Novo Nordisk Battles Legal Setback and Pill Demand Slowdown as European Expansion Looms

Novo Nordisk’s shares took a 3% hit on Monday, sliding to roughly 290 Danish kroner—equivalent to €38.02—as the Danish pharma giant confronted a trio of headwinds. The stock now trades nearly 45% below its 52-week peak set last June, reflecting a bruising stretch that pitches courtroom losses against competitive pressure and a flagging script count for its oral Wegovy tablet.

Adding to the strain, the US Supreme Court on Monday dismissed appeals from Novo Nordisk and five other drugmakers challenging the Medicare price-negotiation programme established under the 2022 Inflation Reduction Act. The ruling cements the government’s authority to directly haggle over prices for top-selling medicines, a mechanism the Biden-era law says will save Medicare more than $20bn annually on 40 drugs. Negotiations are already under way for another 15 products, including weight-loss and cancer treatments, meaning the state-led pricing squeeze is now a permanent fixture for Novo Nordisk.

The legal blow coincided with fresh evidence of softening demand for the oral Wegovy pill. IQVIA data analysed by Barclays show prescriptions for the tablet fell 4.4% in the week to 8 May, a dip that Citi’s own tracking corroborates. Since its US launch in January, Novo Nordisk has signed up more than two million patients, but the pace has clearly decelerated. The main culprit is Eli Lilly’s Foundayo, which entered the US market in April as a direct rival. Lilly plans to unleash TV advertising campaigns from the third quarter, raising the competitive temperature in what had been Novo Nordisk’s territory.

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The quarterly results for the first quarter of 2026 offered little comfort. Adjusted net revenue dropped 10% to 70.1bn Danish kroner, while adjusted earnings per share fell 3% to 6.63 kroner. Management now forecasts a full-year decline of between 4% and 12% in both currency-adjusted revenue and operating profit—a slight narrowing of the previous guidance range of minus 5% to 13%, but still a stark reversal from the growth story investors had grown used to.

Against this punishing backdrop, Novo Nordisk is doubling down on international expansion as its next growth lever. Emil Kongshøj Larsen, the company’s vice president for international business, has outlined plans for a major rollout of the oral Wegovy formulation outside the US, with first launches as early as this year subject to European Medicines Agency approval. Analysts see Britain, Germany and Denmark as the initial beachheads. To meet anticipated demand, the group is ploughing half a billion dollars into a new production facility in Ireland.

The US market, for its part, remains a tale of two rivals. Novo Nordisk’s oral Wegovy pill had been generating more than 200,000 weekly prescriptions by mid-April, dwarfing Eli Lilly’s Foundayo, which logged just 62,000 per week. The two products offer different trade-offs: the Wegovy pill requires a strict empty stomach, while Foundayo can be taken without such restrictions. On tolerability, however, Novo Nordisk points to clinical data showing significantly fewer gastrointestinal side effects and a 14-fold lower discontinuation rate among patients.

Beyond the oral Wegovy, the pipeline holds several potential saviours: CagriSema, Amycretin and UBT251, which is in Phase 2 trials in China. Whether any of these candidates can plug the revenue gap in the next 12 to 18 months remains an open question. For now, the immediate test is whether the EMA greenlights the European launch this year, a decision that would trigger the company’s most ambitious commercial push in a generation—and one that must succeed against a gale of legal, competitive and financial headwinds.

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