Ozempic is a new medication that slows gastric emptying and supports weight loss. It is part of a class of medications called GLP-1 drugs. However, the medications have experienced shortages as demand has skyrocketed. Some independent pharmacies have even stopped stocking them due to low reimbursement rates from pharmacy benefits managers.

1. Novo Nordisk

The Danish pharmaceutical company Novo Nordisk is reaping the rewards of the Ozempic craze. Its net profit more than doubled between 2019 and 2023, and its stock has soared to new heights. It has even eclipsed the nation of Denmark as Europe’s largest company. But while the company’s rise is great news for shareholders, it’s creating problems for patients, who are being offered counterfeit versions of the drug at a fraction of its price.

The flurry of fake Ozempic for Weight Loss cases may be linked to a broader counterfeiting problem that’s plagued the drug industry for years. Criminals can divert or steal drugs from hospitals or other health systems before adding fake labels and packaging, or they can stamp out pills or liquids in their own factories. They can then repackage these products in legitimate pen boxes, or sell them on the black market for a fraction of their real-world cost.

Novo Nordisk’s franchise for semaglutide-based obesity drugs such as Ozempic and Wegovy brought in nearly $19 billion last year. However, the company has also been battling against illegal sales from pharmacies and medical spas that provide prescriptions for its drugs to patients without proper licensing and accreditation. The company has recently filed lawsuits against several medical spas and weight loss clinics for allegedly unfairly competing with or falsely marketing their semaglutide-based products.

Although Ozempic and its rivals are popular among people who want to lose weight, they’re also in high demand by diabetics. That’s partly because the drug’s active ingredient, which reduces hunger and slows the stomach’s emptying, is effective for many people with type 2 diabetes, who often suffer from obesity as well.

The popularity of GLP-1s is fuelling a price war, with U.S. prices significantly higher than those in other countries, according to a KFF report. A one-month supply of Wegovy, for example, costs $936 in the U.S, but only $328 in Sweden or France. And the list price of a month’s supply of Ozempic is almost double that in Sweden and nearly triple that of Eli Lilly’s (LLY.N) newer competitor, Mounjaro, which just entered the market.

2. Eli Lilly

As the popularity of Ozempic and other GLP-1 drugs soar, pharmaceutical giants Novo Nordisk and Eli Lilly have seen their revenue skyrocket. The Danish company makes the diabetes medicines Ozempic and Wegovy, while the Indianapolis-based Lilly has benefited from the boom with its obesity drug Zepbound and diabetes treatment Mounjaro (also known as tirzepatide). Both companies saw third quarter sales skyrocket, catapulting Novo Nordisk to the top spot for Europe’s most valuable pharmaceutical company and boosting Eli Lilly to No. 3 globally.

The growth hasn’t come without challenges. Both companies have been dealing with outsize demand that has put their manufacturing systems under strain. That’s led to shortages for their high-profile GLP-1 medications.

Both companies have ramped up production and gotten their drugs back into supply in recent months, but Lilly’s stock was hit this week after the company missed Wall Street sales estimates. Shares plunged as investors worried the company could slip back into shortage mode again.

In the midst of the shortage, many patients who were prescribed Ozempic or Wegovy for weight loss and diabetes have been forced to seek out telehealth platforms, medical spas, and compounding pharmacies that sell the meds as generics. But the problem is that a generic version of semaglutide, the drug that underlies Ozempic and Wegovy, doesn’t exist yet.

Moreover, the cost of the medications has made some people reluctant to begin taking them. Novo Nordisk lists a wholesale acquisition cost of almost $1,000 per month for Ozempic, which is what patients pay before insurance and rebates kick in. And even if the medications were covered under Medicare, there’s still a big gap in reimbursement coverage for the injectable drugs.

Lilly is working to close that gap with a direct-to-consumer initiative called Lilly ForAll, which was launched this summer. The program will allow eligible patients to use their prescription benefits and health insurance plans to buy Lilly’s prescription medicines directly.

It’s a bold move for a company that makes tens of billions of dollars annually in revenue. The initiative will require significant operational and logistical adjustments for Lilly, which will be moving from its traditional manufacturing model to one centered on distributing its products through a network of third-party providers, including telehealth companies and pharmacy benefit managers.

3. Pfizer

The world’s largest pharmaceutical company has a long and varied portfolio of medicines and vaccines. Despite suffering setbacks in recent years, including an ill-timed withdrawal of sickle cell disease drug Oxybryta, Pfizer still has the potential to deliver on its growth ambitions.

In the weight loss market, Pfizer is aiming to take a bite out of Novo Nordisk and Eli Lilly’s share with an oral version of its incretin GLP-1 agonist drug danuglipron. The drugs are currently administered as weekly injections, but the introduction of a pill could reduce supply constraints and open up the market to patients who don’t like needles.

A pill is also expected to help drive uptake of the medicines, as they are more likely to be covered by insurance. However, unless these drugs are more effective at controlling obesity or the price comes down, they will have to compete with cheaper prescription medicines such as cholesterol-busting Lipitor, which are taken daily and have a much longer shelf life.

Pfizer performs above average in the governance of access, and it is one of the few companies to report a clear definition of substandard and falsified medicine (SF) and a clearly defined process for reporting cases. It has a good track record of reporting SF medicines to national health authorities in countries in scope and follows locally mandated time frames for the investigation and reporting of SF products. The company also demonstrates good responsible promotion practices and discloses outcomes of its access initiatives. It also has a strong track record of providing quality, safe and efficacious medicines to patients in LMICs, with high coverage and availability of its medicines, based on a variety of factors, such as affordability and the presence of suitable healthcare infrastructure. It has a policy to donate unused products in response to expressed need, and monitors the delivery of these donations. It is also the only company that has a structured donation programme for neglected tropical diseases and malaria, and it has published a comprehensive policy on its activities in this area. It reports on the progress of achieving its eradication and control goals, as well as the quality of the donations, in countries in scope.

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