Novo Nordisk’s Wegovy Weight-Loss Drug Faces Approval Hurdles from Medicare as Heart Disease Treatment, Says Deutsche Bank
Novo Nordisk’s groundbreaking weight-loss drug, Wegovy, is facing potential obstacles in securing approval from Medicare as a heart disease treatment, according to analysts at Deutsche Bank. While executives at the Danish pharmaceutical group highlighted Wegovy’s significant impact on reducing the risk of heart-related complications in overweight and obese patients with pre-existing heart disease, Deutsche Bank analysts are skeptical about Medicare covering the drug for cardiovascular purposes.
In their note to clients, the analysts expressed doubts about Medicare’s readiness to embrace Wegovy as a cardiovascular treatment citing concerns about poor adoption rates for other cardioprotective treatments among cardiologists. This skepticism has raised concerns about the future of the GLP-1 space—a class of type 2 diabetes drugs that not only reduce blood sugar levels but also promote weight loss.
The news of Medicare’s potential reluctance to cover Wegovy comes as Novo Nordisk presented additional data from its Select trial at the American Heart Association’s annual scientific meeting and published it in the New England Journal of Medicine. These findings confirmed previous observations that patients treated with Wegovy lost an average of 15% of their weight and had a 20% lower chance of experiencing cardiovascular events compared to those who received a placebo.
When the preliminary data from the trial was released in August, Novo Nordisk’s stock skyrocketed as investors anticipated wider coverage and adoption of the drug by health systems and insurers. However, the possible roadblock from Medicare has led to a dip in the company’s U.S.-listed shares.
Novo Nordisk has pinned high hopes on Wegovy to strengthen its position in the highly lucrative obesity market, which is projected to be worth over $100 billion annually. The race to unlock this market has seen competitors make significant strides, such as Eli Lilly’s recent approval for its weight-loss treatment, Zepbound, by U.S. drug regulators, and AstraZeneca’s collaboration with China’s Eccogene to develop an oral medicine similar to Wegovy.
The outcome of Medicare’s evaluation will play a crucial role in determining the market potential for Wegovy as a cardiovascular treatment. Novo Nordisk will need to navigate these approval hurdles to tap into the vast potential of the obesity market and maintain its competitive edge in the pharmaceutical industry.
While Novo Nordisk faces uncertainties with Medicare, it remains to be seen how the company will overcome this challenge and the impact it will have on the GLP-1 space and the wider pharmaceutical market.
