What happened
Novo Nordisk (NVO -0.86%) has generally been a popular stock lately, but that sentiment wasn't apparent on Tuesday. The share price of the European pharmaceutical company dipped by 3%, following a report that its most popular product might not be as durable as previously believed. Novo Nordisk's fall wasn't indicative of the market's general direction, as the S&P 500 index inched up by 0.7% on the day.
So what
That morning, in an exclusive report, Reuters wrote that only around one-third of patients prescribed a weight loss drug take it for more than one year. Novo Nordisk has developed and commercialized Ozempic and Wegovy, two brand names for the same drug. The latter is specifically targeted to patients who need to lose weight by medical necessity and has become very popular for that reason.
Citing an analysis of U.S. pharmacy claims from pharmacy benefits manager Prime Therapeutics, Reuters said that its findings reveal that the average first full-year cost of treatment with Wegovy or a similar drug was 59% higher (at $19,657) than being treated by other means.
Wegovy and numerous medications like it are long-term treatments. It's very possible users have unrealistic expectations for these, and get discouraged when they don't experience significant weight loss quickly enough.
Now what
Novo Nordisk is not the only pharmaceutical company selling a weight loss drug, but these days it's arguably the most prominent. It's little wonder that investors traded its shares down on the Reuters report.
The article quoted a company statement pointing out that "obesity requires long-term management."
It added that "broadening coverage is key to ensure that those who need (therapy) can access and afford their medicines."
