Novo has a big pricing decision to make with semaglutide. Which way will it go?

As Novo Nordisk’s highly anticipated semaglutide pill nears the market, the company has a big decision to make: at what price?

Because oral semaglutide would be the first GLP-1 tablet, Novo has to "make some technical considerations," CEO Lars Fruergaard Jørgensen said in an interview. "Do we price as a GLP-1, or do we price more as a tablet, or somewhere in between?"

On the one hand, it’s more expensive to produce a tablet than it is to produce one injection, because tablets require more active ingredient, he said.

But on the other, a lower price could potentially help the Novo pill snatch share from its in-class competitors—with Eli Lilly’s Trulicity representing the heavyweight among them—and even gain ground against oral SGLT2 treatments.

Of course, the price the Danish drugmaker ultimately sets for semaglutide won’t include rebates—and rebates could be taking a bigger chunk out of GLP-1 sales come 2019, Bernstein analyst Wimal Kapadia pointed out in a recent note to clients.

While Novo said on its second-quarter earnings call that it expects a U.S. price drop for 2019 to be "predominantly" driven by basal insulins, it "did not clarify" whether GLP-1 pricing would decline, too.

As he noted, though, with GLP-1s, "it is a volume game"—and volume is exactly what Novo’s going for. In addition to blockbuster injectable Victoza, it already has a once-weekly injectable version of semaglutide—known as Ozempic—rolling out in the category with a price tag of $729.40 per pen.

On that front, Jørgensen says, things are going well. The company now has better than 60% access for Ozempic in the U.S., and it continues to switch reps over from Victoza to Ozempic as that access grows.

"We strike when we have access," he said, adding that reps "stay on Victoza until access is obtained."

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