Novo Nordiskits top executive faced a Senate on the grill on Tuesday due to high prices of the company’s weight loss drug Wegovy and diabetes treatment Ozempic as demand for both injections soars in the U.S.
Novo Nordisk CEO Lars Fruergaard Jørgensen made no explicit promises lawmakers on the Senate Health, Education, Labor and Pensions Committee hearing in Washington, DC, that it would lower prices for the two drugs.
But Jørgensen said he wants to work with them on policy solutions that address the “structural issues” that drive up prescription drug costs. He also pledged to meet with pharmacy benefit managers – middlemen who negotiate drug discounts with manufacturers on behalf of insurance companies – to “collaborate on anything that helps patients have access and affordability.”
That commitment came after Sen. Bernie Sanders, the Vermont independent who chairs the Senate committee, said he had received written commitments from all major PBMs that they would not cut coverage for Wegovy and Ozempic if Novo Nordisk lowered list prices. their. The hearing comes about five months after Sanders opened an investigation into the Danish drugmaker’s pricing practices.
“All we’re saying, Mr. Jørgensen, is treat the American people the same way you treat people around the world,” Sanders said during Tuesday’s hearing. “Stop ripping us off.”
He noted that Novo Nordisk has collected nearly $50 billion in sales from Wegovy and Ozempic, with most of that revenue coming from the US. Sanders argues that Novo Nordisk charges Americans significantly higher prices for its blockbuster drugs than it charges patients in other countries. Before insurance, Ozempic costs approx $969 per month and Wegovy costs approx $1,350 per month in the USA
US Senator Bernie Sanders (I-VT) speaks during Novo Nordisk CEO Lars Jorgensen’s hearing before a Senate Health, Education, Labor and Pensions Committee on US prices for weight loss drug Ozempic and Wegovy, on Capitol Hill in Washington, USA, September 24, 2024.
Piroschka Van De Wouw | Reuters
Meanwhile, both treatments can cost less than $100 for a month’s supply in some European countries, according to a statement from commission. Ozempic costs just $59 in Germany, while Wegovy costs $92 in the UK
Sanders also said last week that CEOs of major generic drug companies told him they could sell a version of Ozempic for less than $100 a month with profit. There are currently no generic alternatives to Ozempic available in the US
Major PBMs, incl UnitedHealth Group‘s Optum Rx and CVSCaremark and some health plans said the $100 monthly list prices for Wegovy and Ozempic would help make these drugs more widely available to patients, according to release from Saunders.
That could undermine Jørgensen’s contention in his written testimony that PBMs are responsible for the high list prices of Novo Nordisk’s drugs and “exercise near-total control over the ability of hundreds of millions of Americans to get the drugs they need at affordable prices.” The company has argued that it should be able to pay rebates to these middlemen to get their drugs on formularies or on insurance-covered drug lists.
Jørgensen noted that the written pledges Sanders received from PBMs are “new information to me,” but said he understands “that maybe the PBMs have changed their minds.”
Novo Nordisk has said it has spent billions on research, development and expanding production for the treatments and is pouring more money into researching their potential to treat other obesity-related health conditions. This investment has extended and improved the lives of millions of Americans, which helps reduce health care costs associated with obesity and diabetes, according to Jørgensen’s written testimony.
Novo Nordisk CEO Lars Jorgensen testifies before a Senate Health, Education, Labor and Pensions Committee hearing on US prices for weight loss drugs Ozempic and Wegovy, on Capitol Hill in Washington, US, September 24, 2024 .
Piroschka Van De Wouw | Reuters
During the hearing, Jørgensen said the company has struggled to secure public and private insurance coverage for the drugs.
He also partly blamed the “complex US health care system” for making it difficult for patients to access affordable prescription drugs, noting that “no single company can solve such enormous and complex policy challenges.”
Jørgensen promised that Novo Nordisk “will remain engaged and work with this committee on policy solutions to address the structural issues that drive up costs.”
But Jørgensen argued that lowering prices could have consequences, saying it could lead to less insurance coverage.
In his written statement, Jørgensen said that Novo Nordisk’s insulin product Levemir was previously available to 90% of patients in the US through formulations. However, insurance companies began to reduce insulin coverage after Novo Nordisk’s list price was reduced, leaving only 36% of patients with access.
That eventually led the company to discontinue the insulin, Jørgensen said in his written statement.
Sanders and other lawmakers, health experts and insurers have warned that insatiable demand for Novo Nordisk’s drugs and similar weight-loss and diabetes treatments from rival Eli Lilly could potentially bankrupting the US health care system unless prices fall.
Both drugs produce GLP-1, which mimics hormones produced in the gut to reduce a person’s appetite and regulate their blood sugar. Eli Lilly’s weight-loss injection Zepbound and diabetes drug Mounjaro similarly cost about $1,000 a month before insurance and other discounts.
In a statement, the Senate Health Committee said it would cost the US $411 billion a year if half of Americans took weight-loss drugs from Novo Nordisk and Eli Lilly. That’s $5 billion more than Americans spent on all prescription drugs in 2022.
Spent medicine $4.6 billion in Ozempic only in 2022, according to the health policy research organization KFF.
Other insurers and employers have implemented strict requirements to control the cost of weight loss drugs or stopped covering these treatments altogether. Many health plans cover GLP-1 for diabetes, but not for weight loss. The federal Medicare program does not pay for weight loss treatments unless they are approved and prescribed for another health condition.
The hearing comes as the Biden administration and lawmakers on both sides of the aisle try to rein in U.S. health care costs, in part by lobbying pharmaceutical industry and drug supply chain intermediaries. On average, Americans pay two to three times more than patients in other developed countries for prescription drugs, according to newsletter from the White House.
In particular, Ozempic will likely be subject to the next round of price negotiations between manufacturers and Medicare — a key provision of President Joe Biden’s inflation-reduction law aimed at lowering costs for seniors. Wall Street analysts say Ozempic will likely be eligible for negotiations until the next round of drugs is selected in 2025, for price changes to take effect in 2027.
Lawmakers asked Novo Nordisk to pledge not to sue the federal government if Ozempic and Wegovy are chosen for the next round of negotiations.
Jørgensen did not explicitly make that commitment, noting that the company believes the talks are “not a fair negotiation, but actually price-fixing” that will have negative consequences for drug innovation.
