Novo NordiskThe company’s chief executive officer was grilled by the Senate on Tuesday over high prices for its weight-loss drug Wegovy and diabetes treatment Ozempic, as demand for both injectable drugs soars in the United States.
Novo Nordisk CEO Lars Fluagaard Jorgensen, speaking to lawmakers at a Senate Health, Education, Labor and Pensions Committee hearing in Washington, D.C., stopped short of saying the company would significantly reduce the prices of the two drugs.
But Jorgensen said he wants to work with them on policy solutions to address the “structural problems” that drive up prescription drug costs. He also promised to talk with pharmacy benefit managers, the middlemen who negotiate drug discounts with drug manufacturers on behalf of insurers, and “work with you on every front to ensure patients have access to and can afford their medications.”
The pledge came after Sen. Bernie Sanders, I-Vt., the chairman of the Senate committee, said he had received written commitments from all major pharmaceutical companies that they would not restrict coverage for Wegovy and Ozempic if Novo Nordisk lowered its list price. The hearing comes about five months after Sanders launched an investigation into the Danish drugmaker’s pricing practices.
“Ms. Jorgensen, all we’re saying is we want you to treat the American people like everyone else in the world,” Sanders said at Tuesday’s hearing. “Stop screwing us over.”
Sanders noted that Novo Nordisk has generated nearly $50 billion in sales from Wegoby and Ozempic, with the majority of that revenue coming from the U.S. Novo Nordisk charges Americans significantly higher prices for its blockbuster drugs than patients in other countries, Sanders argues: Ozempic costs about $969 per month in the U.S. before insurance coverage, and Wegoby costs about $1,350 per month.
Sen. Bernie Sanders (Independent, R-Vermont) speaks during a hearing of Novo Nordisk CEO Lars Jorgensen on U.S. prices for weight-loss drugs Ozempic and Wegovee by the U.S. Senate Committee on Health, Education, Labor and Pensions on Capitol Hill in Washington, U.S., September 24, 2024.
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Meanwhile, a month’s supply of both drugs could cost less than $100 in some European countries, the committee said, with Ozempic costing just $59 in Germany and Wegovy costing $92 in the UK.
Sanders also said last week that CEOs of major generic drug companies had said they could profitably sell Ozempic for less than $100 a month. Currently, there are no generic alternatives to Ozempic available in the United States.
Major PBMs, including: UnitedHealth GroupOptum Rx and About CVsIn his announcement, Sanders said Caremark and some health insurers would be able to make Wegobee and Ozempic more widely available to patients by charging the drug a monthly list price of $100.
That could undermine Jorgensen’s argument in her testimony that PBMs are to blame for the high list prices of Novo Nordisk’s drugs and that “PBMs have near-total control over the ability of hundreds of millions of Americans to get affordable access to the medicines they need.” The company argues that it has to pay kickbacks to these middlemen to get its drugs on formularies — the list of drugs covered by insurance.
Jorgensen noted that the written commitment Sanders received from the PBM was “new information to me,” but said she understood “possibly the PBM changed its mind.”
Novo Nordisk claims it has spent billions of dollars on research, development and expanding manufacturing of its treatments, and is pouring even more money into researching potential treatments for other health conditions related to obesity. This investment has helped extend and improve the lives of millions of Americans and reduced health care costs related to obesity and diabetes, according to Jorgensen’s written testimony.
Novo Nordisk CEO Lars Jorgensen testifies about the U.S. price of weight-loss drugs Ozempic and Wegovi during a Senate Health, Education, Labor and Pensions Committee hearing on Capitol Hill in Washington, U.S., on September 24, 2024.
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Jorgensen said at the hearing that the company has fought to secure public and private insurance coverage for the drugs.
He also partly blamed the “complex American health care system” for making it difficult for patients to access affordable prescription drugs, saying, “No one company can solve such a broad and complex policy challenge alone.”
Jorgensen promised that Novo Nordisk “will continue to work with the committee on policy solutions to address the structural issues that are causing rising costs.”
But Jorgensen argued that lowering prices could have an impact, as it could lead to reduced insurance coverage.
In written testimony, Jorgensen said Novo Nordisk’s insulin product, Levemir, was previously available to 90 percent of U.S. patients through prescription, but after Novo Nordisk lowered its list price, insurers began dropping coverage for the insulin, resulting in it being available to only 36 percent of patients.
That ultimately caused the company to stop making insulin, Jorgensen said in written testimony.
Sanders and other lawmakers, medical experts and insurers say insatiable demand for Novo Nordisk’s drugs and for similar weight-loss and diabetes drugs from rivals is Eli Lilly If prices don’t come down, the U.S. health care system could collapse.
Both drug companies make GLP-1, which mimics a hormone produced in the gut to suppress a person’s appetite and regulate blood sugar levels. Eli Lilly’s weight-loss injectable Zepbound and diabetes drug Maunjaro cost similarly, about $1,000 a month, before insurance and other discounts.
The Senate Health Committee said in a release that if half of all Americans took Novo Nordisk Inc. and Eli Lilly Inc.’s weight-loss drugs, it would cost $411 billion a year — $5 billion more than Americans spent on all prescription drugs in 2022.
Medicare spent $4.6 billion on Ozempic in 2022 alone, according to health policy research institute KFF.
Other insurers and employers have implemented strict requirements to control the costs of weight-loss drugs or have dropped coverage for weight-loss therapies altogether. Many health plans cover GLP-1 drugs for diabetes treatment but not weight-loss therapies, and the federal Medicare program won’t pay for weight-loss therapies unless they’re approved and prescribed for another health condition.
The hearing came as the Biden administration and lawmakers from both parties are working to rein in U.S. health care costs, including by pressuring the pharmaceutical industry and middlemen in the drug supply chain. On average, Americans pay two to three times more for prescription drugs than patients in other developed countries, according to a White House fact sheet.
Notably, Ozempic is likely to be the subject of the next wave of price negotiations between drugmakers and Medicare, a key provision of President Joe Biden’s Control Inflation Act aimed at lowering costs for seniors. Wall Street analysts said Ozempic will likely be the subject of negotiations around the time the next drug is chosen in 2025, with price changes set to take effect in 2027.
The lawmakers called on Novo Nordisk to promise not to sue the federal government if Ozempic and Wegobi are selected for the next round of negotiations.
Jorgensen did not specify what that commitment was, but said the company believes the talks are “not fair negotiations, they’re actually price fixing” and will have a negative impact on pharmaceutical innovation.