Packages of the weight-loss drug Wegovy from the pharmaceutical company Novo Nordisk lie on the sales counter in a Danish pharmacy.
Stefan Trumpf | Picture Alliance | Getty Images
Danish pharmaceutical giant Novo Nordisk is about to launch its hugely popular Wegovy obesity drug in Germany this month, but it might be a while before many patients see the advantages.
High costs and provide constraints threaten to weigh heavy on the rollout, whilst the corporate goals to emulate in Europe the runaway success its weight reduction drug has seen in the U.S.
Germany — Wegovy’s third European launch territory and the continent’s largest pharmaceuticals market — presents an unlimited potential customer base, with greater than half (52.1%) of residents registered as chubby.
Nevertheless, strict laws implies that slimming, weight-loss and appetite-suppressant medications should not covered by the country’s public medical insurance program, meaning the overwhelming majority of potential users will probably be left to foot the bill themselves.
“Since such uses are considered a matter of individual responsibility and private lifestyle, these medications should not statutorily financed by the solidarity-based community of those insured,” a spokesperson for Germany’s health ministry told CNBC via email. The country’s public medical insurance program covers around 90% of its residents.
Hefty price tag
Wegovy is predicted to retail between 170 and 300 euros ($190-$330) monthly in Germany, in line with pricing data shared with CNBC by Novo Nordisk. That is well below the U.S. list price of $1,350, although many users are eligible for subsidies.
Still, it’s seen as too expensive for a lot of public health systems in Europe.
Even in Denmark — Novo Nordisk’s home market — an application for Wegovy to receive public medical insurance coverage was rejected on the grounds that its cost was incommensurate with its therapeutic value.
The country’s largest private health insurer, Danmark, also announced that it could stop providing subsidies for weight reduction drugs from next 12 months as a consequence of a “huge increase” in demand.
They’re obviously in a capability constrained environment and we do not know the way much they’re willing to allocate to Europe.
Emily Field
head of European pharmaceuticals equity research at Barclays
In Norway, Wegovy’s second European market, the drug shouldn’t be covered by the general public health system, though Ozempic, its predecessor, is reimbursed for the treatment of type 2 diabetes.
Meanwhile, in the U.K., initial access to Wegovy under a two-year pilot program will probably be via hospital specialists and limited to those with a BMI (body mass index) of at the least 35 and one weight-related condition, reminiscent of diabetes or hypertension. As such, only around 35,000 people will give you the option to access treatment when tens of hundreds more might be eligible.
The German Obesity Society — which has received funding from Novo Nordisk — argued that such policies restrict weight-loss treatments only to wealthy individuals, who can afford such drugs out of pocket, and called on public health systems to do more to increase treatment and prevention measures.
“People living with obesity often must bear the financial burden of their medical treatment themselves. This significantly hinders evidence-based treatment and exacerbates health inequality,” a spokesperson for the group told CNBC.
Supply constraints
Emily Field, head of European pharmaceuticals equity research at Barclays, noted that this won’t be enough to dampen demand in Germany, certainly one of Europe’s wealthiest markets.
“Even at current prices in Germany, I still think there will probably be an honest amount of out-of-pocket demand,” she told CNBC via Zoom. “The interest may be very, very real.”
Limited supply, alternatively, could hinder momentum in an industry forecast to be price £200 billion inside the following decade.
In May, Novo Nordisk announced that it was cutting the availability of starter doses of its obesity drug in the U.S. because it struggled to maintain up with surging demand, including from non-obese people. Earlier this month, the corporate advised doctors in Germany to “prescribe responsibly,” limiting prescriptions to patients with medical needs.
Eli Lily, whose diabetes drug Mounjaro will also be used for weight reduction, has also faced supply gluts.
“From investors, there may be very little deal with any of the launches outside the U.S. They’re obviously in a capability constrained environment and we do not know the way much they’re willing to allocate to Europe,” Field said.
Continued health concerns
Results from Novo Nordisk’s closely-watched “Select” trial due in the summer could provide a vital litmus test for the industry. If the drug is found to have wider-reaching applications, including cardiovascular advantages, it’s more likely that it might be adopted under mainstream healthcare policies.
“Select will probably be the primary evidence that that is greater than an arrogance drug,” Field said. “[Public health services] don’t need to pay for it if it won’t tackle underlying health conditions.”
Still, the burden loss drug makers have some option to go in combatting wider health concerns.
Earlier this month, the European Markets Authority said it could review plenty of drugs used to treat obesity and diabetes amid reports that some patients had experienced thoughts of suicide or self-harm.
Meantime, the World Health Organization has said that weight-loss drugs shouldn’t be considered a “silver bullet” for tackling obesity, and as a substitute a part of a “comprehensive approach.”
Based on WHO, global obesity rates have almost tripled over the past decade. It’s currently estimated that 1 billion people are clinically obese, of whom around 650 million are adults, 340 million are adolescents and 39 million are children.
Disclosure: Barclays is an investor in Novo Nordisk and the German Obesity Society has received funding from the drug maker.