Novo Nordisk, a Danish pharmaceutical company, is now the most valuable enterprise in Europe. So valuable it is worth more than the entire Danish economy.
In the past few years Novo Nordisk has seen an astronomical rise from a valuation of just over $100 billion in 2019 to over $600 billion by June 2024. This exponential increase has been primarily driven by the sales of its most popular brands, Ozempic and Wegovy, which have driven nearly $200 billion in annual sales world-wide.
Ozempic and Wegovy are both used to treat obesity, though the former is ostensibly marketed as diabetes medication. The active ingredient, semaglutide, suppresses the hormone that causes feelings of hunger meaning the consumer feels satiated sooner and for longer.
Being overweight is associated with a multitude of negative health effects, both mental and physical, which has led medical professionals to sing the praises of this new drug’s ability to reduce people’s weight. The benefits of these drugs to patients’ lives, such as increased fat loss associated with dramatically better heart health, joint support, and reduced risk of type two diabetes, as well as the flow on societal and economic and the wider economy, are even being touted as comparable to AI.
Economists are also excited about semaglutide’s potential. Due to the knock-on health benefits many are claiming Ozempic’s uptake will lead to rises in productivity, due to the reduction of out of work illness. Public spending is also likely to benefit. Obesity costs the NHS around £6.5 billion a year, and weight loss drugs may help reduce this. More intangibly, but certainly interesting, chain effects in other industries could see airlines save $80 million due to weight reductions meaning less fuel is needed to fly.
Despite the medical benefits and all their positive externalities, questions remain regarding the long-term physical and mental impacts of these medications.
It is estimated around 15% of the US have used Ozempic or Wegovy. Some have attributed this high uptake to the drug’s prolific and public use among the celebrity elite. Whilst doctors are happily prescribing these drugs to their obese patients, there are concerns among the medical profession that people of a healthy weight are simply using them to ‘shed a few pounds’ to get ‘beach body ready’. This has led to concerns that ‘quick fix’ weight loss drugs will perpetuate the already unhealthy societal obsession with the slim body type.
Further, these drugs remain prohibitively expensive for most. Online pharmacies are selling semaglutide injections for up to £200 in the UK and prices of Wegovy in the US reach $1,349 a month. As a result, those on lower incomes may not be able to reap the benefits as readily as those who can afford the drugs.
Despite this, the fast-food industry has been shaken by the increasing popularity of Wegovy and Ozempic. Krispy Kreme saw their share price downgraded due to the boom in popularity. It is not clear what direction the food industry will go in because of these trends, either matching the ‘healthy’ narrative or combating the drugs with food that is even more addictive. Regardless, due to the novelty of semaglutide products it would be wrong to suggest diet suppressing drugs have won out over excess food consumption just yet.
Crucially however for the UK health sector, semaglutide has been authorised for the treatment of adults with insufficiently controlled type 2 diabetes mellitus. The drug is not authorised for weight loss in the UK. But the increasing sales of it for off-label purposes are having tangible impacts on supply levels for those with type 2 diabetes. It remains relatively unknown how the UK will regulate this rapidly evolving trend, and what this will mean for those involved in production.
That said, semaglutide still represents a significant shift in medicines’ potential and ability to combat among the largest health crises facing the UK to date. With a new Labour Government looking to relieve the ever-growing pressure on the health service, it would be sensible for Labour to consider the policy and regulatory developments necessary to foster the potential of medical developments like semaglutide in combatting these immense challenges, whilst mitigating the risks for individual citizens in the UK. 