Shares in Danish pharmaceutical company Novo Nordisk fell 18% on Wednesday after the firm warned that profits and sales would continue to decline due to steep price reductions and growing competition in the weight-loss drug market.
The company, which makes popular treatments such as Ozempic and Wegovy, reported that it expects profits and sales to drop by up to 13% this year. Chief executive Maziar Mike Doustdar described the pricing pressures as “unprecedented” and “painful” during an interview on CNBC’s Early Edition Europe, adding that investors should expect the company’s share price “to go down before it comes back up.”
Novo Nordisk attributed part of the pressure to a deal with former US President Donald Trump, aimed at lowering the cost of weight-loss drugs for Americans. Under the so-called “most favoured nation” agreement, government-run site TrumpRx offers Wegovy and Zepbound for as low as $250 per month, while Medicare prices for Ozempic, Wegovy, Mounjaro, and Zepbound are set at $245. Without insurance or discounts, these medications can cost over $1,000 per month in the US.
Doustdar, who became CEO last summer, said the price cuts for Wegovy should be viewed as “an investment for our future,” opening access to the drug to more patients. He stressed that Novo Nordisk is not seeking a “race to the bottom” on pricing but is focusing on expanding the market in a rational manner.
The company has faced ongoing challenges, including thousands of job cuts and intensifying competition from rivals such as Eli Lilly, which produces Zepbound and Mounjaro. Patent expirations have also contributed to the competitive landscape. Karsten Munk Knudsen, Novo Nordisk’s chief financial officer, told the BBC that Indian and Chinese patents for semaglutide—the active ingredient in Ozempic and Wegovy—will expire in the coming months. He estimated that this could have a 2% impact on group sales this year.
While low-cost copycat drugs are emerging following patent expiry, concerns have been raised about the safety of some alternatives. Novo Nordisk maintains that the company aims to increase market access while ensuring patients receive effective and safe treatment.
Demand for weight-loss medications has surged in recent years, with global competition driving down prices. The combination of government-mandated price reductions, patent expirations, and rising rivals has created a challenging environment for the Danish firm.
Novo Nordisk said in a statement on Tuesday that “lower realised prices linked to investments in market access, amplified by the [most favoured nation] agreement with the US Administration,” were reflected in its revised profit and sales guidance. The company added that intensified competition and the impact of patent expiries in certain markets also contributed to the decline.
As the market adjusts, Novo Nordisk is betting on broader access and long-term growth, even as investors face short-term volatility in the company’s stock.
