Novo Nordisk's Diabetes and Obesity Treatments Face Future Challenges

Novo Nordisk, a Danish pharmaceutical company, is facing challenges due to the high cost of its diabetes and obesity treatment products. The company's flagship products, Ozempic and Wegovy, have been in high demand, but this has led to increased prices and scrutiny from governments and consumers. As a result, Novo Nordisk's profit margins are under pressure, and the company may face more pain in the future due to potential regulatory changes and increased competition.

Novo Nordisk, a Danish pharmaceutical company, is encountering significant challenges in its diabetes and obesity treatment segment. The company's flagship products, Ozempic and Wegovy, have been in high demand, but this has led to increased prices and scrutiny from governments and consumers. As a result, Novo Nordisk's profit margins are under pressure, and the company may face more pain in the future due to potential regulatory changes and increased competition.

In the first half of 2025, Novo Nordisk saw sales growth for its diabetes and obesity care segment slow down. Sales for the portfolio, which includes Ozempic and Wegovy, grew by 16% to DKK 145.4bn ($22.57bn) [1]. This growth rate was lower than the 26% increase from the same period in 2024. Despite this, overall sales rose by 18% year-on-year at constant exchange rates (CER) to DKK 154.9bn for H1. Ozempic generated DKK 64.5bn in H1, while Wegovy contributed DKK 36.8bn.

The slowdown in sales has been attributed to competition from other companies. Eli Lilly, for instance, has surpassed Novo Nordisk's market lead with tirzepatide, marketed as Mounjaro in type 2 diabetes and Zepbound in weight loss. Tirzepatide has shown higher efficacy over semaglutide, the active ingredient in Ozempic and Wegovy [2]. This competition has led to lower sales for Novo Nordisk's products.

Additionally, the high cost of GLP-1 receptor agonists (GLP-1RAs) has been a significant factor. These drugs typically cost from $5,000 to $7,000 a year, raising questions about their sustainability [3]. This has led to concerns about the potential economic fallout if these drugs were to be widely covered by public insurance programs.

Novo Nordisk has responded to these challenges by cutting the price of Wegovy in the US and introducing more direct-to-patient delivery methods. However, the company has maintained that continued compounding is unlawful and unsafe.

The Trump administration is preparing a five-year pilot program that would allow Medicare and Medicaid to cover some of the most in-demand weight-loss drugs, including Ozempic and Wegovy. This program, which is scheduled to begin in April 2026 for Medicaid and January 2027 for Medicare, could transform obesity treatment for millions of Americans [2].

Despite these challenges, Novo Nordisk remains confident in its product portfolio and future pipeline. The company expects to maximize growth opportunities under the leadership of its new CEO, Maziar Mike Doustdar, who begins his tenure this week.

References:
[1] https://finance.yahoo.com/news/novo-nordisk-diabetes-weight-loss-121017710.html
[2] https://www.newsweek.com/medicare-update-trump-admin-launching-pilot-program-cover-ozempic-2107821
[3] https://www.cnbc.com/2025/08/07/eli-lilly-obesity-pill-weight-los-trial.html