Novo Nordisk plans to invest $4.1 billion in another U.S. factory, plowing more money into its biggest market amid rising discontent there over the cost of its obesity and diabetes drugs.
The project in Clayton, North Carolina, will double the company's production footprint in the U.S., adding 1.4 million square feet of space for the final stages of manufacturing in which Novo's medicines are filled into injector pens and prepared for consumers. The facility will add 1,000 jobs, the Danish drugmaker said Monday.
Read more: Do your employees need Ozempic? How to include GLP-1s in your health plans
The new U.S. site is the latest in a series of multibillion-dollar investments into ratcheting up supply for diabetes drug Ozempic and weight-loss medicine Wegovy, which have propelled Novo into the limelight and made it Europe's biggest company. Novo said it now plans to pour some $6.8 billion into production investments this year, up from $3.9 billion in 2023.
The investment comes amid increasing criticism of the cost of Novo's drugs in the U.S. The country is the largest market for weight-loss medicines, both because of the scope of obesity — nearly three-quarters of adults are overweight or obese — and because U.S. drug prices are higher than those elsewhere in the world. CEO Lars Fruergaard Jorgensen will testify before a Senate committee chaired by Sen. Bernie Sanders in September about the drugs' prices.
In North Carolina, the health plan for state employees dropped coverage of weight-loss drugs earlier this year after predicting a $1.5 billion loss by 2030 if it continued to pay for them.
Read more: It is possible for employers to balance anti-obesity GLP-1s access with costs
The new facility will produce future treatments for obesity and other diseases as well as the medicines in Novo's current portfolio, Novo said. Production in North Carolina is a cornerstone of the Danish company's growth, product supply chief Henrik Wulff said in a statement.
Work has already started on the 56-acre Clayton site, Novo's third in the city. It's across the street from another Novo factory. Construction will finish gradually, between 2027 and 2029.
Novo last year announced a $6 billion expansion to a drug ingredient factory in Kalundborg, Denmark, as well as a $2.5 billion addition to its site in Chartres, France. It said on Monday that it has decided not to pursue a potential expansion project in Dublin.
