- The Food and Drug Administration on Friday approved Novo Nordisk’s newest treatment for obesity, a weekly injection called Wegovy. The Danish company followed up Monday with an announcement that it will set the list price at $1,297 a month, equivalent to its daily obesity drug Saxenda.
- Saxenda has been the most successful obesity drug launched in the past decade, earning sales of 5.6 billion Danish kroner, or about $918 million, in 2020. Wegovy is a similar drug to Saxenda, coming from class of drugs called glucagon-like peptide 1, or GLP-1, agonists, which are mainly used to control diabetes.
- In diabetes, Novo’s GLP-1s are likely to face new pressure soon from rival Eli Lilly, which has developed a weekly combination shot called tirzepatide that has outperformed Novo’s weekly drug. Novo is developing a similar drug, but it hasn’t completed early stage trials.
Wegovy contains the same active ingredient as Novo’s weekly diabetes shot Ozempic and its daily pill Rybelsus, a compound called semaglutide. The compound governs the body’s secretion of insulin and glucagon, hormones that modulate blood sugar levels.
Novo and Lilly are by far the two biggest competitors in the GLP-1 space, but only Novo has tested its products as obesity-specific drugs in the absence of pre-existing diabetes. This has added a small but growing revenue stream to Novo’s sales outlook, while its flagship insulin franchise has been in retreat.
GLP-1s as weight-loss drugs are not without controversy, especially given the price. Many U.S. insurers require doctors to seek permission to prescribe it, and cut off patients who don’t lose 4% of their body weight in the first 16 weeks, as the label specifies.
By keeping the Wegovy price in line, the Danish company increases the chances that insurers will allow prescribing it on a similar basis as Saxenda. Moreover, Novo was among the companies that has come under heavy criticism for high insulin costs, and won’t want to resuscitate any criticism over pricing.
Expanding sales of GLP-1s in obesity will be an important part of the company’s strategy as Lilly prepares to submit tirzepatide to regulators later this year and launch it next year. The drug has completed all the necessary Phase 3 trials for an FDA submission, including one in which all of the doses it tested reduced patients’ blood sugar levels more than the highest dose of Ozempic, as well as leading to greater body-weight losses.
Tirzepatide is also being tested as a weight-loss drug in non-diabetics.
In coming up with a response to tirzepatide, Novo has lagged behind. Its combination project is in Phase 1 trials, putting it several years from the market if it can succeed in the clinic. However, Novo is closer to market with a novel diabetes product in its once-weekly insulin, which is in Phase 3 trials.