Wegovy maker warns of 'painful' price cuts as shares plunge - BBC

ShareSaveMitchell LabiakBusiness reporterShareSaveGetty ImagesShares in the Danish company which makes Ozempic and Wegovy plunged 18%, as its boss warned things would get worse before they improve following steep price cuts. Novo Nordisk had reported it expected profits and sales to fall by as much as 13%, and on Wednesday chief executive Maziar Mike Doustdar called pricing pressures "unprecedented" and "painful". Novo Nordisk said the situation had been "amplified" by a deal the firm and its rival Eli Lilly made with US President Donald Trump to lower the cost of weight-loss drugs for Americans. The company has faced turmoil in recent months, announcing thousands of job cuts amid warnings of increasing competition and the impact of patents expiring. Doustdar, who was appointed chief executive last summer, said he hoped the price reduction in Wegovy would be "an investment for our future" and open up access to the drug to more people. People should expect the company's share price "goes down before it comes back up," he told CNBC's "Early Edition Europe". Weight-loss drugs like Novo Nordisk's Ozempic and Wegovy and Eli Lilly's Zepbound and Mounjaro have soared in popularity over the last few years, and competition between the firms has driven down prices. Patent expiry has also led to rise of low-cost copycat weight-loss drugs, with warnings about the safety of some of them. Novo Nordisk's chief financial officer Karsten Munk Knudsen told the BBC's World Business Express that its Indian and Chinese patents on semaglutide - the technical name for the drug used to treat type 2 diabetes and obesity - expire in "a few months' time". He said this would lead to increased competition from similar treatments and expected a "2% impact on group sales for this year". Asked about falling prices, he said: "We're absolutely not in a race to the bottom, but we are in a race to expand the market in a rational way." In the US, Trump has pushed to make weight-loss medication cheaper after he complained that the "fat drugs" were more expensive there than in other countries. In November, he announced the "most favoured nation" agreement with Novo Nordisk and Eli Lilly. He said at the time that users of government-run website TrumpRx would be able to get Wegovy and Zepbound from $350 (£255) per month on average and that this would to drop to $250 a month. He added that Medicare prices of Ozempic, Wegovy, Mounjaro and Zepbound will be $245. Many weight-loss drugs cost over $1,000 a month in the US without insurance or discounts. Novo Nordisk said on Tuesday that "lower realised prices linked to investments in market access, amplified by the agreement with the US Administration to bring GLP-1s to more Americans at a lower cost is assumed" in its lower and sales profit guidance. It added that "intensifying competition and negative impacts from the compound patent expiry in certain markets" had also hit its sales and profit guidance. Later on Wednesday, the share price of Novo Nordisk's US rival Eli Lilly rose after it told investors that profits and sales would be higher than expected. Dan Coatsworth, an analyst at AJ Bell, said key to Eli Lilly's success was that it had done a much better job than Novo Nordisk of tackling the side effects of weight-loss drugs. "There is a lot of work, and it's a very slow process, but just seems to be coming out of it very well," he said. He added investors have also been more willing to put money into Eli Lilly than into its competitor Novo Nordisk, which has had "a succession of bad news", following last year's change in chief executive, and jobs cuts announced in September.