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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Joining us now and please to say we have Lars

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Speaker 2: Frogard Jorgensen. He is the CEO of Novo Nordisks out

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Speaker 2: with earnings today and obviously a lot of questions, a

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Speaker 2: lot of focus on production and on capacity. It seems

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Speaker 2: like you still have the very happy problem of having

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Speaker 2: more demand than you do supply, something that you expect

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Speaker 2: to see gradual improvement over the next year or so.

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Speaker 2: But if you can give us a little bit more

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Speaker 2: color on when we're expected to see that improvement, expected

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Speaker 2: to see more supply arrive in the US, that would

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Speaker 2: be very helpful.

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Speaker 3: Yeah, thanks for having me back, and you are right

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Speaker 3: this is a key topic for us, and I would

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Speaker 3: actually point to some clear evidence. We saw that when

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Speaker 3: we started the quarter we were down to some five

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Speaker 3: six thousand new patient start on a weekly basis.

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Speaker 4: That has now.

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Speaker 3: Increased to some twenty seven thousand new starts on a

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Speaker 3: weekly basis.

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Speaker 4: So that's really the.

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Speaker 3: Proof point that we are scaling up the number of

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Speaker 3: products we bring to the market. And we have a

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Speaker 3: policy of making sure that when we bring patients onto

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Speaker 3: treatment they can also stay on treatment, so we can

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Speaker 3: assume that we also have the higher doses available now,

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Speaker 3: so we can actually tight trade patients up to that.

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Speaker 3: And this is what has happened save through the first

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Speaker 3: say four months of the year, so to say. And

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Speaker 3: we will gradually be expanding manufacturing throughout the year and

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Speaker 3: also into coming years. So we are committed to bring

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Speaker 3: our innovation to more and more patients on a great basis.

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Speaker 2: Let's talk about manufacturing a little bit more. Obviously, earlier

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Speaker 2: this year you purchased catally Net to help boost your

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Speaker 2: efforts there. You also said that you're doubling your investment

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Speaker 2: in manufacturing capacity this year to about six point four

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Speaker 2: billion dollars. And I'm curious where that money will be spent.

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Speaker 2: Whether we're talking about the final phil finished stage or

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Speaker 2: actually boosting capacity manufacturing of your active ingredient. Where do

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Speaker 2: you see the biggest constraints right now?

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Speaker 4: We are doing both.

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Speaker 3: So over the past few years we have made a

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Speaker 3: couple of commitments to expand our API capacity. That's primarily

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Speaker 3: done in our big sites here in Denmark. And then

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Speaker 3: to complement that, we are adding bill finished capacity. We

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Speaker 3: do that on all our existing sides, but we also

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Speaker 3: do that will contract manufacturers and it's in this context

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Speaker 3: our acquisition of three fill finished sides from new holdings

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Speaker 3: who are then acquiring Catalant is an important transaction for us,

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Speaker 3: and that's really part of this all ramp of capacity,

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Speaker 3: and we really excited about what this brings of opportunity

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Speaker 3: to treat millions and more patients in the coming years.

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Speaker 1: With that ramp up in capacity, there's an added cost

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Speaker 1: that comes with that, Lars, what's the balance between those

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Speaker 1: added costs and your own pricing power longer term?

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Speaker 3: Well, I see it like this that when we ramb

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Speaker 3: up capacity, we actually bring scale into manufacturing. That's an

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Speaker 3: opportunity to bring down a unit cost and also over

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Speaker 3: time serve many more patients. And typically when you add

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Speaker 3: more and more patients, you also add patients that come

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Speaker 3: at a lower, say cost, because different channels have different

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Speaker 3: price points. So I think it's a great opportunity of

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Speaker 3: us to bring innovation to more and more patients, the

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Speaker 3: benefit to the healthcare systems of treating those patients, but

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Speaker 3: obviously also a continued growth opportunity for non natic and

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Speaker 3: I think that's actually a wonderful model where we can

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Speaker 3: benefit society then video patients, but also bring growth to

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Speaker 3: our company.

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Speaker 1: What are your unit costs right now for Exampic and Mogovi.

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Speaker 4: Well, we don't disclose those.

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Speaker 3: You can see our say post of good sold in

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Speaker 3: our accounts. There's been some talks in the market about

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Speaker 3: what the cost of producing our products. I think those

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Speaker 3: numbers are not correct. Those are paths reflecting some of

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Speaker 3: the direct input costs, but they do not reflect the

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Speaker 3: massive investments you need to do into both running quality

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Speaker 3: systems and actually building these fatilities that's needed. So it's

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Speaker 3: massive billions of dollars that we invest into capacity to

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Speaker 3: bring our invasion to patients.

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Speaker 4: I understand that.

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Speaker 1: I mean, I'm sure you're aware of that Yale study

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Speaker 1: that seemed to suggest that you can produce this profitably

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Speaker 1: profitably on a unit basis at around five dollars, which

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Speaker 1: is still a pretty big differential elease for what those

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Speaker 1: drugs cost here in the US upwards of a thousand

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Speaker 1: dollars a month here, even if you take into account

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Speaker 1: the billions and research that you had to do to

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Speaker 1: get these drugs to market, is that gap maybe a

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Speaker 1: little bit still too wide.

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Speaker 3: I'm actually quite disturbed by a number like that because

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Speaker 3: I don't think that's a true representation of what it

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Speaker 3: costs to produce medicine. I think and thinks it brings

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Speaker 3: false hopes to patients that anyone can produce at that price.

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Speaker 3: And if the interesting I actually think is actually creating

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Speaker 3: less intentives to actually start making production if that's what

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Speaker 3: people believe it will cost. So it costs much more

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Speaker 3: than that to produce products of say a high quality

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Speaker 3: that's living up to the requirements from FDA and all regulators.

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Speaker 4: So I don't really subscribe to that number, to be honest.

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Speaker 2: So some quibbles, of course, with the Yale study. You

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Speaker 2: also have the likes of US Senator Bernie Sanders opening

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Speaker 2: an investigation into the pricing of ozembic and WAYGOV basically

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Speaker 2: saying that insurres are going to have to double their

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Speaker 2: premiums in order to cover these drugs. And let's talk

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Speaker 2: a little bit more about pricing and your strategy here,

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Speaker 2: given the debate the conversation that of course is going

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Speaker 2: on around both ozembic and WAYGOVY, what are the steps,

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Speaker 2: what are the decision points that you're making when it

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Speaker 2: comes actually lowering the list price.

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Speaker 3: So let's be honest and talk about what is the

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Speaker 3: real price, and you can see in our owning release

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Speaker 3: for this quarter that we are actually seeing lower realized

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Speaker 3: price and coming to no Nordice. And if you look

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Speaker 3: over the purit since we launched Osimpic, we actually have

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Speaker 3: a price point to no Noidice that some forty percent

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Speaker 3: lower than when we launched the product. So that a

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Speaker 3: lot of talk about the list price in the yeers,

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Speaker 3: but the way the mark works is that there's a

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Speaker 3: gross to net model. You launch at a list price,

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Speaker 3: you give some rebates, typically enhance those rebates over the years.

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Speaker 3: So it's a bit again misunderstood to just talk about

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Speaker 3: price of medicine looking at the list price. And if

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Speaker 3: we as a company just reduce the list price, that

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Speaker 3: would actually not benefit patients because in many cases that

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Speaker 3: would lead to us having less access on the formularies

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Speaker 3: and our product would be available for fewer patients. So

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Speaker 3: it's a net price we compete on. And if you

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Speaker 3: look at our price over the years we've been on

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Speaker 3: the market in the US since twenty eighteen, that's actually gone

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Speaker 3: down by some forty percent.

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Speaker 2: So okay, So you've also said, of course, that WAYGOV

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Speaker 2: when it comes to the lower realized price. It's expected

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Speaker 2: to persist throughout the year. Those prices coming down, and

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Speaker 2: I want to talk a little bit about the forces

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Speaker 2: behind that driving those prices down. Is that going to

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Speaker 2: be due to competitive pressure in your view, or just

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Speaker 2: expanding access more supply.

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Speaker 4: I think it's a combination.

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Speaker 3: We typically see that when you launch in the US,

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Speaker 3: you realize the highest price year or year you give

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Speaker 3: rebate concessions, and of course that rebate concession is also

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Speaker 3: a function of competition. And now we're seeing more competition

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Speaker 3: than the one space, and that that also has an

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Speaker 3: impact on price. So I actually think this is a

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Speaker 3: good development because there's a big need for our innovation.

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Speaker 3: We see more and more patients and prescribers wanted to

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Speaker 3: use our products. Enhance rebates, we realize a lower knit price,

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Speaker 3: and I actually think that's a model that works both

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Speaker 3: for the payer and for us because the volume drives

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Speaker 3: our volume.

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Speaker 4: Growth or our revenue growth.

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Speaker 3: Despite the fact that we could listen less far medicines

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Speaker 3: on a produce and per patient unit measurement.

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Speaker 1: Lauris I am curious here if we look a little

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Speaker 1: bit more long term and based on what we know

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Speaker 1: about the science of these glp ones. There's been a

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Speaker 1: lot of discussion as to whether these are kind of

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Speaker 1: quote unquote forever drugs that once you start taking them,

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Speaker 1: you're basically going to need to stay on them for

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Speaker 1: life in order to realize and maintain the benefits. Has

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Speaker 1: there been much discussion within NOVO about whether this is

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Speaker 1: indeed a forever drug or whether there is an off

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Speaker 1: ramp for those folks who lose the weight, who improve

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Speaker 1: their health and effectively want to cease taking the drug.

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Speaker 3: Yeah, I believe these are early days. Globally, there's more

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Speaker 3: more than a billion patients who live with obesity, and

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Speaker 3: I think we'll come to realize that they are quite

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Speaker 3: a difference among these patients. Some will have a very say,

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Speaker 3: progressive disease, be that type total leaders obesity, and will

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Speaker 3: continuously need more and more eificacious medicine, so they'll stay

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Speaker 3: on innovative medicine and probably higher price medicines.

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Speaker 4: But you will also.

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Speaker 3: Find the patients who perhaps can you know, manage the

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Speaker 3: disease by being on medicine for a shorter period of

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Speaker 3: time and maybe can move to say a first generation,

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Speaker 3: a generic, a cheaper price medicine. And some might even

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Speaker 3: be able to do without medicine. It's simply too early

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Speaker 3: to say, so we'll have to starty that more and

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Speaker 3: and look at at the individual patient journeys and all

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Speaker 3: of that. I think there's a fantastic opportunity from a

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Speaker 3: commercial point of view, but also in terms of lasting

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Speaker 3: health benefit for individual patients. And that's really what the

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Speaker 3: healthcare systems are after. And we know that some of

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Speaker 3: these conditions we talk about is actually what is driving

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Speaker 3: a significant part of the healthcare system cost, so different

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Speaker 3: patient journeys to get through a lasting health benefit for

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Speaker 3: the individual and the healthcare system, and I think that's

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Speaker 3: what interdaty is going to justify also paying for these innovations.

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Speaker 2: I'm also curious to talk about forms here. Obviously the

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Speaker 2: current form is injectibles. There's a lot of interest though

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Speaker 2: and when this will be available in a pill form.

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Speaker 2: So if I take a look at oral Sema glue Tide,

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Speaker 2: it's in phase three trials, I believe. Looking further into

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Speaker 2: the future, when of course that is up and running

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Speaker 2: and available to the public, how do you see that

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Speaker 2: shaping up. Do you think that pills could possibly overtake

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Speaker 2: the injectibles?

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Speaker 3: We see the data we head today maybe as the

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Speaker 3: best proxy in type two diabetes, where we have the

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Speaker 3: same active ingredients, the same molecule available both as a

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Speaker 3: weakly injection and as a daily tablet, and there we

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Speaker 3: actually see that when both are available, many will actually

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Speaker 3: believe that weakly injection is a very convenient way of

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Speaker 3: dealing with your disease, to take one shorter week and

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Speaker 3: you don't need to worry about it. But there are

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Speaker 3: also patients who prefer an all treatment.

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Speaker 4: So I think these.

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Speaker 3: Administration routes will co exist in the market and it'll

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Speaker 3: be down to individual patient preference. And then, of course,

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Speaker 3: back to our prior discussion it figency matters. So if

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Speaker 3: you have a progressive state of your disease where you

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Speaker 3: really need to have the highesticacy possible, you most likely

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Speaker 3: need to be unejectable treatment because that's the easiest way

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Speaker 3: to get into, say, the benefit of the molecule by injecting.

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Speaker 3: And then you might have patients who needs say less

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Speaker 3: if the case is treatment, who can get away with

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Speaker 3: using a tablet if they actually for

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Speaker 4: Daily tap the base treatment mm HM