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\t\tNovo Nordisk’s control of the weight-loss sector is under challenge\t<\/p>\n
The NHS must keep its medicines clawback tax low and predictable or else risk disrupting the rollout of weight-loss drugs in the UK, Novo Nordisk\u2019s UK chief has said.\u00a0<\/p>\n
Sebnem Avsar Tuna, general manager of UK operations for the Ozempic and Wegovy maker, told City AM <\/strong>the Government must keep in place the current ceiling on the rate charged to pharma companies.<\/p>\n The clawback, or rebate, scheme was at the centre of intense criticism of the UK\u2019s commercial environment for pharmaceutical companies, which saw giants like Merck and Astrazeneca scrap<\/a> expansion plans.<\/p>\n The rebate \u2013 called the voluntary scheme for branded medicines, pricing, access and growth (Vpag) \u2013 requires drug companies to pay the NHS a portion of its revenue from the sale of branded medicines if the amount used by the health service is higher than an agreed rate.<\/p>\n In December, the government struck a deal<\/a> to reduce the rate from 22.5 to 14.5 per cent for this year, in a bid to stem the flow of pharma giants opting to expand in the US instead.<\/p>\n During talks over the rate, health secretary Wes Streeting threatened to walk away from negotiations if pharma chiefs refused his \u201cgenerous offer\u201d, according to the Financial Times<\/a>.<\/p>\n Tuna, whose Novo Nordisk kickstarted the weight-loss boom but has been challenged by a number of competitors in recent years, said this deal is crucial to the firm\u2019s continued expansion in the UK.<\/p>\n She told City AM<\/strong>: \u201cThis has been a continuous conversation together with the industry, the ABPI (Association of the British Pharmaceutical Industry), the government and relevant stakeholders last year, where I believe at least now we have come to a conclusion of making it more stable, defining a ceiling.<\/p>\n \u201c[This] is going to give more predictability back to the pharma companies in terms of making not only short-term but mid- to long-term plans accordingly.\u201d<\/p>\n Tuna echoed figures in the industry who had insisted<\/a> pharma companies would not be able to act with certainty in the UK while the rebate remained at its former level.\u00a0<\/p>\n She said: \u201cWhen you make your plans \u2013 budgetary plans, strategy \u2013 taking into consideration one rebate, and then another morning you wake up and see a completely different one, especially on the higher side, of course it\u2019s not good.<\/p>\n \u201cFor companies like ourselves, in terms of public health-related planning or rollouts in general, predictability is definitely important. Having a better understanding of what percentage we are talking about for next year or the year after is a very good thing to happen.\u201d<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\tOverseas Doctors Power the NHS, But Uncertainty Grows<\/a><\/p>\n \tNovo fights to retain upper hand in weight-loss race<\/p>\n Having notched a $650bn valuation two years ago to become Europe\u2019s biggest company, the Danish firm has seen its share price tumble in recent years as its competitors \u2013 most significantly the Mounjaro manufacturer Eli Lilly \u2013 caught up.<\/p>\n The firm announced 9,000 job cuts in September, followed by the exit of its chairman and six board members in October.\u00a0<\/p>\n Paul Major, an investment manager at Bellevue Asset Management, told The Times<\/a> in December he sold his Novo Nordisk shares because of concerns over its long-term prospects.<\/p>\n<\/p>\n Dan Coatsworth, head of markets at AJ Bell, told City AM<\/strong> the scale of opportunity for weight-loss drugs is \u201cmassive\u201d, with room for multiple big players \u201cin theory\u201d.\u00a0<\/p>\n \u201cIn time, it\u2019s possible that we see prices come down which makes the treatment affordable to a much bigger group of people. It might also result in certain people happy to try any weight-loss product, even the less effective ones, if the price is right.\u00a0<\/p>\n \u201cSuch events could turn weight-loss drugs into a volume game for companies like Novo-Nordisk \u2013 sell as many as possible, even if margins aren\u2019t as high as they currently are.\u201d<\/p>\n Coatsworth warned the rebate deal may not be the last saga in the NHS\u2019 tense relationship with pharma giants. He said: \u201cWe\u2019ve already seen the likes of AstraZeneca drop UK investment plans on the implications that the government didn\u2019t provide enough support, and it\u2019s fair to say that risk applies to all players in the industry.\u201d<\/p>\n But Tuna struck a confident tone as she affirmed that this competition will push Novo \u2013 which hopes to roll out its weight-loss pill<\/a> in the UK this year \u2013 to expand further and faster.<\/p>\n \u201cThere is fierce competition out there. I think it\u2019s visible to everyone. But I think it\u2019s also good, and we welcome the competition because it drives more research and more development, to get the best outcomes faster,\u201d she said.\u00a0<\/p>\n Tuna defended Novo\u2019s continued investment in the UK market, which includes a partnership with the University of Oxford and an AI research hub in King\u2019s Cross.\u00a0<\/p>\n She said: \u201cThere is such an unmet need across the whole world, and definitely in the UK. [\u2026] This is a public health issue. We want to be part of the solution rather than being seen as the problem itself.\u201d<\/p>\n NHS England and the Department of Health and Social Care have been contacted for comment.<\/p>\n \t\t\t\t\tRead more<\/p>\n