Wegovy maker warns of 'painful' price cuts as shares plunge

Novo Nordisk, the Danish pharmaceutical giant behind the popular weight-loss drugs Ozempic and Wegovy, saw its shares plummet by 18% following a stark warning from its CEO about impending 'painful' price cuts. The company announced on Wednesday that it expects profits and sales to decline by up to 13%, citing unprecedented price pressures and intensifying competition. CEO Maziar Mike Doustdar attributed the challenges to a combination of factors, including a deal with US President Donald Trump to lower drug prices and the expiration of key patents. The agreement, aimed at making weight-loss medications more affordable for Americans, has significantly impacted Novo Nordisk's revenue projections. Doustdar emphasized that the price reductions, particularly for Wegovy, are a strategic investment to expand access to the drug, despite the immediate negative impact on the company's share price. The pharmaceutical industry has witnessed a surge in demand for weight-loss drugs like Ozempic, Wegovy, and competitors such as Eli Lilly's Zepbound and Mounjaro. This increased competition, coupled with the entry of low-cost generic alternatives, has further pressured prices. The US government's intervention, through the 'most favoured nation' agreement, has accelerated these price cuts, with Trump aiming to reduce the cost of these drugs to as low as $250 per month for Medicare recipients. Novo Nordisk's challenges are compounded by the expiration of patents, which has led to a rise in cheaper, copycat versions of its drugs. The company's recent job cuts and the volatile stock market reaction underscore the broader turmoil in the pharmaceutical sector as it navigates these market dynamics.