Novo Nordisk's International Headwinds: A Structural Challenge to Its Growth Engine

The immediate threat to Novo Nordisk's growth engine is now in focus. The company expects a "difficult year" in 2026 as competition intensifies following the expiry of market exclusivity in several international markets. This is not a distant risk but a direct, near-term pressure point that CEO Mike Doustdar explicitly tied to rivals entering territories where Novo has historically held high market share.

This competitive erosion is already being felt. In its recent Q3 earnings report, Novo Nordisk lowered its full-year sales forecast for the third time this year, a clear signal of ongoing market share loss. The data shows the slowdown: while its flagship obesity drug Wegovy still topped $3.1 billion for the quarter, its year-over-year growth rate slowed to 18% from 67% in the prior quarter. Similarly, diabetes drug Ozempic sales met expectations but grew a mere 3% year-over-year. This deceleration is happening against a backdrop of a powerful competitor; Eli Lilly reported triple-digit growth for its own obesity and diabetes drugs in the same period, and now holds a 58% share of prescriptions in the US market.

The strategic vulnerability is structural. International markets represent the company's biggest long-term volume opportunity for its weight-loss and diabetes franchise. Yet, as exclusivity lapses in these regions, Novo faces the fundamental reality that "when you have a very high market share, competition will take some of that share away." The company is not standing still, pointing to plans for capacity expansion and new products to defend its position. But the immediate calculus is clear: the engine that has powered Novo's expansion for years is now encountering headwinds from a rival that is not only catching up but, in key markets, pulling ahead.

The Competitive Landscape: Lilly's Ascent and Market Share Shift

The competitive threat is no longer theoretical; it is a measured shift in market share that is redefining the global GLP-1 landscape. As of September, IQVIA data shows Eli Lilly had captured 58% of total prescriptions for GLP-1 drugs in the United States, overtaking Novo Nordisk's 42%. This leadership position is backed by explosive growth, with Lilly reporting triple-digit year-over-year growth for both Zepbound and Mounjaro in its third quarter. The contrast with Novo's performance is stark. While Wegovy sales topped $3.1 billion last quarter, its year-over-year growth rate had slowed to 18%, a dramatic deceleration from the 67% pace seen just two quarters prior.

This isn't a battle for future potential but a war for present dominance. The scale of the shift is significant because it occurred in the core U.S. market, where Novo had long held a commanding lead. The data suggests a clear momentum transfer. Lilly's ascension is not merely a function of product efficacy; it is a strategic and commercial victory. The company has successfully leveraged its pipeline, manufacturing scale, and now, a new deal with the Trump administration to secure Medicare access, to accelerate its market penetration. Meanwhile, Novo's repeated lowering of its full-year sales forecast signals it is losing ground in this high-stakes race.

The broader market context amplifies the pressure. The global GLP-1 market is projected to expand from $52 billion in 2024 to $187 billion by 2032, a compound annual growth rate of nearly 17%. This massive growth trajectory means there is room for multiple players, but it also intensifies the battle for share. The prize is not just current revenue but future volume and pricing power. As the market matures, the company with the largest patient base and strongest payer relationships will be best positioned to capture the next wave of demand, whether for obesity, diabetes, or emerging indications. For now, that advantage has decisively shifted to Lilly.

Strategic Response and Financial Impact

Novo Nordisk's proposed defenses are a classic case of long-term strategy meeting near-term pressure. The company is betting on capacity expansion, higher-dose formulations, and a new product pipeline to hold its ground. Yet these are solutions that will take years to scale, leaving the company exposed to a "difficult year" in 2026 as exclusivity lapses in its international portfolio "could face". The financial impact of this transition is already visible in its lowered guidance, a signal that the company is losing market share to Eli Lilly in key regions.

Adding to this headwind is a new, direct hit to its U.S. revenue stream. Novo has accepted the U.S. Inflation Reduction Act's maximum fair price for semaglutide, the active ingredient in its core drugs. While the company did not disclose the exact figure, it confirmed the agreement will have a "low-single digit impact on sales". This is a structural reduction in pricing power that will persist, compounding the pressure from competitive erosion.

The competitive landscape is now bifurcating into two distinct battles. The first is the established war for injectable dominance, where Lilly holds a commanding lead in the U.S. The second is a nascent but critical front: the race to oral GLP-1 drugs. Here, Novo has a first-mover advantage, with its Wegovy pill already in the hands of patients and an FDA decision expected by year-end. Lilly's rival oral drug is pending U.S. approval, with a potential fast-track review. This new dimension introduces a focus on convenience and cost, with Novo's pill priced slightly lower than its injectable counterpart. The strategic bet is that this new channel will attract a different patient segment-those averse to needles or seeking a lower-cost option-thereby expanding the overall market and creating a new revenue stream.

The bottom line is a company navigating a multi-front challenge. Its defensive playbook is sound but delayed, while its offensive play in oral drugs is promising but unproven at scale. The financial impact will be a drag on profitability in the near term from both competitive share loss and the new price cap, even as it builds for a future where its first-mover status in pills could become a key asset.

Catalysts, Scenarios, and What to Watch

The path forward for Novo Nordisk hinges on a series of discrete events and metrics that will test the durability of its strategic response. The company has framed 2026 as a year of adaptation, but the outcome will be determined by execution on multiple fronts. The first and most immediate catalyst is the pace of market share erosion in specific international markets where exclusivity has expired. While the U.S. battle is now a clear contest, the real test of Novo's long-term volume opportunity lies in its 80 to 85 international markets. Here, the company must defend its historically high share against a ramping Eli Lilly. Watch for quarterly sales reports from these regions to see if the competitive pressure is concentrated in a few key countries or spreading more broadly, which would signal a deeper structural challenge.

Second, the success of its defensive playbook depends on tangible progress in capacity and product innovation. The company has pointed to capacity expansion, higher-dose formulations, and new products as tools to hold ground. Investors should monitor announcements and production data for signs that new manufacturing lines are coming online as planned. Similarly, the commercial rollout of higher-dose formulations-potentially offering better efficacy or convenience-will be a key metric for whether Novo can retain patients in the face of Lilly's aggressive pricing and marketing. Any delay or setback in these areas would validate the "difficult year" prognosis.

The third major front is the nascent but critical race for oral GLP-1 dominance. Novo holds a first-mover advantage with its Wegovy pill, but Lilly's rival candidate is under regulatory review and poised for a fast-track decision. The commercial performance of these two oral drugs will determine the shape of the market in the coming years. A key question is whether this new channel expands the overall market pie or simply cannibalizes injectable sales. The long-term $100 billion+ obesity market opportunity, as analysts project, depends on the industry's ability to scale production and distribution to meet surging demand. If oral drugs accelerate patient adoption and drive overall market growth, Novo's early entry could pay off. If they merely fragment the existing market, the competitive calculus shifts again.

The bottom line is that Novo's 2026 is a year of forward-looking tests. The company must demonstrate it can slow the bleeding in international markets, execute on its capacity and product pipeline, and successfully navigate the new oral drug battleground. Each of these will be measured in quarterly results and regulatory milestones. The financial impact of a "low-single digit" price cap in the U.S. will also compound these challenges, making every other metric more critical. The setup is clear: the company's growth engine is under pressure, and its ability to adapt will be judged by a series of concrete, upcoming events.