Novo Nordisk Launches Wegovy in Germany Amid Public Insurance Exclusion

Intelligent Finance APP learned that Novo Nordisk (NVO.US) will begin selling its popular weight-loss drug Wegovy in Germany, its third European market, this month. However, the drug remains a self-paid medication, only covered by private health insurance plans, and has not been included in the public health insurance system by the German government. A decades-old law in Germany prohibits public health insurance programs from covering the cost of weight-loss drugs, which may slow down the adoption of such medications across Europe.

A German law that has been in place for decades prohibits public health insurance plans from covering the cost of weight-loss drugs, classifying them alongside treatments for erectile dysfunction or baldness as "lifestyle choices" rather than health necessities. This means that 90% of Germans will not be able to get reimbursement for Wegovy through their health insurance.

Germany has the strictest stance on weight-loss drugs in Europe, even though the proportion of its citizens who are overweight is higher than the EU average. This highlights the challenges faced by Novo Nordisk and its competitors in persuading European governments to cover the costs of obesity medications, which analysts say could slow their adoption across Europe. In the U.S., Wegovy costs $1,350 per month. In Germany, Europe's largest pharmaceutical market, Novo Nordisk has yet to determine the price for Wegovy.

Some doctors believe that Wegovy can help curb a range of weight-related conditions, such as heart disease or joint pain, which themselves are costly to treat.

Member of the German Endocrine Society and medical professor Martin Merkel stated that this drug offers a "very, very good opportunity" for weight loss and the prevention of subsequent diseases. Merkel said, "If we all become slimmer, how many people could avoid knee surgery? Moreover, the effects achieved solely through diet and exercise are limited." However, other researchers, including Duane Mellor, a nutritionist and senior lecturer at Aston University in Birmingham, UK, advocate that a healthier lifestyle should take precedence over prescription drugs.

Novo Nordisk CEO Lars Fruergaard Jorgensen said in an interview on June 24 that Novo Nordisk will launch the drug in Germany at the end of July.

Germany’s health ministry says it has no plans to tweak the law to include weight-loss drugs. A legislator, who asked not to be named, cited concerns about cost pressures on already overstretched healthcare budgets. This legislator said that an expert panel governing reimbursements would review any benefits of the drug beyond just weight loss, which is the usual approval system.

Michael Wirtz, patient representative of the German advocacy group Obesity Help Germany, said that this is a shortsighted approach. Weight-loss drugs can extend life and help people continue working. "It’s not about people needing to be slim and attractive," he said.

Germany is not the only country implementing restrictions. Due to high demand, Denmark's largest private health insurance company will also stop reimbursing the cost of the drug next year. France’s payment plan will only cover treatment for individuals with a Body Mass Index (BMI) of 35 or higher, which is above the minimum threshold set by European regulators when the drug was approved in January 2022. In the UK, initial use of the drug will be administered through hospital specialists and limited to individuals with a BMI over 35; the UK government plans to authorize general practitioners to prescribe the drug after a two-year pilot program.

Many health plans paid for by large companies will cover Wegovy, although insurance plans may require patients to first try a strict diet plan or cheaper medications.

Terence McManus, a fund manager at Swiss Bellevue Asset Management, said: "The difference will be much greater in Europe and other parts of the world." Analysts at Barclays estimate that the global weight-loss drug market will grow from $2.9 billion in 2022 to more than $60 billion by 2030, with about 60% in the United States and around 26% in the EU. Currently, while the EU's statistics office has warned that weight issues are rapidly increasing in most member states, approximately 53% of people across the EU’s 27 member countries are overweight or obese, compared to about 74% in the U.S.

Phil McEwan, CEO of Heor, a health economics consultancy in Cardiff, Wales, pointed out that for most European universal health plans, the surge in drug costs over time is more concerning than the rise in weight-related issues. McEwan said, "In the U.S., there are many more people with morbid obesity. You could say their costs are higher."