Why Is Ozempic So Costly? Novo Nordisk Blames Prescription Drug Middlemen

Final week, a U.S. Senate panel questioned Novo Nordisk’s high govt concerning the excessive worth of the corporate’s blockbuster weight problems and diabetes medicines, Ozempic and Wegovy.

Novo Nordisk CEO Lars Fruergaard Jørgensen appeared earlier than the Senate Well being, Schooling, Labor, and Pensions Committee to elucidate why the medication value rather more in america than in different nations.

The committee acknowledged that the present listing worth for Wegovy is $137 monthly in Germany and $92 in the UK, in comparison with $1,349 within the U.S.

“The easy fact is that we pay by far the best costs on the earth for pharmaceuticals, and that is a significant component within the well being care disaster we expertise,” mentioned committee chair Senator Bernie Sanders.

In his opening statementsSanders mentioned he obtained written commitments from main “pharmaceutical middlemen”—together with UnitedHealth Group’s Optum, CVS Well being’s Caremark, and Cigna’s Categorical Scripts—that they’d not restrict entry to Ozempic and Wegovy if the drugmaker lowered their listing costs.

Who Are the ‘Middlemen?’ Meet PBMs

Pharmacy profit managers (PBMs), typically known as “middlemen,” act as intermediaries between medical insurance plans, drug producers, and pharmacies.

PBMs are incentivized to incorporate costly medication on their formularies—lists of pharmaceuticals coated by insurance coverage—to safe the best rebates. Pharmaceutical corporations argue that in the event that they cut back the listing worth of high-cost medication, PBMs would take away them because of decrease income, in the end limiting affected person entry.

However Sanders disagreed, stating, “If Novo Nordisk considerably lowered the listing worth for Ozempic and Wegovy, they’d not restrict protection. In truth, all of them instructed me they’d be capable to broaden protection to those medication if the listing worth was lowered.”

All through the assembly, Jørgensen expressed doubt that PBMs would proceed to incorporate Wegovy and Ozempic on their formularies if the listing costs have been minimize.

When requested for a dedication to reducing listing costs, Jørgensen mentioned that Novo Nordisk would “be completely happy to do something that helps sufferers” however that “the expertise we have now is one among dropping entry once we lower cost.”

The vast majority of committee members acknowledged the necessity for pharmaceutical corporations to achieve income to assist analysis and growth, however additionally they expressed frustration that the U.S. drug pricing system offers a lot energy to PBMs.

Why Does Insurance coverage Protection Fall Quick?

“It isn’t our intention that anybody pays the listing worth,” mentioned Jørgensen.

Jørgensen added that almost all U.S. business insurance policy now cowl Ozempic and round half cowl Wegovy. Greater than 80% of U.S. sufferers with insurance coverage protection for the medication pay lower than $25 for a month’s provide. Novo Nordisk additionally affords Ozempic at no cost to individuals who make lower than 400% of the annual poverty line—which is $120,000 per family.

Nonetheless, many individuals don’t have an insurance coverage plan that covers the medication properly—if in any respect. People who find themselves uninsured or have a high-deductible plan are nonetheless paying the total listing worth. If they’ve a co-payment, the value {that a} affected person pays will likely be based mostly on the listing worth of the drug, not the online worth.

Senator Ben Ray Luján mentioned that Black and Hispanic communities within the U.S. have greater charges of weight problems and kind 2 diabetes and still have decrease median family incomes, which solely worsens the divide in entry to those probably life-changing therapies.

What About Insulin and Medicare Worth Negotiation?

A number of senators questioned Jørgensen concerning the firm’s determination to cease producing Levemir, a long-acting insulin to deal with kind 1 and kind 2 diabetes. Novo Nordisk eliminated the drug from the market in February of this yr.

In his testimony on Tuesday, Jørgensen mentioned that slowing demand for Levemir made it unprofitable for the corporate to proceed making the drug.

Senator Hassen emphasised that some sufferers, together with many pregnant folks, who opted for Levemir now not have the choice.

Jørgensen mentioned that Novo Nordisk can be prepared to work with different producers in the event that they need to make Levemir however that no corporations have but to specific curiosity.

Final month, the Facilities for Medicare and Medicaid Safety introduced the outcomes of their first spherical of drug worth negotiations. The timing was of curiosity to those that are ready to see if there’s any likelihood of fashionable anti-obesity medication being included.

In a assertion launched earlier than the listening to, Jørgensen mentioned that it was seemingly Ozempic can be focused for its subsequent spherical of negotiations. When requested if he would decide to not presenting authorized challenges to negotiations, Jørgensen repeated the priority that decrease listing costs would trigger PBMs to keep away from together with the drug on their formularies.

“If it’s a actual negotiation, I assist that,” mentioned Jørgensen. “But when it’s worth setting, I believe it’ll have unintended destructive penalties” for sufferers’ entry and for innovation.