Novo NordiskThe company's top executive faced Senate questioning on Tuesday about the high prices of the company's weight-loss drug Wegovy and diabetes drug Ozempic, as demand for both injections soars in the United States.
Lars Fruergaard Jørgensen, CEO of Novo Nordisk, made no explicit commitment At a hearing of the Senate Committee on Health, Education, Labor and Pensions in Washington, DC, he told lawmakers that he would lower the prices of the two drugs.
But Jørgensen said he wanted to work with them on policy solutions that address the “structural problems” that drive up prescription drug costs. He also promised to sit down with pharmacy benefit managers – middlemen who negotiate drug discounts with manufacturers on behalf of insurers – to “work together on anything that will give patients access and affordability to medicines.”
The commitment came after Senator Bernie Sanders, the independent senator from Vermont who chairs the Senate committee, said he had received written commitments from all major PBMs that they would not limit coverage of Wegovy and Ozempic if Novo Nordisk lowered its list prices. The hearing comes about five months after Sanders launched an investigation into the Danish pharmaceutical company's pricing practices.
“All we're saying, Mr. Jørgensen, is that you should treat the American people the same way you treat people around the world,” Sanders said during Tuesday's hearing. “Stop ripping us off.”
He pointed out that Novo Nordisk has generated nearly $50 billion in revenue from Wegovy and Ozempic, with the majority of that revenue coming from the United States. Sanders claims that Novo Nordisk charges Americans substantially higher prices for its blockbuster drugs than patients in other countries. Before insurance costs, Ozempic costs nearly $969 per month in the United States and Wegovy costs nearly $1,350 per month.
U.S. Senator Bernie Sanders (I-VT) speaks during the hearing of Novo Nordisk CEO Lars Jorgensen before the Senate Committee on Health, Education, Labor and Pensions on the U.S. pricing of the weight loss drugs Ozempic and Wegovy on Capitol Hill in Washington, U.S., September 24, 2024.
Piroschka Van De Wouw | Reuters
In some European countries, both treatments can now be offered for less than $100 per month's supply, according to a press release from the committee. Ozempic costs just $59 in Germany, while Wegovy costs $92 in the UK.
Sanders also said last week that CEOs of major generic pharmaceutical companies have told him they could sell a version of Ozempic for less than $100 a month at a profit. There are currently no generic alternatives to Ozempic available in the United States.
Large PBMs, including UnitedHealth Group's Optum Rx and CVCaremark and some health insurers said a list price of $100 per month for Wegovy and Ozempic would help make those drugs more available to patients, Sanders said in a news release.
That could undermine Jørgensen's claim in his written testimony that the PBMs are responsible for the high list prices of Novo Nordisk's drugs and “exercise almost total control over ensuring that hundreds of millions of Americans get the medicines they need at affordable prices.” The company argues that it must be able to pay rebates to these middlemen to get their drugs on drug lists, or lists of drugs covered by insurance companies.
Jørgensen noted that the written promises Sanders received from the PBMs were “new information to me,” but said he could understand “that the PBMs may have changed their minds.”
Novo Nordisk argues that it has invested billions in researching, developing and expanding production of these drugs, and is pouring even more money into researching their potential to treat other obesity-related diseases. This investment has extended and improved the lives of millions of Americans, helping to reduce health care costs associated with obesity and diabetes, according to Jørgensen's written testimony.
Lars Jorgensen, CEO of Novo Nordisk, testifies before the U.S. Senate Health, Education, Labor, and Pensions Committee on the U.S. pricing of the weight loss drugs Ozempic and Wegovy on Capitol Hill in Washington, U.S., September 24, 2024.
Piroschka Van De Wouw | Reuters
During the hearing, Jørgensen said the company had fought to have the drugs covered by public and private health insurers.
He also blamed the “complex U.S. health care system” in part for making it difficult for patients to get affordable prescription drugs, noting that “no single company alone can solve such enormous and complicated policy challenges.”
Jørgensen promised that Novo Nordisk would “remain committed and work with this committee on policy solutions to address the structural problems that are driving up costs.”
However, Jørgensen believed that a price reduction could have consequences as it could lead to a reduction in insurance coverage.
In his written testimony, Jørgensen said Novo Nordisk's insulin product, Levemir, was previously available to 90 percent of U.S. patients through drug lists. But after Novo Nordisk lowered the list price, insurers began to stop covering the insulin, leaving only 36 percent of patients with access.
This ultimately prompted the company to stop producing 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 drugs from rival Eli Lilly could potentially bankrupt the US healthcare system if prices do not fall.
Both drug companies make GLP-1 drugs that mimic hormones produced in the gut to curb appetite and regulate blood sugar. Eli Lilly's weight-loss injection Zepbound and diabetes drug Mounjaro also cost around $1,000 a month, before insurance and other subsidies.
In a press release, the Senate Health Committee said it would cost the U.S. $411 billion a year if half of all Americans took weight-loss drugs made by Novo Nordisk and Eli Lilly. That's $5 billion more than Americans will spend on all prescription drugs in 2022.
According to health policy research organization KFF, Medicare spent $4.6 billion on Ozempic in 2022 alone.
Other insurers and employers have implemented strict requirements to control the cost of weight-loss drugs or have stopped covering these treatments altogether. Many health plans cover GLP-1 drugs for diabetes but not for weight loss. The federal Medicare program does not cover weight-loss treatments unless they are approved and prescribed for another condition.
The hearing comes as the Biden administration and lawmakers on both sides seek to contain health care costs in the United States, 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 industrialized countries, according to a White House fact sheet.
Notably, 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 Act 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 that take effect in 2027.
The lawmakers called on Novo Nordisk to commit not to sue the federal government if Ozempic and Wegovy are selected for the next round of negotiations.
Jørgensen did not make this commitment explicit, noting that the company believes the talks are “not fair negotiations, but in reality price fixing” that will have negative consequences for drug innovation.
