Novo Nordisk’s CEO, Lars Fruergaard Jørgensen, is scheduled to testify before the Senate Health, Education, Labor and Pensions Committee about the high prices of the company’s weight loss drug Wegovy and diabetes treatment Ozempic. This hearing, occurring at 10 a.m. ET in Washington, D.C., follows an investigation initiated by Senator Bernie Sanders into the pricing practices of the Danish pharmaceutical company.
Senator Sanders claims that Novo Nordisk imposes significantly higher prices on American consumers compared to patients in other countries. In the U.S., the cost of Ozempic is approximately $969 per month, and Wegovy is nearly $1,350 per month before insurance. Conversely, in some European nations, the same treatments are priced drastically lower; Ozempic costs $59 in Germany, and Wegovy is $92 in the U.K.
Last week, Sanders reported that CEOs from leading generic pharmaceutical firms expressed their capacity to sell a generic version of Ozempic in the U.S. for under $100 per month. However, currently, there are no generic alternatives available for Ozempic in the U.S.
The high demand for Novo Nordisk’s and other similar treatments from competitors such as Eli Lilly is raising concerns among lawmakers, health experts, and insurers about the potential financial strain on the U.S. healthcare system. Eli Lilly’s weight loss injection Zepbound and diabetes drug Mounjaro also cost about $1,000 per month before insurance and rebates.
According to a Senate Health Committee release, the annual cost to the U.S. would be $411 billion if half of the American population used weight loss drugs from Novo Nordisk and Eli Lilly, exceeding the total spending on all prescription drugs in 2022 by $5 billion. In 2022 alone, Medicare’s expenditure on Ozempic amounted to $4.6 billion, as reported by health policy research organization KFF.
Insurers and employers are setting stringent criteria to control the costs associated with weight loss drugs, with some even eliminating coverage for these treatments altogether. While many health plans cover GLP-1s for diabetes, coverage for weight loss purposes is less common. The federal Medicare program only funds weight loss treatments if they are approved and prescribed for another medical condition.
The hearing aligns with efforts from the Biden administration and lawmakers from both major political parties to curb healthcare costs in the U.S. by targeting the pharmaceutical industry and middlemen in the drug supply chain. On average, Americans pay two to three times more for prescription medications compared to patients in other developed countries, according to a White House fact sheet.
Ozempic is likely to be included in the next round of Medicare price negotiations as part of President Joe Biden’s Inflation Reduction Act, aimed at reducing costs for seniors. Analysts predict that Ozempic will be eligible for these price negotiations by 2025, with the changes expected to take effect in 2027.
