Novo Nordisk’s Obesity Challenge Is a Business Model Problem, Not a Product Problem Or an Execution Failure

Executive summary
Novo Nordisk’s recent struggles in the obesity market are often explained as execution failures or temporary loss of momentum. This interpretation misses the core issue. The market for obesity drugs has shifted from a prescription-driven, payer-mediated system to a consumer-driven outcome market. In this environment, molecules commoditise, demand becomes patient-led, and value migrates from products to systems. Novo’s challenge is therefore not to regain product leadership, but to redesign its business model around outcomes, ecosystems and long-term relevance.

Why This Is Not a Product Crisis, but a Business Model Crisis

The current debate around Novo Nordisk is often framed as a story of lost momentum. Production bottlenecks. A stronger competitor. A delayed response to direct-to-consumer channels. The Economist recently described Novo’s situation as a company trying to “recover its lead” in obesity drugs.

That framing is comforting — and misleading.

Novo Nordisk is not facing a temporary execution problem. It is facing a business model transition that challenges some of the deepest assumptions of the pharmaceutical industry.

From prescription market to consumer market

For decades, the pharmaceutical business model was stable and predictable.

Doctors prescribed.
Insurers paid.
Patients complied.
Demand was mediated, controlled and forecastable.

Obesity drugs break this logic.

GLP-1 therapies did not spread primarily because doctors aggressively pushed them. They spread because patients pulled them into the system. Social diffusion, identity, stigma reduction and self-optimisation became demand drivers. Payment often came directly from patients, not from insurers.

This single shift changes everything.

When patients become the economic buyer, the classic pharma logic collapses. Forecasting, capacity planning, pricing, distribution and even brand positioning must be redesigned. Novo Nordisk underestimated this shift. Eli Lilly did not.

The wrong unit of value: selling molecules instead of outcomes

Novo’s implicit value proposition is still product-centric:

“We offer a clinically proven GLP-1 drug that helps you lose weight.”

That was sufficient when Novo was alone in the market.

It is insufficient in a competitive, consumer-driven environment.

Patients do not want semaglutide. They want reliable, sustained weight loss with minimal friction. The drug is a means, not the end. As competition increases and patents expire, the molecule inevitably becomes a commodity.

This is not speculation. We have seen it before:

Insulin (where value shifted over time from the molecule itself to delivery systems such as insulin pens, pumps and integrated diabetes management solutions) see my post from 2009 on Novo Nordisk’s move away from molecules to insulin pens
Statins (cholesterol-lowering drugs that became standardised, generic and price-driven once clinical effectiveness converged)
SSRIs (Selective Serotonin Reuptake Inhibitors, antidepressants such as Prozac that were once breakthrough products and later became economically commoditised)

In each case, value migrated away from the molecule toward the system around it.

The uncomfortable implication for Novo is this:
If you sell drugs, you will eventually compete on price.
If you sell outcomes, you can compete on relevance.

Where the value chain breaks

Novo’s traditional value creation system or value architecture is linear:

R&D → Manufacturing → Wholesalers → Insurers → Physicians → Patients

This system is optimised for control, not responsiveness.

Obesity drugs exposed its fragility:

Demand exploded unpredictably.
Supply lagged.
Compounding pharmacies filled the gap.
Telehealth providers captured customer relationships.
Price transparency replaced rebate complexity.

None of this is accidental. It is what happens when a value chain designed for gatekeeper markets is suddenly exposed to consumer markets.

Cutting jobs or expanding capacity does not fix this. It merely stabilises a structure that no longer fits the market.

The coming commoditisation shock

One detail in the current debate deserves more attention: semaglutide will lose patent protection in several major emerging markets in 2026, including China, India and Brazil.

At the same time:

Over 160 obesity drugs are in development.
Differentiation by efficacy is narrowing.
Willingness to pay varies dramatically across markets.

This sets the stage for classic commoditisation dynamics.

The strategic question for Novo is therefore not:

“How do we win the next product cycle?”

But:

“What captures value when the molecule no longer does?”

Why “thinking like Amazon” is not enough

Novo’s new CEO says the company must develop a “consumer mindset” and “think more like Amazon”.

This is directionally right — but strategically vague.

Amazon is not successful because it delivers faster. Amazon is successful because it:

Optimises lifetime value, not transactions.
Uses data to personalise offerings.
Builds switching costs through ecosystems.
Treats products as entry points, not profit centres.

The real question Novo must answer is uncomfortable:
What is the equivalent of Amazon Prime in obesity management?

Without a clear answer, direct-to-consumer is just a new distribution channel, not a new business model.

What a business model response would actually look like

A genuine response to the obesity market would require Novo to move beyond drugs as the core value unit.

Three strategic directions are plausible:

Outcome-based models
Subscription pricing, bundled services, long-term weight maintenance, and shared risk with payers or employers.
Portfolio orchestration
Multiple drugs, multiple patient archetypes, lifecycle management from initiation to maintenance, data-driven switching.
Ecosystem control
Owning the interface to the patient, integrating diagnostics, behavioural support, monitoring and digital services.

In all three cases, the drug becomes less important than the system that makes it work.

The real transformation challenge

The narrative of “recovering leadership” suggests a return to a former state.

That state no longer exists.

Novo Nordisk is not transforming from a cautious drugmaker into a nimble consumer brand. It is being forced to choose between two futures:

Becoming the best manufacturer of an increasingly standardised input.
Becoming the orchestrator of outcomes in a new health-consumer market.

Eli Lilly appears further along in recognising this distinction.

The tunnel Novo entered with Wegovy does not end with more capacity or better pricing. It ends only if the company accepts a hard truth:

This is not a product race anymore.
It is a business model race.

Traditional learning

When a company that has been successful for decades suddenly struggles, the reflex is often to ask what went wrong recently.

The more useful question is usually different:

Which assumptions that once made us successful are no longer true?

Novo Nordisk’s story is a reminder of a classic pattern in business model innovation:

Markets do not change when new products appear.
Markets change when who pays, who decides, and what counts as value shifts.

Those shifts are easy to describe in hindsight — and very hard to act on in real time.

That is why leadership today is less about having the best product, and more about having the courage to redesign the business model before the old one visibly collapses.