Novo's Weight-Loss Reign Crumbles Amid Competition

Novo Nordisk, once a leader in the weight-loss injection market with Ozempic and Wegovy, is experiencing a significant decline in its market share. This downturn is primarily driven by fierce competition from rival Eli Lilly & Co. and the proliferation of cheaper copycat drugs. Eli Lilly's tirzepatide-based Zepbound, launched in 2023, has shown superior weight-loss results compared to Novo's Wegovy and surpassed it in dollar sales last year, with projections indicating an extended lead by 2026.

Compounding Novo's challenges, an estimated 1.5 million patients in the US are reportedly using less expensive, compounded versions of GLP-1 treatments. While regulatory crackdowns have occurred, companies continue to exploit loopholes. Furthermore, Novo's patents for semaglutide are beginning to expire in several countries, paving the way for generic competition.

In response, Novo has launched NovoCare, a direct-to-patient business offering discounts on Ozempic and Wegovy. The company is also cutting jobs and prices to regain market advantage. The development of oral weight-loss medications represents a new frontier, with Novo securing an early lead with its pill version of Wegovy, though telehealth firms have also entered this space.

Despite these efforts, Novo's next-generation obesity treatment, CagriSema, underperformed in recent trials. The company is actively seeking deals to bolster its drug pipeline. Additionally, Novo, along with Eli Lilly, has agreed to lower prescription drug prices for Medicaid and Medicare programs in the US, a move that could impact overall sales growth but may grant expedited FDA review for new treatments.