Novo Nordisk’s Multi-Pronged Strategy to Regain Market Share in Obesity Drug Market
The pharmaceutical firm Novo Nordisk is taking decisive steps to recapture market share lost to Eli Lilly in the competitive obesity drug market. One of its key products, Wegovy (semaglutide), is an injectable prescription medicine designed for weight loss when used in conjunction with a comprehensive weight loss plan and increased physical activity.
In a recent development, Novo Nordisk announced a strategic partnership with CVS Health Corporation to give Wegovy preferred coverage status over its competitor Zepbound for insured customers seeking obesity medications. Additionally, CVS pharmacy will offer Wegovy at a discounted rate for cash-paying customers without insurance coverage. This collaboration follows a similar agreement between Novo Nordisk and telehealth company Hims & Hers Health to provide discounted access to Wegovy. Furthermore, Novo Nordisk offers weight loss products through its NovoCare Pharmacy program at reduced prices.
The shortage of glucagon-like peptide-1 medications like semaglutide and tirzepatide in 2022 prompted the FDA to declare the shortages resolved earlier this year. During the shortage period, compounded versions of these medications became a more accessible and cost-effective option for patients. Telehealth platforms such as Hims & Hers facilitated access to compounded GLP-1s at a lower cost than branded products, posing a challenge to Novo Nordisk’s sales of Wegovy, especially with the competition from Eli Lilly’s Zepbound.
With the resolution of shortages, compounded GLP-1s are gradually being phased out, making way for discounted branded drugs. Both Novo Nordisk and Eli Lilly have embraced a direct-to-consumer model for their obesity drugs. Eli Lilly introduced LillyDirect for Zepbound, offering uninsured or under-insured individuals the opportunity to purchase the product directly with a prescription. Novo Nordisk’s NovoCare Pharmacy allows uninsured patients to access Wegovy for $499 per month, in line with the discounted price offered through Hims & Hers.
In a move to make obesity treatments more accessible, CVS Caremark, the largest pharmacy benefit manager in the US, will designate Wegovy and Saxenda as preferred GLP-1 medicines on its commercial formularies starting in July. This may result in lower out-of-pocket costs for insured patients seeking obesity treatments, with monthly cost-sharing typically below $100. Conversely, Zepbound may no longer be preferred or even excluded from certain formularies.
Novo Nordisk’s comprehensive strategy to regain market share in the obesity drug market involves partnerships with major healthcare players, direct-to-consumer offerings, and competitive pricing strategies. By leveraging these initiatives, the company aims to strengthen its position and drive growth in the lucrative weight loss medication sector.
