The News
The Danish Medicines Agency announced new restrictions to limit who gets access to a class of diabetes drugs known as GLP-1 antagonists and by their main ingredient, semaglutide. Regulators plan to reduce subsidies and only pay for the drugs if patients can’t be treated with cheaper alternative medications.
According to the agency, half of type-2 diabetes patients were prescribed GLP-1 drugs without trying other cheaper alternatives in 2023. The most famous GLP-1 drug, Ozempic, is made in Denmark by pharmaceutical giant Novo Nordisk and it has transformed both the country’s economy and the company’s balance sheet. With a market value now surpassing that of Denmark, Novo Nordisk recently cut Ozempic prices by almost one-third in Denmark, from $188 to $125 per month, after public reimbursement negotiations.
But the demand for semaglutide drugs — and especially Ozempic — has surged in Denmark and around the world due to their apparent weight-loss side effects, raising concerns among regulators about medicine shortages and unintended consequences of such widespread use. Doctors in the United Kingdom have also been instructed to stop prescribing the drug to non-diabetics and prioritize alternatives, while American lawmakers are also becoming increasingly alarmed by the drugs’ prices.
SIGNALS
Danish pharmaceutical giant Novo Nordisk could become too big to fail
Novo Nordisk’s market value — $570 billion — is larger than Denmark’s economy, and Denmark is along for the ride: It’s economy has grown almost 2% because of it, Bloomberg reported. Without it, the Danish economy “would have stagnated.” Danish pension funds tied to the industry have seen record returns, while cities with drug manufacturing plants received government funding for higher education and better transportation infrastructure. But there’s growing concern Novo Nordisk’s dominance could repeat recent Scandinavian history, whereby a single company’s collapse — Nokia — almost crippled Finland’s economy. “If Novo continues to be most of the growth in the Danish economy, then there’s a problem when the profit stream from Novo shrinks,” a politics professor at the University of Virginia told Bloomberg.
The growing influence of pharmaceuticals on policy courts criticism
Novo Nordisk’s economic clout has given it priority access to Danish policymakers. This is especially true for education and immigration. Its influence “is highly unusual in Denmark, which prides itself on its egalitarianism.” Many individual doctors in Denmark also have ties to Novo Nordisk, The Copenhagen Post reported, which could influence prescribing decisions. A researcher at Copenhagen Business School noted elected officials might fail to ask Novo Nordisk “delicate questions” or challenge beneficial policies, including the allocation of tax-free non-profit funding toward research that benefits the pharmaceutical giant.
Ozempic’s fame risks leaving the people it was made for behind
Ozempic and similar drugs’ weight-loss benefits have made it hard for people with diabetes and related health issues to access what some see as a life-saving medication. In 2023, shortages left pharmacists scrambling for supplies throughout North America, and some groups are more affected than others: In Canada, for example, indigenous populations with high rates of diabetes were largely left without access to the drugs.
Meanwhile, the US Federal Trade Commission has argued that Novo Nordisk is using patents to keep prices high, and the Senate has launched an investigation into Novo Nordisk’s drug pricing, which Sen. Bernie Sanders said “have the potential to bankrupt Medicare, Medicaid, and our entire health care system.”