Rerun: Lars Fruergaard Jørgensen CEO of Novo Nordisk

You will be amazed. Tune in.

Lars, very welcome to the podcast. Novo Nordisk has got an unrivaled reputation worldwide, so it's fantastic to have you on.

It's actually about genetics, that different people are in different situations from a physiology point of view. And it really takes help for those people. So that's what's now opening up the whole market. We've been researching in this for 25 years, at a time where most felt that obesity is a graveyard. It's not a place to go.

So we're really excited to see that now there's hope for many of those people who have been struggling, keeping weight down for many of their whole life.

And that is seen from your body's point of view as a sign of health. So it's really difficult to reverse when we become bigger, so to say, because it's seen as a way to protect you and prepare you for difficult times. So, of course, it's a complex matter. We also know that some do not put on weight. Some stay lean their whole life, almost no matter what they do, whereas others, they store fat and they gain weight.

So it's not one or the other. It's actually a complex disease that there are many factors at play.

And we see it as a problem that's hitting all societies, both the Western world and also the emerging countries.

Lifestyle, socioeconomic conditions, societal structures, together with genetics plays in.

So it's a very large societal challenge to deal with. And, of course, when we talk about children, I still think there's an opportunity to focus on prevention, making sure that school systems, how we organize societies, is designed in a way that we can prevent childhood obesity, with the aim of then also reducing obesity as an adult. But when adults like you and I, we become obese, it becomes much harder, because then you are starting to see it as a chronic disease and it becomes really,

Now, you have the kind of solution here, right, with your drugs. And you were the first pharma company, I think, actually, to have a product which went viral on social media, on TikTok, helped by Elon Musk. So tell us about your drug here.

And then it stops working when you have brought down the glucose level. When we took it into clinical development, we realized that it's actually a mechanism that has a number of benefits on different biologies. And it also turns out that it works in a way where it can be used in obesity. For instance, it reduces the appetite, so it makes you feel full,

which is obviously a key benefit when you want to address obesity.

So some probably 15, 20, 15 to 20 years back, we had to make a choice whether we actually wanted to take it into obesity research. And it was actually a tough discussion because back then we knew that most obesity medicines actually had failed in the marketplace. Some of them had turned out to have some side effects that were not acceptable, and products had to be withdrawn from the market. So we had this situation where we had something we knew was a safe and efficacious product in diabetes, a big business opportunity. And did we really dare to take it into obesity?

But we back then felt that if it actually works in obesity, we need to create those data. We need to demonstrate to the world that opportunity, because obesity is a leading cause of type 2 diabetes. So it will actually prevent the disease that we are put in the world to deal with. So we took the chance and it turned out that the first molecule reduced weight by some 6, 7, 8 percent, some got to 10 percent. That was actually what good looked like back then.

We took it to market and we saw some uptake, but it was not something that really opened the obesity market. Then we explored a second iteration, a type 2 GFP1 mechanism, which was prolonged in its action profile. So it was a weekly medicine, so the GFP1 circulated, say, in the body for a week. And that proved to be even more efficacious glucose-lowering agent. It also proved to have a significant risk in cardiovascular disease.

And we then also tested it in obesity. And there we saw that patients lost some, say, 16, 17,, 18 weight loss and a significant part, also more than 20 percent. And that was really what, say, created a change in the marketplace. Because if you can get to that level of weight loss, you're redefining what the individual patient feels about being obese. And you also, from a medical point of view, really generating a weight loss.

that's really interesting for from the medical community. And that's what now has opened up and created this very, very.

These products are injectable products. They require a physician that makes a script. So you have to talk to your doctor. We communicate to the doctors how to use the products, what are the mechanisms, what are some of the, say, safety concerns that you have to start patients in a right and compliant way. So we have a keen focus on that.

But also clear that when you bring a product with these characteristics, it takes a lot of attention. And you also have a lot of activity on social media, which is difficult for us to control because we cannot. So we are, of course, doing whatever we can do to make sure that it's established as a medical condition. It's the patients with a high BMI as what is indicated on the label. that's getting the products.

But it is a difficult setting to manage fully.

But of course, we only succeed if we really get the innovation to patients. So last year, we served 40 million patients. So we keep adding more and more patients to those we serve. But 40 million is still a very, very small fraction of the numbers we spoke about. There's more than 500 million people living with diabetes.

So in the eye of society, you could say that we have failed because we have not yet reached more of those patients. So we try to, across the world, have affordability options for those who are the most vulnerable. But that ranges from the highest GDP country like the U.S., where last year, as an example, 63,000 Americans got free insulin from No Noise. So if you fall between the cracks of the U.S. health care system, we pick up the bill.

If you live as a child in Africa or other low-income settings, we have a cap price of a vial of insulin at a few dollars in the low- and middle-income countries. So that brings down the daily treatment cost to, say, 10 cents or something like that, which is actually quite inexpensive. But if there's no cool chain, if there's no health care infrastructure, it's not enough just to have inexpensive medicine, because the markup in just transportation in Africa can be higher than the drug cost.

one could say that generic companies who produce big volumes inexpensively should be getting products out to many more patients. But actually, they do not, because they serve established markets. So to really get to many more patients, you need to develop infrastructure and you need to develop markets.

And there's a limitation to how products are adopted in, say, lower-income settings, because health care is less advanced. So it's as much about building capacity.

And then you can scale quickly in the US if you have innovation, but you also have very quick erosion when you have lots of exclusivity and competition comes in. And then the government is trying to make health care reforms, trying to mitigate some of the downsides of this rather complex private health care system. Another key element of the US market is that there's a big venture capital focus on biotech and translating science from academia into companies. And that's creating a source of innovation for the industry. So there is a very, very strong ecosystem for life science in the US.

If you compare that to Europe, it's unfortunately much less attractive. There is much less capital in the venture side of funding innovation to be established in biotech. So you see much fewer biotechs. You also see that it takes much longer time to get products approved by the European Medicines Agency. And after that, we have to go country by country to seek reimbursement.

And now, recently, the EU Commission is still not officially posted, but there's been a leaked policy proposal where they actually make, say, data protection even shorter. So we run the risk of making drug development in Europe even less attractive. So I'm very concerned that innovation will move out of Europe. I'm very concerned that European citizens will have lack of access or much slower access to some of the new medicines. And that creates less economic activity for the industry in Europe.

So I think that's a lose-lose-lose, less health benefit for patients, healthcare systems that are more challenged because you are not getting the benefit of medicines, and you have less economic activity, so less tax payments in Europe. So when Europeans get into regulating for the benefit of health and then actually doing it by destroying, say, conditions for industry, I think it's a big issue.

Maybe around 45% of our business is in the US. We have research in the US. We have manufacturing in the US. But we are a global company. We also do research manufacturing elsewhere.

But it's clear that if you look at our latest obesity innovation, that was launched in the US first. And now we are in Denmark and Norway, our two home countries. And Europe will come down the road. And this is the general picture that medicines are launched first in the US. And when there is capacity, say, Europe is being considered.

I think that's a problem. Because I think if you take obesity, that's going to turn into the medical intervention with the highest return on society. Because if you can prevent type 2 diabetes, if you can prevent a number of cardiovascular diseases, if you can prevent a number of cancer forms, et cetera, that's a very, very big benefit for the individual, but also for the healthcare system, in terms of avoiding cost and also making our populations more and more productive, at a time where we have aging populations. And in Europe and elsewhere, we have a smaller and smaller, say, population of active people to actually support that. So I think there's a lot at play here that we have to get right in Europe as we transform to, say, a new, say, geopolitical context where there are a lot of threats on the horizon, so to say.

And as an industry, we support that. Obviously, we want all to have access. We don't want to force people to take our medicines, but we want all to be able to have the chance to consider whether you, country by country, want to adopt this innovation. So we have actually committed to make it very transparent that for all our new products, where are we in the regulatory approval process? So, country by country, where are we in getting it to market?

Some countries decide not to reimburse it. Some countries say that until it's launched in these four countries, we are not going to start the process of assessing it. Then we're also saying that we will actually support selling at differentiated pricing levels linked to purchase power of the individual country. So if you live in Romania and have lower, say, GDP per capita, price can be lower. And we commit to actually strive towards bringing products to the market within two years in all countries.

So that's actually the first time the industry has come forward with a solution that's actually addressing the political wish of giving all the opportunity to access the latest innovation. And we think that's a better solution than starting to deteriorate, say, industry conditions, where at least the leak proposal indicates that unless we have launched in all 27 member countries, we'll actually have a reduced, say, period of data protection down to six years. And many products take more than six years to recoup the investment. And that means that if you have that uncertainty whether you will actually have a longer data protection period, which you will not know until you have launched and negotiated country by country, if you have to deal with that risk upfront, many countries will opt out of actually developing that opportunity. And we take the risk.

as an industry. We spend all the money in developing the data, and then we actually offer society the opportunity to assess whether you want to use a medicine or not. But if the conditions are such that we never get to take the risk, we don't create that opportunity for society. So I think it's a very, you know, it's a flawed logic to actually do, say, industrial, say, policy change to achieve the aim of health benefit for all Europeans.

But I was relative young back then, and I still remember what I learned in business school. And there we had one topic on cultural differences between countries. And I remember a book by Geert Hofstede actually talking to how you can measure different cultures on, I think, it's seven dimensions. And power distance was one dimension. And it turns out that the power distance in Denmark is very, very low.

So basically, you can just walk into the boss's office and start arguing with the boss. Whereas in the Netherlands, there's a higher power distance,

So I actually made a small slide as an opening slide whenever the Dutch team came and told us, OK, we look the same. But on this dimension, our national cultures are different. So I just wanted to say that if we come across as a bit arrogant, it's not because we are not respecting you. It's because of our national culture. And when you travel around the world, you find that Americans have certain traits, Japanese quite different traits.

Japanese are very consensus-based. You run a very long discussion. If the manager starts by saying what he or she believes, the team would not disagree. So we have to invite for a discussion, say that there are different ways forward. here.

I would like the team to discuss what could options be. And then there's a Japanese word for binding the roots. So you bind the roots behind a decision. But then, when you have made it, you can make sure that it's implemented exactly as you have agreed. So selling in the idea is part of the process.

If you in the US start by saying, you know, I'm the manager, I'm very much in doubt, what should we do? Then? Americans would say, OK, what kind of manager are you? What do you believe in? So you can say, you know, in New Nordic we want to have respect and we want to respect differences.

But you have to show it in different ways, based on that underlying national culture. So I think we can still have the same New Nordic way, but, you know, showing respect in different ways, based on that national underlying culture.

Being a small country also means that we can actually work together and collaborate in private-public partnerships that can actually showcase the world how you can tackle societal challenges. So when the government asks me to lead a change initiative, I step up. I mobilize the company. And, together with ministries, municipalities, regions in Denmark, academic institutions, we actually try to deal with, for instance, obesity as a societal challenge, acknowledging that if we succeed in preventing in school systems, we take a burden away from the individual. We take a burden away.

And I think the only other company that comes to mind would be L'Oreal in Paris. What are the advantages of having this longevity? When you look at our business cycles,

How should the company look like, say, in 10, 20 years? That's my key focus. While doing that, of course, there are a lot of important aspects to handle right now.

Ramping up supplies, getting commercial tactics right, develop the obesity market and all of that. But really setting us up for sustainable growth in decades to come is important. And that makes sense to have a really long focus, which jives with also our ownership structure of having a foundation controlling the shares, not having more than 25 percent of the shares approximately, but say majority control via.

But all my all my, you know, ancestors, on both my mother's and father's side, they kind of lived on the farm. So they had the same, you know, every day you wake up and you run the farm and you do that until you pass it on to the next generation. So in a way, so being in the hamster wheel is a family thing. Yeah. But the thing about farming is that you make, you know, you put some seeds in the ground, you nurture it.

And if you're lucky, because you are also up against nature and biology, then you can also do a good harvest. So for me, that's, you can say, living the purpose. And it's a huge privilege. And then, of course, I have to organize myself in a way that, you know, it doesn't come across as being in a hamster wheel, but actually.

Or do you believe in pattern?

I try to talk to, you know, our stakeholders, employees, our scientists, and I form my views.

And of course, we also need to do business cases and a lot of analysis. And when we look to acquire technology or a pipeline asset, we have to somehow assess that market opportunity. But I would also say that there are a lot of biases. If you look at how we saw obesity, we were biased by the relative modest uptake of the prior generation product and didn't see the inflection point.

So it's a combination you need to really understand the fundamentals.

And that's about, you know, I'm not a scientist, but there's something about believing in some core capabilities, really understanding what are our unique strongholds. And when we tend to double down on that, even though it looks difficult, we tend to succeed.

Now we are operating with more uncertainty from a geopolitical perspective. And I think what has happened in the world over the past few years, that nobody had given more than a very remote likelihood of probability. It means that we have to plan in ways that are not, say, linear in its thinking, but it's more based on some fundamental beliefs. So I'm a collector of impressions. I sense things.

And then I try to write down some core beliefs about what do we really believe in. And most of my decisions are based on some really fundamental core beliefs about the future. And then, of course, I have many people working who do more of the, say, detailed planning. And then you test some of these core beliefs up against the detailed plans and.

Being curious.

Avoid getting to conclusions too quickly.

So people tell me that it's difficult to give me negative feedback because my body language starts reacting. So I actually share with people that I really appreciate feedback, also when it goes against what I typically believe in, but give me some time to digest it, because I take it, you know, I just mentioned that this is like my farm. This is who I am. So something that's negative around it hits me. So it's really important for me that I'm not judgmental, that I'm really curious, that I'm really open.

So I get all the impressions. Also, those that maybe go against what we are doing right now.

If you become too stubborn, too fixed on your past decisions, so to say, you are starting to narrow the option space and you start getting blinded and, say, one bad decision might be followed by another one. So it's really being curious, really being, you know, slightly paranoid. and, you know, use your own doubts to fuel curiosity and get to know more. And of course, it's harder to be in doubt than to be, you know, firm, because when you're firm, life becomes easier. But there is a risk that you are heading in the wrong direction.

So I spend a lot of time speculating and being in doubt, and that leads to asking questions, being curious and the ambiguity, I think, is important. But then, of course, you also need to come to act and make a choice. So my team also knows that when a certain time has passed, I become very fixed on what we have to do. And I'm very, very difficult. It's very difficult to persuade me to do something else.

So really curious until that decisive moment where everybody understands, okay, now, I, you know, I crossed the line and now it's in the motion and there's no way back. Which can also be a bit dangerous at times, but it's important from reflection to decision.

Most people are within one meter of their cell phone all the time. So this, always on, is a really big threat for our cognitive capacity.

Many young people have also more holistic career aspirations or, say, life aspirations. You want to have a family life, you want to raise a family, you want to contribute in different ways. So when I joined the company,

and if you look at my career, it has been relatively linear. I had one opportunity to actually leave No Noise for two months between two jobs. when I moved back from Japan to Denmark. I took a two-month break with my family and traveled. I think we need to find ways to have non-linear careers and take career breaks and do different things throughout our career to stay creative and not end up being in this hamster wheel you alluded to before.

Because we are going to burn out our brains if people work with intensity like we work today. And sometimes maybe also shifting to another role in a different function. Take a step down in your career and get to learn a new area. So take breaks, travel, learn new things. Yeah, so society is changing a lot and I think, as a company, we need to also create the opportunities for young people to both do fantastic achievements in a company, but also find ways that you can actually take a break, recharge, explore something else, and then actually come back with new impressions, new energy, new perspectives on the world.

Thank you.