic leads the charge with 47% of that.

On the other hand, the drugmaker’s rare disease sector sank 3% to 4.4 billion Danish kroner ($630 million), despite a 20% sales increase in North America.