Is China Becoming Novo’s Next Obesity Goldmine?

When considering the potential market for a product like Wegovy in China, several factors come into play that could significantly impact sales. Primarily, the divide between urban and rural areas, as well as the disparity between the wealthy and the less affluent, plays a crucial role.

In China, Wegovy is priced at around 1,400 Danish kroner per month. According to Philip Róin, this price may not pose a challenge for individuals living in major cities like Shanghai, where he resides. However, it is entirely unaffordable for a significant portion of the rural population.

Furthermore, as it stands, Wegovy is not integrated into the public healthcare system in China. This means that Chinese consumers would have to pay out of pocket for the product and also visit a doctor to obtain a prescription. Again, there is a stark contrast between urban and rural access to healthcare services.

Philip Róin points out, “There are virtually no general practitioners in rural areas of China. So, there’s no one telling you that you need to lose those 30-40 kilos.”

Given the limited market potential for Wegovy in China, one might question why the product was launched in the country instead of focusing on markets globally with higher demand and revenue potential.

Casper Schrøder and Philip Róin emphasize the importance of strategic positioning in this decision.

While Novo has been present in the Chinese market for 30 years, primarily with insulin products, staying ahead of the curve is crucial for future market penetration with upcoming pharmaceuticals.

Casper Schrøder notes, “It’s about being prepared for what will happen in five or ten years. When the weight loss drug reaches the next generations, you need to have been present. Otherwise, you will lag behind competitors.”

Philip Róin echoes this sentiment from Shanghai, stating, “The challenge in China is that if you don’t enter quickly and establish your presence in the market with your own product, there are ten Chinese copycats ready to step in.”

Listen to the full analysis in DR’s business podcast “Sorte tal” where we also discuss the economic turmoil in Germany with Lykke Friis.

Navigating the complexities of the Chinese market presents unique challenges for pharmaceutical companies like Novo Nordisk. While the potential for growth exists, factors such as pricing, healthcare access, and competition from local players must be carefully considered to succeed in this dynamic environment.