Novo Nordisk executives ignored the internal warnings that the company was not prepared enough for the launch of its drug to lose weight Wegovy, leaving the Danish pharmacist in a more vulnerable position when its rival Eli Lilly entered the market, six former employees involved in the discussions told Reuters.
Novo has enjoyed a tremendous unexpected gain of 46,000 million dollars in net profits since mid -2021, when Wegovy became the first treatment for highly effective obesity approved in the United States. But Lilly Zepbound therapy surpassed Wegovy in new weekly recipes this year and the company struggles to convince investors that it can continue to be competitive in the rise of weight loss.
In response, Novo is reorganizing his leadership team after the surprising dismissal of the executive president, Lars Fruerd Jorgensen. Other key executives had already resigned, including the United States Chief, Doug Langa, who, according to two ex -employees, had insisted on a commercial launch very shortly after Wegovy’s approval in the United States.
The sources spoke with Reuters under anonymity to speak frankly about their former employer.
In heated internal discussions, sales and marketing executives urged Langa to first ensure more supplies and medical insurance coverage, the two former employees said. Without solid coverage, many patients could not pay Wegovy’s monthly cost of up to $ 1,300. It was not expected that Lilly would enter the market for at least two years and Novo could have been better prepared, they said.
Langa stunned the orientation of the company’s headquarters in Copenhagen, which supposed much more modest sales until 2025, the two sources said. While Wegovy’s demand proved not to have precedents in a global obesity epidemic, Novo’s vision was too conservative based on his own indicators, they said.
“The prognosis was very wrong,” said one of the sources. Sales and marketing executives said at that time: “We have many investigations that tell us that this will take off as crazy. We have to wait until pharmacies are supplied and ready to work. But Doug Langa said … ‘No, we are going to launch.'”
Langa, who is still working for Novo on an advisor role, did not respond to a request for Reuters comments.
The details of Novo’s internal discussions have not been previously informed. Jorgesen and other executives, such as Financial Director Karsten Mock Knudsen, have publicly said they were surprised by the overwhelming demand at the launch of Wegovy.
A Novo spokesman said the company “used the available data and modeling forecasts to predict the demand” of Wegovy and is committed to improving access. Since then, the pharmacist has ensured broader insurance coverage and has offered discounts to reduce pocket costs.
Shortly after its launch, Novo faced repeated supplies of supplies, which left patients struggling to obtain their upcoming doses and prevented others from starting treatment. The high pocket costs pushed many to the compound market in search of cheaper copies.
“Novo did not understand the market they were building and were very inflexible in their approach,” said Evan Seigerman, BMO capitalist Markets. In a recent meeting of analysts and investors, “every time someone mentioned something that Lilly had made it creative or strategic, (Jorgensen) said: ‘Well, I don’t know if we can do that.”
Clinical trial data showed in 2018 that Wegovy could help people lose about 16% of their body weight, a great advance for more than 100 million American adults living with obesity. Other signals that suggested a massive demand from Wegovy included the comments of doctors and the prescription data of Ozempic, the Novo diabetes medicine that contains the same active ingredient as Wegovy, four of the former employees said.
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Novo caused a violent reaction of insurers, doctors and patients for launching Wegovy in the US
However, Novo remained firm in his “strategic aspiration” at the end of 2019, that annual obesity sales would double by 2025 due to Wegovy.
The company reported sales for the obesity of 895 million dollars in 2019 of Saxnda, a much less effective weight loss medication. In 2024, obesity sales had already reached 10.2 billion dollars.
“Although they saw the data, although they heard all the comments on the market, they never reflected it in the forecasts,” said a third source, a former high manager. “Many of us said again and again (internally) that this will be huge.”
The analysts had also questioned the forecasts when Novo announced them during an investor conference in 2019.
“You are sitting at the larger product that you have ever done,” said Keyur Parekh, at that time Goldman Sachs analyst, according to a recording of the meeting. “Why don’t the Board pushing you anymore towards a more ambitious goal?”
Novo repeated the employer in other countries, introducing “launch with volume limit” with minimum supplies. Only Denmark, his local market, was saved, said one of the former employees.
Novo prioritized the supply for high price markets such as Japan and the United Arab Emirates on key European countries where doctors influence global prescription trends, said the source.
Lilly entered with abundant supply; He quickly became the dominant actor in parts of Europe and the Middle East, two of the former employees said.
Novo’s spokesman said the company is still a leader in treatments for obesity, but did not comment on market share estimates.
Novo also caused a violent reaction of insurers, doctors and patients for launching Wegovy in the United States to more than $ 1,300 per month, about 350 dollars more than Ozempic. Lilly set the price of Zepbound at $ 1,080, similar to her Mounjaro diabetes medicine, which uses the same active ingredient. The American pharmaceutical company offered large discounts, including pocket prices from $ 349 through its Lillydirect pharmacy for some patients without insurance.
One of the former employees said that Novo was reluctant to offer significant reimbursements to pharmacy benefits administrators (PBM), who negotiate in the name of health insurers and employers.
Lilly entered a market in which “the payers were frustrated with the way Novo negotiated prices,” said the employee. “They were looking for a prices relief, which Novo was not giving them.”
“I felt that, throughout this trip, Novo is more conservative compared to Lilly,” said Lukas Leu, by Bellevue Asset Management in Switzerland, citing how Novo entered the market for direct pharmacies to the consumer later than Lilly. Leu’s background has Novo and Lilly actions. “And Lilly is bolder. Lilly is going to enter there.
With Reuters information.
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