Novo Nordisk, the pharmaceutical company behind the popular medications Ozempic and Wegovy, has announced the elimination of 9,000 jobs as it grapples with declining profits due to increasing competition from generic weight loss drugs. This decision comes as discussions heat up in Australia regarding the potential inclusion of such weight loss medications on the Pharmaceutical Benefits Scheme (PBS).
Based in Denmark, Novo Nordisk is facing intensified rivalry, particularly from US-based Eli Lilly, as both companies develop new medications aimed at enhancing weight loss and diabetes management. Since the launch of Ozempic in 2017, there has been a surge in competition in the obesity treatment market.
The company anticipates that the job cuts will result in annual savings of approximately $1.25 billion by the end of the following year, with the intention of reallocating these funds towards growth initiatives in diabetes and obesity, particularly in research and development.
Ozempic, a form of semaglutide, is currently available on the PBS as a treatment for type 2 diabetes but has gained popularity in recent years as a weight loss solution, partly driven by social media trends and celebrity endorsements. Wegovy, alongside Mounjaro, represents the new generation of drugs approved by Australia’s Therapeutic Goods Administration (TGA) specifically for weight loss.
Recently, there has been a concerted effort from patients, healthcare professionals, and obesity advocacy groups to lobby for the inclusion of Ozempic and Wegovy in the PBS for chronic weight management. Advocates argue that this would significantly enhance access for individuals struggling with obesity, reducing costs from hundreds of dollars to around $30 for a monthly prescription.
Despite previous rejections of Wegovy for PBS subsidy, there are indications that authorities are paying attention to the growing demand for availability of weight loss drugs. Federal Health Minister Mark Butler has reached out to the Pharmaceutical Benefits Advisory Committee (PBAC) to explore ways to ensure equitable access to medications for obesity treatment.
In summary, as Novo Nordisk navigates the challenges posed by fierce competition in the weight loss sector and contemplates significant job cuts, the Australian debate surrounding the accessibility of weight loss medications continues to evolve, with advocates pushing for greater affordability and availability on the PBS.