How Novo Nordisk Misjudged the US Market for Its Weight Loss Breakthrough
Novo Nordisk shook the pharmaceutical world with its weight loss treatment Wegovy, a breakthrough that generated billions in profit. But according to former employees, the company misread the U.S. market, overlooking early warnings and failing to prepare for demand, letting competitors take advantage.
What Went Wrong with Wegovy?
Why did Novo Nordisk stumble in the market it led?
The issue began in 2021 when Wegovy was approved. Despite internal concerns about supply shortages and weak insurance coverage, executives pushed for a rapid rollout. Six former staff members told Reuters that company leaders, including former CEO Lars Fruergaard Jorgensen and U.S. head Doug Langa, ignored marketing feedback that flagged these risks.
Forecasts also underestimated demand, causing long delays between prescribing and delivery. Consumers and insurers became frustrated, affecting Wegovy’s early reputation.
How Did Eli Lilly Win Ground?
In contrast, Eli Lilly entered the U.S. obesity market with Zepbound, backed by a clear, aggressive launch strategy: ample supply, lower pricing, and patient rebates, especially for the uninsured. This bold approach allowed Eli Lilly to overtake Wegovy in new prescriptions.
Meanwhile, Novo Nordisk (NVO) kept Wegovy’s price high and refused to match Lilly’s rebates, narrowing its competitive edge.
Did They Underestimate Insurance Issues?
Yes, they did.
Despite Wegovy’s high $1,300 monthly cost, the company assumed insurers would quickly cover it. That turned out not to be the case. Many U.S. payers were slow to add coverage, while prior authorization hurdles slowed patient access. Combined with supply bottlenecks, patients faced long waits or paid out of pocket, limiting Wegovy’s market momentum.
What Are the Consequences?
The consequences were swift and significant:
- Loss of first-mover advantage: Internal-source reports show Novo Nordisk fell behind as Lilly surged ahead.
- Leadership shake-up: The company replaced CEO Jorgensen to deal with strategic missteps and adapt to a competitive market.
- Market share shift: Wegovy saw declining U.S. penetration while Zepbound gained momentum.
What Is Novo Nordisk Doing Now?
Novo Nordisk is working to reorganize leadership and strengthen its obesity drug strategy. Plans include:
- Boosting supply chain capacity
- Negotiating better insurance access and rebates
- Accelerating pipeline drugs like CagriSema and others in development
The goal is to regain footing in a market now dominated by tougher, more agile competition.
Why This Matters for the Industry
This situation shines a light on broader trends in healthcare:
- Market readiness matters: A breakthrough drug isn’t enough without strong supply lines, insurance uptake, and pricing support.
- Competition moves fast: Competitors with better tactics can quickly challenge market dominance.
- Payor influence is huge: Insurance coverage and patient affordability are as critical as clinical effectiveness.
Final Thoughts
Novo Nordisk created an obesity treatment with major potential, but misjudged the U.S. launch by ignoring warnings on supply, cost, and insurance. As Eli Lilly pulled ahead, Wegovy lost momentum. Now with new leadership and strategic adjustments underway, Novo must regain its edge, and fast. For patients, providers, and investors, this story shows that even industry giants need to stay agile.
Should Novo regain its lead? Time and stronger market execution will tell.
Disclaimer
This content is for informational purposes only and not financial advice. Always conduct your research.