Novo Nordisk Faces Pain from Ozempic Price Cuts as Shares Drop 18%
In a turbulent turn for the pharmaceutical industry, Novo Nordisk, the Danish powerhouse behind blockbuster drugs Ozempic and Wegovy, has issued stark warnings about the 'painful' repercussions of aggressive price cuts. Shares in the company plummeted 18% on Wednesday, February 4, 2026, following the announcement that profits and sales could dip by up to 13%. This comes amid unprecedented pricing pressures, escalating competition, and the looming expiry of key patents, shaking investor confidence in one of Europe's largest firms.
The Rise and Challenges of Ozempic and Wegovy
Ozempic, primarily used to manage type 2 diabetes, and its sister drug Wegovy, targeted at obesity, have transformed the health landscape since their widespread adoption. Both rely on semaglutide, a GLP-1 receptor agonist that mimics a hormone to regulate blood sugar and suppress appetite. Over the past few years, these injections have exploded in popularity, fueling a global weight-loss boom. In the UK, where obesity affects over 25% of adults according to NHS data, demand has surged, with prescriptions rising dramatically post-pandemic.
However, this success story is now marred by market dynamics. Novo Nordisk's chief executive, Maziar Mike Doustdar, appointed last summer, described the situation as 'unprecedented' during a CNBC interview. 'Things will get worse before they improve,' he cautioned, pointing to the need for price reductions to broaden access. Yet, these moves are exacting a heavy toll, with the company already announcing thousands of job cuts in September 2025 amid rising costs and competitive threats.
US Policy Shifts Amplify the Pressure
A pivotal factor in Novo Nordisk's woes is a high-profile deal struck with US President Donald Trump. In November 2025, Trump announced a 'most favoured nation' agreement with Novo Nordisk and rival Eli Lilly, aiming to slash prices for weight-loss drugs on the government-run TrumpRx website. Under this pact, Wegovy and Eli Lilly's Zepbound could drop to an average of $350 (£255) per month, with further reductions to $250 planned. Medicare pricing for Ozempic, Wegovy, Mounjaro, and Zepbound is set at $245— a fraction of the over $1,000 monthly cost without insurance.
Trump's push stems from complaints about US prices being higher than in countries like the UK, where the NHS negotiates lower rates. Novo Nordisk's guidance explicitly links lower realized prices to this agreement, calling it an 'investment for our future' to reach more Americans. But for the company, it's a double-edged sword: expanded market access versus eroded margins.
Intensifying Competition and Patent Expiries
The weight-loss drug market, once dominated by Novo Nordisk, is now a battleground. Eli Lilly's Mounjaro and Zepbound have gained ground, particularly after addressing side effects like nausea and gastrointestinal issues more effectively. On the same day Novo Nordisk's shares tanked, Eli Lilly's rose as it forecasted better-than-expected profits and sales, highlighting the divergent fortunes of the two giants.
Analyst Dan Coatsworth from AJ Bell noted Eli Lilly's edge in managing drug tolerability, a 'slow process' that has won investor favor. In contrast, Novo Nordisk has endured a 'succession of bad news,' including leadership changes and layoffs. Compounding this, patents on semaglutide in India and China expire in just a few months, paving the way for low-cost generics. Novo Nordisk's CFO, Karsten Munk Knudsen, estimated a 2% hit to group sales this year from this alone.
'We're not in a race to the bottom, but a race to expand the market rationally,' Knudsen told BBC's World Business Express. Yet, warnings about the safety of copycat drugs—often produced in unregulated facilities—raise concerns for patients. In the UK, regulators like the MHRA have issued alerts on counterfeit versions, emphasizing the risks of unverified alternatives.
Broader Implications for UK Patients and the Economy
For British consumers, the US developments could indirectly influence pricing. The NHS already subsidizes Ozempic for diabetes but has been cautious with Wegovy for weight loss, approving it only for specific cases via a specialist service. As global prices fall, advocates hope for wider access, potentially easing the £6.5 billion annual burden of obesity on the UK health system.
However, Novo Nordisk's struggles ripple through Europe's economy. As Denmark's largest company, its downturn affects jobs and innovation funding. Doustdar remains optimistic, viewing price cuts as a pathway to long-term growth by democratizing treatment. But with shares volatile and competition fierce, the road ahead looks bumpy.
Looking Ahead: Balancing Innovation and Affordability
The saga of Ozempic underscores a pivotal moment for weight-loss therapies. While these drugs offer life-changing benefits—studies show up to 15% body weight reduction—they're not without controversy. Side effects, supply shortages, and ethical debates over 'quick fixes' for obesity persist. Novo Nordisk is investing in next-generation formulations to combat muscle loss and improve efficacy, but execution will be key.
Investors and health experts alike watch closely. Eli Lilly's recent gains suggest that superior side-effect management and strategic pricing could define winners. For Novo Nordisk, navigating patent cliffs and political pressures will test its resilience. As Doustdar put it, expect the share price to 'go down before it comes back up.' In the meantime, the quest for affordable, effective obesity solutions continues, promising both challenges and hope for millions worldwide.
This evolving story highlights the intersection of healthcare, business, and policy. Stay tuned to Everythiiing.com for updates on how these developments unfold.
