The Ozempic Era

What first comes to mind when you think of Ozempic? If you thought of weight loss, you're not alone. Ozempic has become nearly synonymous with losing weight in recent years, so you might be surprised to learn that this is not the drug's intended use. In fact, the FDA has approved it solely for the treatment of type II diabetes. 

So how did a diabetes drug become a household name for weight loss?

The answer will bring us through a plague, a global recession and a desperate company with a secret weapon. While Ozempic may ultimately be replaced by other medications, the effects that it has had on the industry and society will endure.

This is the story of the Ozempic Era, told in three parts.

On Wednesday, March 11, 2020, the World Health Organization announced the start of the COVID-19 pandemic. The lockdowns, travel bans and loss of life that followed created deep scars in the global economy that we are still healing from today. But perhaps no industry was as affected as the pharmaceutical industry.

The global need for a vaccine and effective antiviral medications led many companies to significantly grow their Research and Development (R&D) teams, taking advantage of some of the lowest interest rate loans in history to fund this expansion. This ignited a modern-day space race among biotech and pharmaceutical companies. Heavy competition led to the rapid development and distribution of life-saving vaccines, allowing some companies (like the tiny biotech startup Moderna) to become very rich. 

However, even for the companies that did create profitable therapeutics, a problem rapidly emerged: the end of the pandemic. Falling profits and rising interest rates soon resulted in the biggest wave of industry layoffs since the 2008 financial crisis. With the writing on the wall, many companies began axing their expensive R&D teams to prioritize the production of existing drugs. 

A new sentiment had taken hold of the industry: “Do more with less.”

Important changes were also happening in healthcare. Telehealth appointments increased by more than 8,000% during the first year of the pandemic, and they remain a common option for patients to this day. While this helped to keep healthcare workers safe and increased access to treatments for patients, it also promoted misdiagnoses and overprescribing, as doctors had less information about their patients. 

But a rapidly changing world presents opportunities for the ambitious—or the lucky. 

Enter Novo Nordisk.

The midsize Danish company had truly remarkable timing. Its flagship drug, Ozempic (semaglutide), had been FDA-approved as a diabetes treatment for several years when the pandemic began. But in the middle of 2021, during the peak of the pandemic, semaglutide was approved for weight loss under a new name: Wegovy.

Both Ozempic and Wegovy are Novo Nordisk brand names for the same chemical, semaglutide. However, the two drugs have different doses and approved target outcomes. The clinical trial that resulted in FDA approval showed that Wegovy was more than twice as effective as any other weight-loss drug on the market at that time. 

This approval meant everything.

"The Ozempic Era will define the pharmaceutical and healthcare industries for years to come."

-- Gavin Scheldrup

Ozempic and Wegovy belong to a class of drugs known as GLP-1 agonists that work by mimicking the effects of the body’s natural GLP-1 hormone. GLP-1 triggers insulin release to reduce blood sugar and also blocks the body's ability to raise its blood sugar levels in response. This is what makes these compounds so effective at treating diabetes, a disease characterized by low insulin and high blood sugar. Critically, however, GLP-1 also slows down digestion and increases feelings of fullness after eating, causing patients who take drugs like semaglutide to lose an astonishing amount of weight. 

Wegovy’s approval increased the pool of potential customers exponentially. Obesity, already a long-standing problem in the U.S., had been further exacerbated by the sedentary lifestyles forced upon millions of people during the pandemic.

Yet production difficulties and a reluctance from insurance companies to cover Wegovy throttled its newfound potential. This led to emerging public discussions about using Ozempic, which shares an active ingredient with Wegovy, as an alternative weight loss drug in early 2022. 

But rather than focus all its revenue on marketing Ozempic, as you might expect, Novo Nordisk watched and waited. 

Rising interest rates. Falling profits. Widespread layoffs. The mantra “Do more with less” reverberating across the North Atlantic. So what on Earth kept Novo Nordisk from pouring everything it had into its golden goose, Ozempic? 

Social media. This secret weapon would change the way the pharmaceutical industry works.

This explosion in viewership translated directly to sales. In 2021, Ozempic didn’t even break into the top 20 of the best-selling drugs worldwide. By 2023, it would rise to third place. 

Although Ozempic is only approved for the management of diabetes, its promotion as a weight loss drug on social media has led to millions of people seeking off-label prescriptions (and willing to pay the hefty out-of-pocket price). The rise of telehealth also facilitated this profit-driven overprescription as barriers to treatment were lowered.

While this has been great for Novo Nordisk, which has raked in record profits and seen its stock price soar by over 400% compared to pre-pandemic prices, it has had harmful consequences for the millions of Americans taking Ozempic for diabetes. Demand has far outpaced supply, leading to widespread shortages of the drug. This is expected to ease in the coming years, however, as more GLP-1 drugs are approved and production increases. 

 

The Ozempic Era will define the pharmaceutical and healthcare industries for years to come. Companies will increasingly rely on both social media and telehealth for the marketing of their drugs, especially in the weight-loss space. This will cut costs for companies, leading to a rebound in R&D spending and a boom in new medicines, albeit at the cost of the consumer. 

Additionally, obesity, which can reduce one’s lifespan by up to 14 years, may soon be a thing of the past, assuming GLP-1 agonists become widely covered by insurance companies for weight loss. This will improve the lives of over one hundred million Americans and drastically reduce the financial burden of the disease on our healthcare system. 

However, without the proper safeguards in place, rampant social media and profit-driven overprescription of GLP-1 agonists could cause more harm than good. But by instituting sensible policies, such as a ban on off-label GLP-1 prescriptions and increased fact-checking of social media posts, this could become a golden age of medicine for both producers and patients.

Will the Ozempic Era be remembered as a cautionary tale or hailed as a revolution?

That’s up to us.