Novo Will Limit Wegovy’s China Launch to Avoid Global Disruption

(Bloomberg) -- Novo Nordisk A/S will restrict initial sales of its blockbuster obesity treatment Wegovy in China, as the drugmaker grapples with how to control access to the medicine for the world’s biggest population of obese people.

Novo will face a delicate balancing act in China as it attempts to meet pent-up demand and take advantage of what may only be a brief head start on arch-rival Eli Lilly & Co.

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The company plans to launch Wegovy in China soon, with access restricted so that the influx of Chinese patients doesn’t deplete supply for the rest of the world, said Maziar Mike Doustdar, the Danish drugmaker’s chief of international operations. Novo also wants to ensure that people who start taking the drug can keep filling their prescriptions without concern that supplies will later run out.

“It’s no secret that the demand is enormously larger than the current supply,” Doustdar said in an interview on Thursday. “We cannot completely open this up on day one to all centers and all doctors and then have a situation where let’s say on Monday we launch the product and by Wednesday or Thursday there’s not enough for those who started it back on Monday.”

Chinese authorities cleared Wegovy on Tuesday, providing a new weight loss option to a market where many have been using Novo’s Ozempic to slim down, though that drug is only approved for diabetes.

As rapid urbanization drives a spike in obesity rates, the world’s second-most populous country is destined to be a hotly contested arena for drugmakers both foreign and local. China’s market for GLP-1 drugs like Wegovy may reach 40 billion yuan ($5.5 billion) by 2030, most of it for obesity, according to HSBC.

The Danish drugmaker won’t be alone in China for long. Its patent on Wegovy’s main ingredient, semaglutide, is set to expire in 2026, and two Chinese drugmakers, Hangzhou Jiuyuan Gene Engineering Co. and Livzon Pharmaceutical Group Inc., have already filed applications for generic copies.

Global Demand

Lilly’s obesity blockbuster is also under regulatory review in China, and a homegrown weight-loss drug co-developed by Lilly and Chinese drugmaker Innovent Biologics Inc. is expected to hit the market next year.

Novo has struggled to keep up with global demand for both Wegovy and Ozempic, the diabetes drug with same active ingredient. Wegovy is launched in more than 10 countries around the world.

The company makes all of the drug ingredient, semaglutide, itself in factories in Denmark and North Carolina. That will continue as Novo launches in China, Doustdar said. But the drugmaker will seek to have the final stages of production — putting the drug into injector pens and preparing them for consumers — in China. In March, it announced a 4 billion yuan expansion of its factory in Tianjin, near the Chinese capital Beijing.

Unlike Ozempic, which China’s national health insurance covers for diabetes, chances are slim for Wegovy to be reimbursed by public insurance. China’s National Healthcare Security Administration said in April that no matter how “miraculous” the effects are, weight-loss drugs can not be covered by medical insurance.

That means Wegovy will probably have to target people who can pay out-of-pocket, but it also allows the drugmaker to set its own price without needing to negotiate with the public insurer. Novo declined to disclose its plans for Wegovy pricing.

Staying off China’s list of reimbursable drugs also means patients are more likely to buy Wegovy via e-commerce channels, which often require little interaction with a doctor. Novo will need to make sure to pick the right partners to sell the drug online, according to Doustdar. They should be able to identify in their systems who’s a repeat prescriber, for example, the executive said.

Ozempic is already sold via major Chinese e-commerce platforms including JD.com, Alibaba Group Holding Ltd.’s Tmall and Ele.me, and getting the drug can be a matter of only a few taps on a smartphone app.

Liu Shi, a Chinese woman in her 20s, said she took Ozempic for a month in order to get down to her ideal weight of 50 kilograms (110 pounds). She bought the injection from a popular grocery and food-delivery app called Meituan, which is backed by Chinese tech giant Tencent Holdings Ltd.

Others may get the once-weekly injection from less legitimate channels. When Ozempic came to the Chinese market, Richard Fu, who once worked in the pharmaceutical industry, pulled some strings and got himself doses from industry insiders. He pointed out that buying online would leave a false medical record of diabetes diagnosis, which may cause issues if one wants to buy commercial insurance going forward.

Such off-label use will also be a competition factor for Novo. Lilly’s tirzepatide — sold in the US as Mounjaro for diabetes and Zepbound for obesity — won approval to treat diabetes in China last month, likely to trigger similar off-label use for obesity.

Novo will seek to compete by showing more benefits for its drug in patient trials, and will be competitive on price, Doustdar said. The market is big enough for many players, he said.

The latest national survey conducted by China’s National Health Commission showed more than half of the adult population was either overweight or obese in the nation of 1.4 billion people. China adopted a body mass index of 28 to define obesity in the survey, compared with a global threshold of 30.

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