Medicare coverage provides opportunity for 15 million patients

Novo Nordisk CEO Mike Doostdar said Wednesday that the company aims to attract about 15 million new patients, at least initially, when Medicare begins covering obesity treatments for the first time later this year.

Medicare covers about 67 million Americans, but “when you look at our products and the target group specifically, I think about 15 million people would be a good number to target,” he told CNBC in an interview.

Medicare is set to begin covering obesity drugs for the first time later this year under historic “most favored nation” drug pricing deals struck by Novo and its main competitor. Eli Lilly He struck out with President Donald Trump in November.

Health experts say the long-awaited coverage could expand the drug market and incentivize more private insurers to cover them. Some experts estimate that 20 million to 30 million Medicare patients suffer from obesity and related conditions.

Medicare coverage, along with the launch of Novo’s new obesity pill and other factors, should help the company gradually increase prescription volumes and offset lower prices in the U.S. after this deal with Trump, Dostdar said.

But he said he doesn’t expect Medicare access to obesity treatments to open up overnight.

“Now, it would be great if we could find a way to get there very, very quickly. But I think that would be a little naive,” Dostdar said, noting the slow adoption seen among eligible patients with commercial insurance.

It’s a slightly more conservative tone on the initial impact of Medicare coverage than Lilly, which cited such coverage as a major tailwind to its guidance this year. Last week, Lilly said it expects Medicare coverage to be available online by July.

Meanwhile, Doostdar said Novo is in the midst of negotiations with the government about “exactly what month, what week it will open.”

Novo is under pressure to regain market share in the booming GLP-1 space from Lilly and smaller and cheaper imitators. Last week, Lilly said its share of the obesity and diabetes drug market in the United States rose to 60.5% in the fourth quarter, while Novo’s share reached 39.1%.

Novo also highlighted a gap in the “share of preference” for weight loss treatment Wegovy versus competing injections from Lilly. In the United States, Novo estimates that 7 to 8 patients out of 10 go to Lilly.

When asked how Novo plans to close this gap, Doostdar said one way to do so is to “do better on the grain.” The company’s Wegovy pill has a head start over Lilly’s upcoming oral drug, Orforglipron, which is expected to receive FDA approval during the second quarter.

Novo pills are slightly more effective than Lilly pills based on separate clinical trials, showing a 16.6% weight loss compared to 12.4% with oral Lilly, Dostdar said.

“If you used those two numbers, you would have a 40% difference between the effectiveness of these pills,” he said. “I think this will be a very major selling point for the cereal.”

But Doostdar also pointed to the upcoming approval and launch of a higher dose — 7.2 milligrams — of Wegovy that could help win market share for Lilly’s obesity treatment Zepbound.

This higher dose helps patients lose about 21% of their weight, which is “pretty much on par” with the highest dose of Zepbound, he said. Zepbound’s high efficacy has been a major factor in turning more patients and prescribers away from choosing Wegovy, which has shown an average of approximately 15% weight loss in clinical trials.

“When it comes to the market, my idea, my wish, and my hope is that people will realize, OK, now we have two products that are equally effective,” he said.