Surging demand for drugmaker Novo Nordisk’s highly popular diabetes treatments Ozempic and Wegovy, which have become household names in the U.S. as weight-loss medications, has created a major supply shortage that has left Americans empty-handed, as insurance complications compound Americans’ access to the booming drugs.
Novo Nordisk admitted in a statement last month demand for Wegovy “continues to outpace our increasing production” and it anticipates an “ongoing supply disruption,” though it pledged at the time to limit quantities of its lower-dose versions of the drug (0.25, 0.5 and 1 milligrams) for retail pharmacies “in an effort to support continuity of care for existing patients.”
The primary reason is a shortage of the drug semaglutide, sold as both the diabetes treatment Ozempic and as Wegovy, though CEO Lars Fruergaard Jorgensen told Bloomberg last month that the drugmaker is “not concerned” about ongoing supply shortages, even after he admitted at a Reuters Newsmaker event it could “take quite some years” before the company fully meets demand for the drug.
Unlike Wegovy, Ozempic and Eli Lilly’s diabetes treatment drug Mounjaro have not been approved as a weight-loss drug, and so many insurance companies do not cover them for weight-loss—and according to the Associated Press, some insurers don’t cover Wegovy.
Mounjaro, the brand name for the drug tirzepatide, which also has been experiencing shortages, could also receive approval from the Food and Drug Administration to treat obesity, opening up insurance coverage options, the Associated Press reported.
Novo Nordisk reported a 29% increase in sales over the first six months of the year, resulting in “periodic supply constraints and related drug shortage notifications,” while the company expects sales to grow between 27% and 33% over the next year at a constant exchange rate.
More than 39%. That’s how far shares of Novo Nordisk have climbed since the start of the year, to just over $190 per share, an all-time high for the Danish drugmaker. That jolt includes its biggest ever one-day increase on August 8, when its shares skyrocketed more than 17% after a promising large-scale clinical trial of more than 17,000 adults found Wegovy reduced the risk of major adverse cardiovascular episodes by 20% in people over 45.
Demand for Wegovy and Ozempic, nicknamed Hollywood’s worst kept secret, has surged in recent months both as a treatment for type 2 diabetes, but for its side effect of reducing adults’ appetite, leading doctors to prescribe them as an off-label use. Billionaire X owner Elon Musk also attributed Wegovy to his weight loss in a post last October. Wegovy, a higher dose version of the semaglutide injection that acts by copying a hormone in the body that helps regulate appetite levels, received its approval for chronic weight management purposes from the FDA in June 2021. The approval made the once-weekly injection available for adults who are overweight or obese, and who struggle from either high blood pressure, high cholesterol or type 2 diabetes. Earlier this month, Wegovy was also launched in the U.K., though Novo Nordisk released the disclaimer that the launch would be “controlled and limited” due to supply issues. Ozempic, on the other hand, has not received approval from the FDA for weight loss, though it was approved in 2017 to lower blood sugar levels in adults with type 2 diabetes.