Novo Nordisk is preparing to launch a major expansion in Johnston County, part of the Danish pharmaceutical company’s efforts to ramp up production globally to meet demand for its popular diabetes and weight-loss drugs.
The project could bring about 1,000 new jobs and more than $1.5 billion in investment to the county, a person familiar with the company’s plans told WRAL News on Tuesday. An announcement about the expansion could come as early as Monday, according to the person, who spoke on condition of anonymity because they were not authorized to discuss the company’s plans.
Novo Nordisk has been manufacturing and packaging diabetes and obesity medications for many years at facilities in Johnston and Durham counties, where the company employs about 2,500 people. Last year, the company’s net sales increased 31 percent, mainly due to the popularity of these drugs. The company is currently in the process of an $11 million global manufacturing expansion to keep up with demand.
The company filed for new building permits last weekend for the estimated $165.2 million project on land near its Johnston County operations. The application, filed with the county on Thursday, is just the latest in a series of land purchases, building permit applications and rezonings the company has made around an apartment complex on Powhatan Road, east of the intersection of U.S. 70 and Interstate 42.
Novo Nordisk has acquired more than 200 acres near its existing operations since early last year through a series of land deals worth at least $14.3, according to county property records. Less than a year ago, Johnston County commissioners agreed to rezone more than 100 acres of land to allow Novo Nordisk to use it for industrial purposes.
The company has applied for about 20 building permits in the past two years, according to Johnston County Building Inspection records, and Thursday’s permit listed the most construction-related expenses of any of them.
“North Carolina will remain a keystone of our manufacturing operations as we evaluate market demand and supply chain solutions,” Novo Nordisk spokeswoman Stacey Beard said in a statement. “While we cannot release any further details about construction or permitting at this time, we expect to share our plans publicly in the coming weeks.”
Possible incentives
The Johnston County Board of Commissioners is scheduled to hold a special meeting Monday to discuss a proposal for a 12-year economic development grant for an unnamed company that wants to expand an existing manufacturing facility in the Johnston County Research and Training District in Clayton, an area that’s home to Novo Nordisk Inc. and dozens of other businesses. A person familiar with the company’s plans told WRAL the hearing is about Novo Nordisk.
Novo Nordisk plans to hold a press conference at its existing facility later that day, according to an event invitation provided to WRAL. Companies often announce major expansions shortly after governments agree to incentives related to the expansion.
Economic development deals tend to be highly secret, with companies requesting anonymity to work out expansion plans, negotiate with state and local governments and secure real estate. Information about such transactions is often not subject to public records laws.
Johnston County Commission Chairman Butch Lauther did not respond to a message seeking comment, and Chris Johnson, the county’s economic development director, declined to name the company.
“This is a tremendous opportunity for Johnston County,” Johnson said, “but there’s also an equal opportunity for individuals who live in Johnston County. [in the greater region] The goal is to provide “high-paying, high-quality jobs.” Johnston County is part of the Biopharma Crescent region, which consists of five counties in eastern North Carolina, where biotechnology and pharmaceutical manufacturers are concentrated.
Johnson added that more than half of Johnston County’s workers travel outside the county for employment. “Anytime we have an expansion or a new business come to Johnston County, it’s exciting,” he said.
The state Commerce Department is scheduled to hold a regular meeting of its Economic Investment Committee, which reviews and approves state incentives. A department spokesman declined to comment on whether the state is considering an incentive package for drugmakers. The department typically does not release details until incentives are up for a vote.
Production expansion
GLP-1 drugs are effective for weight management and diabetes treatment, but they can also be very expensive, and demand has outstripped supply since the U.S. Food and Drug Administration began approving them for a range of conditions.
Novo Nordisk expects sales of weight-loss drugs such as Wegobee to rise 154% and sales of diabetes drugs such as Ozempic to rise 29% in 2023. The company announced investments of about $11 billion last year to expand production around the world. The company said it aims to run its production facilities around the clock to meet demand.
“Addressing supply issues that are preventing us from meeting the growing demand for our products is Novo Nordisk’s top priority,” the company said in its annual report for fiscal 2023. “We know we need to go the extra mile to increase production capacity, and our manufacturing colleagues are working around the clock to get additional supplies on pharmacy shelves and into patients’ hands.”
Despite these investments, the company expects demand and supply constraints to create a supply shortage in 2024.
The expansion comes as North Carolina officials try to negotiate lower prices with Novo Nordisk after pushback from some insurers and federal lawmakers over the broad range of pricing.
Ozempic, approved to treat type 2 diabetes, has a list price of about $968 per pack. Wegovy, approved to help with weight loss and reduce the risk of heart disease in some adults, has a list price of about $1,349.02 per pack.
Prices are expected to come under downward pressure due to rising production volumes and competition.Novo Nordisk said in May it was cutting prices for Wegovy and Ozempic, citing rising volumes and competition.
