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Led by Ozempic and Wegovy, glucagon-like peptides (GLP-1s) have become a global phenomenon, with one in eight US adults currently taking one. Those two branded compounds, both made by Novo Nordisk, emerged from attempts to develop a diabetes drug. It effectively lowers blood glucose, slows gastric emptying, and reduces hunger, leading many patients to experience profound weight loss. In a world plagued by increasing obesity, the drugs’ utility extends far beyond diabetes treatment. So why did the formula sit untouched for 30 years after it was licensed?
Ozempic is a story of pharmacological success, but also of entrepreneurial failure. The tale provides a strong reminder that inventions and discoveries mean little unless they are combined with sound entrepreneurial judgment.
According to a paper published in the Perspectives in Biology and Medicine, a startup produced a GLP compound in the late 1980s, and pharma giant Pfizer sponsored human trials that confirmed the drug’s efficacy in reducing blood glucose levels and slowing gastric emptying. One member of the startup team, Jeffrey Flier of Harvard, explained what happened next:
I was shocked when told that senior Pfizer leadership had concluded that there would never be another injectable therapy for diabetes other than insulin. What led them to this conclusion was never explained….I had been deeply impressed by their rapid decision to invest in our company, and I was equally dumbfounded by their decision to end their investment despite convincing early evidence of the program’s success.
Confident in its own conclusions, Pfizer pulled the plug on the drug in 1991. The startup folded.
Under the terms of Pfizer’s agreement, the license remained with the Boston hospital where researchers discovered GLP-1’s mechanism and conducted the human trials. It was then acquired by Novo Nordisk in 1992, where scientists used it to develop what eventually became semaglutide, the pharmaceutical sold as Ozempic and Wegovy. While it is unclear whether, as Max Marchione put it on Twitter, the GLP-1 agonist data simply “sat in a filing cabinet for 30+ years,” Pfizer’s decision to abandon the project likely delayed its development.
While it is unclear whether, as Max Marchione put it on Twitter, the GLP-1 agonist data simply “sat in a filing cabinet for 30+ years,” Pfizer’s decision to abandon the project certainly delayed its development. Had the company continued investing in the research, it might have brought the drug to patients years earlier—and captured a significant share of what has become a $190 billion market.
Clearly, mistakes were made in the development of Ozempic, but what’s notable is that the product’s success required far more than the idea. Even a great idea is not a product and may never become one — much less a successful one. Business history is filled with cases in which inventors appear to have been deprived of the rewards of their discoveries. Many great inventions were, in some sense, stolen ideas commercialized by someone other than their inventors. George Westinghouse bought patents from Nikola Tesla, and undertook illuminating the nation while Tesla, the lone genius, struggled with poverty. Elias Howe invented the sewing machine but lost most of the revenue to Isaac Singer, who was only later compelled to pay the inventor royalties. Antonio Meucci invented the telephone but couldn’t afford to secure or defend patents from Alexander Graham Bell’s enthusiastic dissemination of the device.
Inventors frequently failed to recognize the full market potential of their ideas. Entrepreneurial outsiders notice the discovery, develop it into a desirable technology or product, and implement strategies for manufacturing, distributing, and marketing the invention.
Some unethical behavior, fraud, exploitation, and outright stealing certainly does exist in these stories. But it would be a mistake to reduce this entrepreneurial instinct to taking advantage of or free-riding on a mistreated genius who would otherwise have realized the great benefit, himself. In a very real sense (as GLP-1 development demonstrates), what actualizes the value of an idea is the execution: operationalizing a discovery into a product or service that people find valuable. The idea has relatively little value, compared to the scalable solution built upon it.
We typically do not learn about it much in school, but there is such a thing as second-mover advantage. This phenomenon (that the first mover is not profitable but the second mover is) is often explained in terms of avoiding the costly mistakes that the first mover makes. But cost is not the true story. Second movers recognize — imagine — a new idea’s utility to some market segment. Like Novo Nordisk and George Westinghouse, they strive to make the implementation of the idea as valuable as possible, positioning it as valuable to potential customers. The creation may be every bit as valuable as the idea, and often more so.
Henry Ford, for another historical example, was not the inventor of the automobile, but the innovator of the affordable car. Existing manufacturers of automobiles did not recognize the potential appeal of their horseless vehicles. Henry Ford did — and made it happen. Far from the first mover, or even the second mover, he was the first to recognize what a mass market of ordinary people wanted from a car. The other producers did not. Ford transformed a toy for the wealthy into practical transport for the ordinary.
The same type of story can be told about many successful innovations. The invention (the new thing) might have limited value, until its utility is captured, marketed, and made available to people. Entrepreneurs and investors look for the value proposition in new ventures: what would make buyers want this new thing? They ask not “is this a new thing?” but “is this new thing generating value someone is willing to pay for?” The questions may have the same answer but often do not.
The story of Ozempic is one of failed entrepreneurship, but also of its eventual success. Pfizer, judging from how the story has been told, did not recognize the value of the drug. Viewing GLP-1s as a treatment for diabetes, and nothing else, Pfizer execs failed to imagine how other consumers might value these clinical effects.
Perhaps they were right — from the perspective of treating diabetes, another injectable may not be necessary. But they were wrong regarding the value of the drug, which arises from a different use by a different market segment.
The Ozempic craze of today is not driven by diabetics seeking to manage their disease, which Pfizer viewed as its only potential application. Millions of non-diabetics now choose the compound for other reasons. Pfizer completely missed that value proposition.
A Dear Prudence reader who needs to unplug from current events every few weeks asks (search "autism and ADHD") what to do about people who "accuse me of not caring about what's happening outside my house's four walls" for taking a break from Things.
The question and the answer remind me of an acquaintance from my pre-Objectivist college days who seemed compelled to help people to the point it was negatively affecting his grades and other aspects of his life. You can't help them if you don't even take care of yourself, I observed. (Ayn Rand soon helped me get to what I was missing: That nobody has an unchosen obligation to help anyone.)
Prudence's answer is a little bit like mine then, as it also implicitly assumes altruism:
-- CAV
The question and the answer remind me of an acquaintance from my pre-Objectivist college days who seemed compelled to help people to the point it was negatively affecting his grades and other aspects of his life. You can't help them if you don't even take care of yourself, I observed. (Ayn Rand soon helped me get to what I was missing: That nobody has an unchosen obligation to help anyone.)
Prudence's answer is a little bit like mine then, as it also implicitly assumes altruism:
I appreciate that these people care about the awful things unfolding around us, and I understand that it can be frustrating to hear someone say they're simply not engaging. But don't they realize that if you're ultimately going to be able to tune into current events in a permanent way (and more important, do something to help make the changes you'd like to see) you have to be mentally stable and not in the middle of a family crisis to do so? You know the way you unplug and walk away from the news because it's draining your energy in a way you can't afford? Do the same thing -- but maybe permanently -- to those who are disregarding your wellbeing to shame you for what you're doing to survive. I would be very leery of anyone who saw me struggling with multiple diagnoses, caring for two generations of people, and decided to attack me instead of helping me. [bold added]Despite its flaws, the answer is excellent advice, and it's too bad it doesn't question altruism since the attackers exemplify by way of a negative example a crucial distinction Rand made, but rarely gets credit for:
Do not confuse altruism with kindness, good will or respect for the rights of others. These are not primaries, but consequences, which, in fact, altruism makes impossible. The irreducible primary of altruism, the basic absolute, is self-sacrifice -- which means; self-immolation, self-abnegation, self-denial, self-destruction -- which means: the self as a standard of evil, the selfless as a standard of the good. [bold added] ("Faith and Force: The Destroyers of the Modern World," Philosophy: Who Needs It)The attackers certainly can't be accused of goodwill the way -- thoughtless at best -- they would goad the letter-writer to self-destruction! It's an extreme example, but a good one of how altruism is, in fact, the enemy of the welfare of the "others" its preachers express concern about.
-- CAV
Modern historians have rarely told the truth about the history of capitalism, especially about the early days of the Industrial Revolution. In this Guest Post, Wanjiru Njoya reckons it's time to set the record straight...
Nor is it enough to inform people of the correct definition of capitalism, because socialist ideology cannot be displaced by semantic debates. Rather than merely informing socialists that they do not understand what “real” capitalism is, it is necessary also to defeat the underlying ideology, by defending the foundational principles of civilisation—private property, individual liberty, voluntary exchange, and limited government.
Dr. Wanjiru Njoya is the Walter E. Williams Research Fellow for the Mises Institute, and the author of Economic Freedom and Social Justice (2021), Redressing Historical Injustice (2023), “You Stole Our Land: Common Law, Private Property, and Rothbardian Principles of Justice” (2024) and “Individual Liberty, Formal Equality, and the Rule of Law.”
Dr. Njoya earned her Ph.D. in Law from the University of Cambridge (UK) and taught law for over 20 years at a number of UK universities, including the University of Oxford and the London School of Economics.
Lies, Damn Lies, and the History of Capitalism
by Wanjiru Njoya
Mark Twain popularised the phrase, “There are three kinds of lies: lies, damn lies, and statistics.” It could equally well be adapted to depict the role of socialist narratives taught as “history”—narratives that wreak even more economic havoc than outright lies. Lies can be debunked with facts, but socialist narratives appeal to political and moral ideologies that are less easily dislodged once they take root.
The socialist view of economic history teaches that capitalism is based on exploiting the poor. It alleges that Western nations are rich due to colonising the Third World. As the economist Peter Bauer observed:
The industrial revolution is said to have been powered by theft from poor countries, with white nations acquiring wealth by subjugating other races. Bauer details the essential facts proving these beliefs to be false. He also identifies some of the reasons why these types of anti-capitalist narratives are so influential, arguing that “acceptance of emphatic routine allegations that the West is responsible for Third World poverty reflects and reinforces Western feelings of guilt.”
These guilt narratives, which masquerade as “historical facts,” are more pernicious and more difficult to defeat than blatant lies because, much like statistics, they are assumed to be objective and factual—even when they bear no relationship to the truth. Bauer describes them as “not only untrue, but more nearly the opposite of the truth.”
These myths have fed the prevailing tendency to view “capitalism” as a catch-all phrase denoting cruelty to the less fortunate. In his book Capitalism and the Historians, Hayek explains that this hostile view of capitalism is based on false history:
Hayek argued that despite the “thorough refutation of this belief,” it has not lost its influence—“Yet, a generation after the controversy has been decided, popular opinion still continues as though the older belief had been true.” He warned that this “socialist interpretation of history,” and in particular economic history, had “governed political thinking for the last two or three generations.” Like Bauer, he emphasised that it has no basis in truth:
But it is not a simple matter of presenting the facts. Given people’s prior understanding of what they assume to be meant by “capitalism,” which reflects the commonly accepted narratives, any defense of capitalism merely reinforces their moral and ideological objection. Such defenses seem to be saying “yes, the rich brutally exploit the poor, but it’s worth it.”
To illustrate this point, take the example of Bauer’s observation that colonialism in fact introduced economic progress. He explained:
by Wanjiru Njoya
Mark Twain popularised the phrase, “There are three kinds of lies: lies, damn lies, and statistics.” It could equally well be adapted to depict the role of socialist narratives taught as “history”—narratives that wreak even more economic havoc than outright lies. Lies can be debunked with facts, but socialist narratives appeal to political and moral ideologies that are less easily dislodged once they take root.
The socialist view of economic history teaches that capitalism is based on exploiting the poor. It alleges that Western nations are rich due to colonising the Third World. As the economist Peter Bauer observed:
The principal assumption behind the idea of Western responsibility for Third World poverty is that the prosperity of individuals and societies generally reflects the exploitation of others.
These guilt narratives, which masquerade as “historical facts,” are more pernicious and more difficult to defeat than blatant lies because, much like statistics, they are assumed to be objective and factual—even when they bear no relationship to the truth. Bauer describes them as “not only untrue, but more nearly the opposite of the truth.”
These myths have fed the prevailing tendency to view “capitalism” as a catch-all phrase denoting cruelty to the less fortunate. In his book Capitalism and the Historians, Hayek explains that this hostile view of capitalism is based on false history:
Who has not heard of the “horrors of early capitalism” and gained the impression that the advent of this system brought untold new suffering to large classes who before were tolerably content and comfortable? We might justly hold in disrepute a system to which the blame attached that even for a time it worsened the position of the poorest and most numerous class of the population. The widespread emotional aversion to “capitalism” is closely connected with this belief that the undeniable growth of wealth which the competitive order has produced was purchased at the price of depressing the standard of life of the weakest elements of society.That this was the case was at one time indeed widely taught by economic historians.
Hayek argued that despite the “thorough refutation of this belief,” it has not lost its influence—“Yet, a generation after the controversy has been decided, popular opinion still continues as though the older belief had been true.” He warned that this “socialist interpretation of history,” and in particular economic history, had “governed political thinking for the last two or three generations.” Like Bauer, he emphasised that it has no basis in truth:
Most people would be greatly surprised to learn that most of what they believe about these subjects are not safely established facts but myths, launched from political motifs and then spread by people of good will into whose general beliefs they fitted. . . most of what is commonly believed on these questions, not merely by radicals but also by many conservatives, is not history but political legend.These political legends are depicted as merely descriptive of historical reality. Hayek attributed this in part to the claim of some historians to be objective:
One reason for this probably is the pretension of many modern historians to be purely scientific and completely free from all political prejudice. . . . There is indeed no legitimate reason why, in answering questions of fact, historians of different political opinions should not be able to agree. But at the very beginning, in deciding which questions are worth asking, individual value judgments are bound to come in.Lacking a huge amount of time for independent study, many people rely on historians for factual analysis. When professional historians push their ideology over as “history” their readers are often none the wiser. Hayek saw this as a major reason why socialist ideology had become entrenched:
The remarkable thing about this [socialist] view is that most of the assertions to which it has given the status of “facts which everybody knows” have long been proved not to have been facts at all; yet they still continue, outside the circle of professional economic historians, to be almost universally accepted as the basis for the estimate of the existing economic order.Why are false claims that have “long been proved not to have been facts at all” still taught as historical reality? It is not necessarily because socialist historians deliberately try to promote their own ideology—although that is sometimes the case. The more serious issue is failure to appreciate that interpretation of history requires selection and interpretation. As Hayek put it, value judgments necessarily influence historical interpretation:
And it is more than doubtful whether a connected history of a period or a set of events could be written without interpreting these in the light, not only of theories about the interconnection of social processes, but also of definite values—or at least whether such a history would be worth reading.Further, the dissemination of historical narratives is not confined to formal study. When a historical narrative is dominant, in the manner described by Hayek, it is embedded as part of the general culture and generally accepted as being “obviously true.”
. . . it is via the novel and the newspaper, the cinema and political speeches, and ultimately the school and common talk that the ordinary person acquires his conceptions of history. But in the end even those who never read a book and probably have never heard of the names of the historians whose views have influenced them come to see the past through their spectacles.Hayek emphasised the importance of getting the facts right, as “we can hardly hope to profit from past experience unless the facts from which we draw our conclusions are correct.” And one could certainly provide the detractors of capitalism with the facts about productivity and economic progress. Bauer’s work on economic development is a great resource for that purpose.
But it is not a simple matter of presenting the facts. Given people’s prior understanding of what they assume to be meant by “capitalism,” which reflects the commonly accepted narratives, any defense of capitalism merely reinforces their moral and ideological objection. Such defenses seem to be saying “yes, the rich brutally exploit the poor, but it’s worth it.”
To illustrate this point, take the example of Bauer’s observation that colonialism in fact introduced economic progress. He explained:
In the early 1890s there were in the Gold Coast no railways or roads, but only a few jungle paths. Transport of goods was by human porterage or canoe. By the 1930s there were railways and good roads; journeys by road required fewer hours than they had required days in 1890. In British West Africa public security and health improved out of all recognition over the period. Peaceful travel became possible; slavery, slave trading and famine were practically eliminated, and the incidence of the worst diseases greatly reduced.You would expect that to settle the matter for anyone who is genuinely concerned with the facts. But, on the contrary, socialists respond with yet more mockery —“just because you built railroads does not mean colonial brutality was acceptable.” They miss the point entirely, because they cling to their erroneous view of what capitalism is in the first place. Propaganda is based on false ideology and cannot be displaced by highlighting the facts. The underlying ideology itself must be countered: pointing out that capitalism itself is the only system allowing wealth and riches to be attained without exploitation, that the trader principle of capitalism allows each party a win-win, and that it is the only political system protecting an individual's rights.
Nor is it enough to inform people of the correct definition of capitalism, because socialist ideology cannot be displaced by semantic debates. Rather than merely informing socialists that they do not understand what “real” capitalism is, it is necessary also to defeat the underlying ideology, by defending the foundational principles of civilisation—private property, individual liberty, voluntary exchange, and limited government.
* * * *
Dr. Njoya earned her Ph.D. in Law from the University of Cambridge (UK) and taught law for over 20 years at a number of UK universities, including the University of Oxford and the London School of Economics.
Her article previously appeared at the Mises blog.
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