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2023.11.27 10:06
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Lowering the entry barrier, Novo Nordisk considers flexible pricing for "miracle weight-loss drug".

"Wegovy," the "miracle weight-loss drug," has become extremely popular worldwide, and Novo Nordisk has quickly become the most valuable listed company in Europe in the "battle of weight-loss drugs." In light of this, Novo Nordisk is considering adopting flexible pricing for this "miracle weight-loss drug." On November 27th, Lars Fruergaard Jrgensen, the CEO of the Danish pharmaceutical giant Novo Nordisk, stated in an interview with the media that the company is willing to maintain "flexibility" in its pricing strategy. They are currently negotiating an innovative pricing agreement with healthcare payers for Wegovy, allowing medical service providers to pay in installments and reduce the pressure of one-time payments, thus expanding the usage of Wegovy. Jrgensen pointed out that in order to make substantial progress in treating obesity and other diseases, the number of patients who need treatment should far exceed the current millions of patients using the drug. In light of this, Novo Nordisk is willing to share the costs and is open to any type of arrangement that will be reached with the healthcare payers.

The "miracle weight-loss drug" Wegovy has become popular worldwide, and Novo Nordisk has become the highest-valued listed company in Europe. As the "weight-loss drug war" intensifies, Novo Nordisk is considering flexible pricing for Wegovy.

On November 27th, Lars Fruergaard Jrgensen, CEO of Novo Nordisk, the Danish pharmaceutical giant, stated in an interview with the media that the company is willing to maintain "flexibility" in its pricing strategy. They are currently negotiating an innovative pricing agreement for Wegovy with healthcare system providers, allowing medical service institutions to pay in installments and reduce the pressure of one-time payments, thereby further expanding the use of Wegovy.

Jrgensen pointed out that in order to make substantial progress in diseases such as obesity, the number of patients that the company needs to treat should far exceed the current millions of patients using the drug. Novo Nordisk is willing to share the cost:

We are open to what kind of arrangement we will reach with the healthcare system.

In order to enable Wegovy to be adopted by medical institutions earlier, patients and medical service institutions can make payments after starting to use the drug and seeing its effectiveness, without having to pay the full amount immediately.

This flexible payment method can reduce the initial cost of adopting the drug, benefit more people, and help expand the drug's usage rate.

Jrgensen also pointed out that although Eli Lilly's weight-loss drug, Tirzepatide (trade name: Zepbound), is priced about 20% lower than Novo Nordisk's Wegovy, Novo Nordisk has no plans to lower its price.

Jrgensen stated that Novo Nordisk is facing challenges similar to companies selling advanced therapies, as healthcare systems find it difficult to make commitments to payment plans for the next few years:

In Europe, it is usually funded by national governments, and these costs usually increase year by year.

The game behind is the competition for medical insurance coverage

On November 8th, Eli Lilly, the world's largest pharmaceutical company by market value, received approval from the U.S. Food and Drug Administration (FDA) for its injectable drug Tirzepatide (trade name: Zepbound), used to treat obesity and diabetes. This means that the drug can be widely sold in the United States, providing a new treatment option for millions of obese and diabetic patients.

Eli Lilly claims that this drug is a "powerful new option" for treating weight loss. It is widely believed that the approval of Zepbound has gradually put pressure on Novo Nordisk. In addition to its efficacy, Zepbound has a price advantage that consumers care about compared to Novo Nordisk's Wegovy.

Eli Lilly announced that Zepbound is priced at approximately $1,060 per month, about 20% lower than Wegovy. Media analysis pointed out that in the United States, Novo Nordisk's weight-loss drug Wegovy is priced at $1,349 per month, much higher than Ozempic, a diabetes drug with the same active ingredient, which has created substantial profits for the company. Behind the price war, there is also a battle for medical insurance coverage. Some analysts point out that the lower price may attract those who have little or no insurance coverage for weight loss drugs, but this is also the key to the competition between Novo Nordisk and Eli Lilly in the field of weight loss drugs. Currently, US insurance companies have been unwilling to pay for Wegovy, partly because of its high cost.

Some analysts also believe that Novo Nordisk's higher pricing for Wegovy may actually give it a greater advantage in negotiations with insurance companies, as insurance companies sometimes prefer drugs with higher prices and more rebates, as they can charge higher fees as a result.

For Eli Lilly and Novo Nordisk, winning market share and securing coverage by US medical insurance are necessary conditions for maximizing their long-term profits.