Novo Nordisk CEO testifies at Senate over weight reduction drug costs

Novo Nordisk‘s prime government confronted a Senate grilling on Tuesday over the excessive costs of the corporate’s weight reduction drug Wegovy and diabetes therapy Ozempic, as demand for each injections soars within the U.S. 

Novo Nordisk CEO Lars Fruergaard Jørgensen didn’t explicitly promise lawmakers at a Senate Well being, Training, Labor and Pensions Committee listening to in Washington, D.C., that he would slash costs for the 2 medication.

However Jørgensen stated he needs to work with them on coverage options that can handle the “structural points” that drive up prescription drug prices. He additionally dedicated to sitting down with pharmacy profit managers – middlemen who negotiate drug rebates with producers on behalf of insurers – to “collaborate on something that helps sufferers get entry and affordability.”

That pledge got here after Sen. Bernie Sanders, the Vermont unbiased who chairs the Senate panel, stated he acquired commitments in writing from the entire main PBMs that they might not restrict protection of Wegovy and Ozempic if Novo Nordisk lowered their checklist costs. The listening to comes roughly 5 months after Sanders opened an investigation into the Danish drugmaker’s pricing practices. 

“All we’re saying, Mr. Jørgensen, is deal with the American folks the identical method that you simply deal with folks all around the world,” Sanders stated through the listening to Tuesday. “Cease ripping us off.”

He famous that Novo Nordisk has raked in practically $50 billion in gross sales from Wegovy and Ozempic, with most of that income coming from the U.S. Sanders contends that Novo Nordisk prices Individuals considerably larger costs for its blockbuster medication than it does for sufferers in different nations. Earlier than insurance coverage, Ozempic prices practically $969 per 30 days and Wegovy prices virtually $1,350 per 30 days within the U.S. 

In the meantime, each remedies can value as little as below $100 for a month’s provide in some European nations, in response to a launch from the committee. Ozempic prices simply $59 in Germany, whereas Wegovy prices $92 within the U.Ok.

Sanders additionally stated final week that the CEOs of main generic pharmaceutical corporations have instructed him that they might promote a model of Ozempic for lower than $100 a month at a revenue. There are presently no generic options to Ozempic out there within the U.S. 

Main PBMs, together with UnitedHealth Group‘s Optum Rx and CVS‘ Caremark, and a few well being plans stated $100 month-to-month checklist costs for Wegovy and Ozempic would assist make these medication extra extensively out there to sufferers, in response to a launch from Sanders.

That might undercut Jørgensen’s declare in his written testimony that PBMs are accountable for the excessive checklist costs of Novo Nordisk’s medication and “train near-total management over the flexibility of a whole bunch of thousands and thousands of Individuals to get the medicines they want at reasonably priced costs.” The corporate has argued that it wants to have the ability to pay rebates to these middlemen to get their medication on formularies, or lists of medicines coated by insurance coverage.

Jørgensen famous that the written guarantees that Sanders acquired from PBMs are “new data to me,” however stated he understands “that maybe the PBMs have modified their minds.”

Novo Nordisk has argued that it has spent billions to analysis, develop and develop manufacturing for the remedies and is funneling extra money into researching their potential to deal with different obesity-related well being situations. That funding has prolonged and improved the lives of thousands and thousands of Individuals, which helps scale back the health-care prices related to weight problems and diabetes, in response to written testimony from Jørgensen.

Throughout the listening to, Jørgensen stated the corporate has fought to safe private and non-private insurance coverage protection for the medicines.

He additionally partly blamed the “complicated U.S. healthcare system” for making it troublesome for sufferers to entry reasonably priced pharmaceuticals, noting that “no single firm alone can remedy such huge and sophisticated coverage challenges.”

Jørgensen promised that Novo Nordisk will “stay engaged and work with this committee on coverage options to handle the structural points that drive up prices.”

However Jørgensen contended that decreasing costs might have penalties, saying it might result in much less insurance coverage protection.

In his written testimony, Jørgensen stated Novo Nordisk’s insulin product Levemir was beforehand out there to 90% of U.S. sufferers by way of formularies. However insurers started to drop protection of the insulin after Novo Nordisk reduce its checklist worth, resulting in solely 36% of sufferers having entry.

That ultimately drove the corporate to discontinue the insulin, Jørgensen stated in his written testimony.

Sanders and different lawmakers, well being specialists and insurers have warned that the insatiable demand for Novo Nordisk’s medication and related weight reduction and diabetes remedies from rival Eli Lilly might doubtlessly bankrupt the U.S. health-care system until costs drop.

Each drugmakers make GLP-1s, which mimic hormones produced within the intestine to tamp down an individual’s urge for food and regulate their blood sugar. Eli Lilly’s weight reduction injection Zepbound and diabetes drug Mounjaro equally value round $1,000 per 30 days earlier than insurance coverage and different rebates.

In a launch, the Senate Well being Committee stated it will value the U.S. $411 billion per yr if half of all Individuals took weight reduction medication from Novo Nordisk and Eli Lilly. That is $5 billion greater than what Individuals spent on all pharmaceuticals in 2022. 

Medicare spent $4.6 billion on Ozempic in 2022 alone, in response to well being coverage analysis group KFF. 

Different insurers and employers have applied strict necessities to regulate weight reduction drug prices, or have dropped protection of these remedies altogether. Many well being plans cowl GLP-1s for diabetes, however not for weight reduction. The federal Medicare program would not pay for weight reduction remedies until they’re authorised and prescribed for an additional well being situation. 

The listening to comes because the Biden administration and lawmakers on either side of the aisle attempt to rein in health-care prices within the U.S., partly by pressuring the pharmaceutical business and drug provide chain middlemen. On common, Individuals pay two to a few occasions greater than sufferers in different developed nations for pharmaceuticals, in response to a truth sheet from the White Home.

Notably, Ozempic will possible be topic to the following spherical of worth negotiations between producers and Medicare — a key provision of President Joe Biden’s Inflation Discount Act that goals to decrease prices for seniors. Wall Avenue analysts say Ozempic will possible be eligible for negotiations by the point the following spherical of medicine is chosen in 2025, for worth adjustments that can go into impact in 2027.

Lawmakers requested Novo Nordisk to decide to not suing the federal authorities if Ozempic and Wegovy are chosen for the following spherical of negotiations.

Jørgensen didn’t explicitly make that dedication, noting that the corporate believes the talks are “not a good negotiation, however truly price-setting” that can have damaging penalties for drug innovation.