The popularity of Novo Nordisk’s weight-loss drugs has been unprecedented and has shown no signs of fading. It’s clearly more than a growth spurt as spending on these drugs is expected to surge to $100 billion by 2035.
While weight-loss drug Wegovy has experienced ballooning demand globally, one thing has surprised the 100-year-old Danish company’s CEO: the willingness among Europeans to pay out of their own pockets to access it.
“The uptake we see has surprised us initially. We wondered, was that only a U.S. phenomenon? We tested it out in Denmark and Norway, we saw more or less the same,” Novo’s Lars Fruergaard Jørgensen told the Financial Times.
“It’s perhaps the first time that you see a large population willing to pay out of pocket for medicine.”
Wegovy is only available in a handful of European countries including Germany, Denmark, Norway, and Switzerland, where demand has expanded since its launch. Last year, Novo saw sales of obesity drugs Wegovy and Saxenda increase by 147% in local currency compared with 2022.
In European countries, Wegovy is typically not available in public health systems, which means a large portion of the purchases—80%, according to Novo—are paid for by consumers out of pocket. That’s in contrast to America, where Novo says over 90% of Wegovy sales are covered either fully or partially by health insurance providers.
But anti-obesity drugs like Wegovy that also bring other health benefits don’t come often—and people recognize that, the Novo chief said.
“When there’s finally something that works and brings improved health and quality of life for the individual, there’s very high willingness to pay,” Jørgensen told the FT.
The price of Wegovy differs between countries—in Germany it costs between €170 and €300 ($183 to $323) per month, while in the U.K. the range is £199 to £299 ($250 to $376) for a month’s supply. Wherever in the world consumers are trying to get their hands on it, the drug isn’t cheap, and its demand shows no signs of cooling.
Novo is in talks with health care systems to ease the financial burden on consumers by helping them stagger the payment of Wegovy over many years.
Limited supply
Novo hit new highs last week when it became only the second European company to surpass $500 billion in market value, thanks to blockbuster sales of its weight-loss-aiding drugs through 2023. Its shares have tripled since 2021, and last year, as the Danish company experienced a deluge of seekers for Wegovy and Ozempic, it became more valuable than the economy of Denmark, where it’s domiciled. While the drugs, described as a “game-changer” and “miracle,” have become sought-after the world over, there are still supply shortages and a sprawling counterfeit market fueled by those desperate to access the drugs.
Meeting the needs—and wants—of those chasing weight-loss-aiding drugs (including Novo’s diabetes drug Ozempic, which has the same active ingredient as Wegovy) has proved a big challenge for the Danish pharmaceutical giant. In response, Novo has tried curbing the supply of starter doses in some markets to ensure patients already prescribed the drug have access to it.
Some countries, such as the U.K., have a special arrangement wherein the NHS offers a limited supply of the drug for those who qualify under strict medical criteria.
A booming 2024 for Novo
Part of the reason why Novo’s weight-loss drugs have gotten the traction that they have is the health benefits associated with their consumption. In November, new data showed that Wegovy cut the risk of heart-related events by 20%. That prompted the EU’s drug regulator to consider using Wegovy for more than just weight loss, seeing as it positively impacts other areas of patient health.
As demand for the drugs continues to accelerate, Novo has scrambled to get a grip on their supply. Late last year, the Danish company committed to spending $6 billion to bolster production in an effort to meet global demand. It also has plans to expand into Asia later this month, Reuters reported in November.
Sales for 2023 were up 31%, while year-over-year operating profit had climbed 37%. In the current year, Novo said its revenue and operating profits (in constant exchange rate terms) could grow by up to 26% and 29%, respectively.
Representatives at Novo didn’t immediately return Fortune’s request for comment.
