Novo Nordisk Faces a Two-Front Assault as CVS Drops Wegovy Exclusivity and Brazil Approves a Cheaper Rival

The Danish drugmaker entered June with headwinds on both sides of the Atlantic — and beyond. CVS Caremark, the largest US pharmacy benefit manager, ended Novo Nordisk’s year-long exclusivity for Wegovy on Monday, while Brazil’s health regulator simultaneously cleared the first domestic copycat of Ozempic. Together, the two moves underscore mounting competitive pressure on the blockbuster GLP-1 franchise.

CVS Caremark has revamped its formulary to place Eli Lilly’s oral Foundayo and injectable Zepbound on equal footing with Wegovy. The change, effective today, strips Wegovy of the privileged status it held under a deal struck a year ago, when Zepbound was excluded from standard plans. Wegovy remains a preferred option, but the sole-source advantage is gone across formularies covering an estimated 25 million to 30 million Americans. CVS expects the broader lineup to shave 10 per cent to 15 per cent off its spending on weight-loss drugs.

Novo Nordisk downplayed the impact. “Wegovy continues to maintain preferred access on CVS Caremark formularies, and nothing changes for existing patients,” said Tom Scales, vice president of market access. He added that both Wegovy and its oral version have strong formulary access across the US market. Still, the shift means Lilly’s products are now listed at all three largest pharmacy benefit managers in the country, a significant win for the Indianapolis-based rival.

The erosion of Novo’s US position comes as a longer-term patent threat materialises in emerging markets. Brazil’s Anvisa has approved Ozivy, a semaglutide analogue from local manufacturer EMS, priced roughly 30 per cent below Ozempic. The drug is the first injectable generic-style competitor for Novo’s diabetes blockbuster in Brazil, where patent protection expired in March. EMS plans to launch within 30 days, beginning production of 350,000 pre-filled pens across three dosages and targeting 1.2 million units sold and more than 500 million reais in revenue in the first year.

Should investors sell immediately? Or is it worth buying Novo Nordisk?

Brazil is not an isolated case. India saw semaglutide generics hit the market in March, prompting Novo to cut prices. Canada has also approved copies. The patent cliff now extends across India, China, Brazil, Turkey, South Africa and Canada — markets that represent a huge swath of the world’s population and future demand for obesity and diabetes treatments. While the US and Europe remain better protected for several more years, the widening gap between premium markets and faster-opening ones threatens the global pricing architecture around semaglutide.

There is a bright spot for Novo in Europe. On 22 May, the European Medicines Agency’s CHMP recommended approval of the Wegovy pill — the first oral GLP-1 therapy for weight management in the EU. The final decision rests with the European Commission, and Novo expects to launch the once-daily 25 mg oral semaglutide in initial markets outside the US during the second half of 2026. In the US, the oral version has already racked up more than 2 million total prescriptions since launch, with 1.3 million written in the first quarter alone, contributing 2.3 billion Danish kroner ($360 million) in quarterly sales.

The financial picture is mixed. Novo’s first-quarter revenue rose 32 per cent at constant currencies, but an adjustment for a one-off benefit from the US 340B pricing programme leaves top-line growth at a contraction of 4 per cent. Higher volumes failed to fully compensate for lower prices, though the obesity franchise still managed a 22 per cent adjusted gain. Adjusted operating profit came in at 32.86 billion kroner, well above the consensus estimate of 28.74 billion kroner. Despite the beat, management’s full-year guidance remains cautious: revenue and adjusted operating profit are now expected to decline 4 per cent to 12 per cent at constant currencies, excluding the 340B effect.

Analysts remain on the fence. Deutsche Bank’s Emmanuel Papadakis rates the stock Neutral with a 290 Danish kroner target, while Jefferies’ Michael Leuchten also holds at Neutral with a 270 kroner target. Of 19 houses covering the stock, 13 carry a Hold or Neutral rating. The seven US-based banks — including Bernstein, Goldman Sachs and Morgan Stanley — average a price target of just 247 kroner and are uniformly cautious, citing pricing pressure in the US and limited visibility beyond CagriSema, whose FDA decision for weight management is expected in the second half of 2026. A phase 3 trial for a higher-dose version is still pending.

Novo Nordisk at a turning point? This analysis reveals what investors need to know now.

Novo’s share price closed at €39.05 on Friday, essentially flat on the day but down 44 per cent from its 52-week high of €70.13 and 13 per cent year-to-date. Over 12 months the stock has lost more than a third of its value. The company is leaning on share buybacks for tactical support: a current tranche running from 6 May 2026 to 1 February 2027 allows repurchases of up to 11.2 billion kroner, part of a total programme of up to 15 billion kroner over 12 months. As of 22 May, Novo had bought 17.05 million B-shares at an average price of 262.22 kroner, spending about 4.47 billion kroner.

Investors will look to two near-term catalysts. On 7 June, Novo presents its R&D pipeline at the ADA Scientific Sessions in New Orleans. On 5 August, first-half results are due. Those events will test whether new data and a disciplined capital return strategy can offset the twin pressures of a US formulary shift and accelerating patent erosion in the world’s fastest-growing pharmaceutical markets.

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