The owner of Ozempic is increasingly struggling because a rival with a factory in Cork is “eating their lunch”, an economist has said.
The Danish weight loss drug has taken the pharmaceutical world by storm in recent years, with millions of people shelling out thousands for prescriptions of Ozempic.
After the drug hit the shelves, the share price of Ozempic’s owner, Novo Nordisk, surged as investors rushed to cash in on one of the 21st century’s most exciting medical breakthroughs.
At their peak last year, one share in Novo Nordisk cost $142; now, they can be bought for under $50.
So, what’s happened to the company?
On Newstalk Daily, economist and Taking Stock presenter Susan Hayes Culleton explained how the company became a victim of its own success.
“Such was the gold rush that Novo Nordisk couldn’t keep up,” she said.
“It just couldn’t keep up with supply; therefore, the FDA in the US said, ‘You know what? We’re going to allow other companies to make compounding versions of this drug.
“That is now Novo Nordisk’s biggest challenge.”
A woman's hands holding Ozempic pens. Picture by: Alamy.com.Keen to take advantage of the demand for weight loss drugs, other companies came up with their own.
Today, there are an estimated one million people are taking what Novo Nordisk refers to as ‘knock off’ or copycat drugs.
“That is, if you’ll excuse the pun, ‘eating their lunch’,” Ms Hayes Culleton said.
“As a result, Novo Nordisk is now really struggling; it’s not just competing against Eli Lilly or the other competitors who are coming up with branded drugs - it’s the knock off ones as well.
“That’s a really big challenge for them.”
Ozempic's competition
One of Ozempic’s most well-known competitors is Mounjaro, which is manufactured by the company Eli Lilly.
Like a great many pharmaceutical companies, it has a factory in Ireland.
“The active ingredient for Mounjaro is made in Kinsale,” Ms Hayes Culleton continued.
“Very, very significantly, there’s been a lot of new investment into Eli Lilly in Cork and now they’re also expanding into Limerick.
“Naturally enough, with all that’s going on in the US as well, they’re currently investing there too.
“But this is a big, big area.”
Congratulations to @EliLillyandCo
on expansion at Kinsale plant. A hugely significant investment of €726m. Tremendous facility and asset to Cork with brilliant staff. pic.twitter.com/tUjjiwq5Gt— Jerry Buttimer TD (@jerrybuttimer) September 12, 2024
Last week, the European Union and United States signed a trade agreement that will see tariffs of 15% imposed on Irish pharmaceutical goods imported into America.
In 2024, Irish pharmaceuticals to the US were worth €44 billion and industry insiders now expect that figure to fall as American consumers look for cheaper alternatives.
US President Donald Trump and European Commission President Ursula von der Leyen shake hands after reaching a trade deal at the Trump Turnberry golf course in Turnberry, Scotland. Picture by: AP Photo/Jacquelyn Martin.“We always say that nine out of the 10 largest pharmaceutical and biotechnology companies are here,” Ms Hayes Culleton said.
“It’s a good thing that they’re here; it’s a really good thing.
“Then we also hear about the fact that we have three companies paying a massive percentage of corporation tax and we’re highly reliant on a small number of companies.
“I think the lesson here is how we’re managing our budget; if you’re planning current spending and you’re planning that against the revenues of one or two or three specific companies, that’s where the vulnerability is.”
Budget 2026 will most likely be announced in October.
Main image: An Ozempic injection. Picture by: Alamy.com.
