Three Reasons Saxenda Is Succeeding Where Others Struggle

Recent reports from business analysts are making it clear that Saxenda is succeeding in the market for obesity treatment where other competitors are struggling. Marketed by Novo Nordisk, Saxenda is the fourth new obesity drug treatment introduced in the last four years. The other three — Qsymia, Belviq, and Contrave — all seem to be falling short of investor expectations. Among those three, disillusionment with lofty expectations for sales have grown as time has passed.

By comparison, Saxenda is surpassing relatively modest expectations, despite its injectable dosage form and a high price compared to the other new products. Following an April launch in the U.S., industry analysts report that sales are running at about twice the expected rate. Spencer Osborne of Seeking Alpha suggests that Novo Nordisk seems like it “can simply waltz into the anti-obesity space and have it be a success for the bottom line,” while other competitors could not. Three factors help to explain the difference:

  1. Managing Expectations. First and foremost, Novo Nordisk came into the Saxenda launch articulating a clear understanding that the market for obesity treatment would be slow to develop. They knew full well that the necessary changes in prescribing and reimbursement practices would take considerable time to achieve.
  2. Tying into Diabetes. Type 2 diabetes has long been understood to have a close relationship with obesity, but physicians have tended to manage blood sugar in diabetes more than weight. The active ingredient in Saxenda, liraglutide, is an effective treatment for managing blood sugar in type 2 diabetes. The other three drugs have a positive effect on blood sugar only indirectly as a result of weight loss. Extending the use of liraglutide for weight management is thus not a such a big leap for physicians and payers.
  3. Established Comfort. Unlike all of the other new drugs for obesity, Saxenda is simply a new dose of a drug that physicians are already prescribing. Again, Novo Nordisk is building upon success instead of starting from scratch.

So there’s really nothing magic here — just good expectation management and a knack for building upon strengths. Hopefully others will catch on and people with obesity will have more options.

Click here for more perspective from Seeking Alpha.

Succeeding, photograph © Stan Lupo / flickr

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October 6, 2015