Quick overview

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Novo Nordisk stock dropped 2% after reports that Spain’s health ministry asked for clarification regarding Novo Nordisk A/S’s (NVO) obesity awareness campaign, which may have violated the country’s prescription drug advertising laws.

Spanish officials indicated that the campaign’s website, which was taken down on June 24, might be considered indirect advertising of prescription medications, a practice illegal in Spain. The Danish pharmaceutical company is facing some backlash.

The investigation specifically concerns whether the campaign violated laws banning both direct and indirect promotion of prescription drugs. A report in The BMJ states that the campaign used visual elements similar to content warnings and included Novo Nordisk’s branding.

 It has faced criticism for its aggressive tone and fear-based messaging, although several medical societies supported the campaign.

This is the focus of the current investigation.

Shares in Novo Nordisk fell as much as 3.5% on Monday after detailed trial results for its experimental obesity drug CagriSema raised investor concerns about its competitiveness with Eli Lilly’s (LLY.N) pipeline.

Nearly two-thirds of patients who started a weight-loss treatment like Eli Lilly’s Zepbound or Novo Nordisk’s Wegovy continued using it a year later, according to an analysis of U.S. pharmacy claims cited by Reuters. The data indicates that more people may continue using these obesity drugs as supply shortages decrease and insurance coverage expands.