51˶

'Stop Ripping Us Off': Senate Goes After Ozempic-Maker Over Pricing

— Novo Nordisk needs to cut prices, says Sen. Bernie Sanders

Last Updated September 25, 2024
MedpageToday
A screenshot of Committee Chair Bernie Sanders speaking during this hearing.

Sen. Bernie Sanders (I-Vt.) on Tuesday challenged Novo Nordisk's CEO to lower the cost of semaglutide (Ozempic, Wegovy) during a Senate Health, Education, Labor and Pensions (HELP) Committee .

Sanders, the chair of the committee, noted that in the U.S. -- even after factoring in rebates that pharmacy benefit managers (PBMs) receive -- the net price of Ozempic (marketed for diabetes) is still . That's more than nine times what the drug costs in Germany, he argued, adding that the estimated net price of Wegovy (marketed for obesity) is more than $800, which is more than 4.5 times the drug's cost in Denmark.

PBMs are middlemen that manage a prescription drug plan for insurers and negotiate drug prices with pharmaceutical companies, in the process taking a share of the drug's list price.

Sanders highlighted that over 190 million people with health insurance don't have coverage of semaglutide for weight loss through their plans. He said he'd received a urging Congress to make semaglutide more affordable. The letter noted that many low-income and minority patients will unnecessarily die, or see a significant decline in their quality of life, if they are unable to fill their prescriptions for semaglutide, Sanders said.

If the GLP-1 receptor agonist and other weight-loss drugs were affordably priced and widely accessible, more than 40,000 lives in the U.S. could be saved, he added, citing that analyzed semaglutide-based secondary cardiovascular disease prevention within the trial.

Semaglutide is the first medication to treat weight loss that has also been approved to help prevent major heart events in adults with a history of cardiovascular disease and obesity or overweight.

"Nobody here is asking Novo Nordisk to provide charity to the American people," Sanders said, noting that a indicated the company has made $52.6 billion in profits since 2018.

"All we are saying [to Novo Nordisk] is, Treat the American people the same way that you treat people all over the world. Stop ripping us off," Sanders said.

CEO Punts to PBMs

Novo Nordisk CEO Lars Fruergaard Jorgensen defended the company, emphasizing the amount of time that went into developing the agent. Development of GLP-1 agonists got underway in the early 1990s, and it was hardly smooth sailing, he emphasized. It took until 2004 to develop semaglutide, then more than a decade before injectable semaglutide received FDA approval for type 2 diabetes, and another 4 years before semaglutide was greenlit as a weight-loss drug.

Jorgensen said that, since 2023, the company has earmarked $30 billion to expand its manufacturing capacity, with the bulk of that investment focused on producing more GLP-1 medications.

Moreover, semaglutide for diabetes is covered by 99% of commercial health plans and by Medicare and by Medicaid in 50 states. And even though semaglutide for weight loss was only granted FDA approval in 2021, it is already covered by half of all commercial plans, over 20 state Medicaid plans, the Department of Veterans Affairs, the military, the Indian Health Service, and for all federal employees.

He stressed that 80% of insured Americans can access these medications for $25 or less for each prescription and 90% pay less than $50.

Sanders countered that many of those same patients also pay "outrageously high" premiums to insurance companies to cover those drugs. "This is a pass-through to the insurance companies," he said.

Jorgensen disputed this idea. He noted that the net price -- the amount Novo Nordisk receives -- has actually dropped roughly 40% since Ozempic came to market in 2018. Additionally, patients on Medicare, where there is broad coverage of semaglutide for type 2 diabetes, have not seen premiums rise over that period, he said.

As for PBMs, they, along with insurance companies, have "close to tripled" their profits, Jorgensen said. He argued that Novo Nordisk doesn't set the drug price for patients. "That's set by insurance companies," he said, noting that for uninsured patients and/or those with low incomes, Novo Nordisk offers patient access programs.

Sanders countered that HELP has spoken to insurers and to PBMs, all of whom point fingers at each other. He also noted that Jorgensen expressed concern previously that a lower list price for semaglutide might make PBMs limit access or keep the drug off of their formularies.

Sanders said he had a written commitment from the three largest PBMs in the U.S. that they would take neither of the latter actions if the list-price was dropped. He asked Jorgensen: "Will you commit today that Novo Nordisk will substantially reduce the list price of these drugs in the United States, so that the American people are not paying ... far higher prices for these drugs from the people of Europe or in Canada?"

Jorgensen responded that the PBMs promise was "new information ... anything that will help patients get access to affordable medicine, we will be happy to look into."

He said that in Novo Nordisk's experience, PBMs will limit access, which was the case for insulin detemir (Levemir). In a 2023 , Jorgensen explained that before Novo Nordisk lowered Levemir's price in January 2024, it was available to 90% of U.S. patients -- that figure dropped to 36%. The "loss of access to the vast majority of patients in the U.S. was a fundamental consideration in our decision to discontinue the medication," he wrote.

That said, at Sanders request, Jorgensen agreed to sit down with the three PBMs and the HELP chair himself to ensure that PBMs keep their commitment to preserving access to the GLP-1 agonist.

It's expected that semaglutide for diabetes could be subject to the of .

'That's Fantasy Land'

A handful of HELP members -- mainly Republicans -- defended Novo Nordisk.

The drugmaker "is not the villain in this story," said Sen. Roger Marshall, MD (R-Kan.). He pointed out that America spends anywhere from $250 to $350 billion a year treating type 2 diabetes. "Who's making the money?" he said, charging that the PBMs eat up 76% of the profits in the system. In his written testimony, Jorgensen stated that 75 cents of every dollar of medicine sold is taken up by rebates, discounts, and fees.

Marshall urged Sanders to bring the PBM reform bills previously introduced by committee members back for a mark-up. He included among these with Sens. Tim Kaine (D-Va.) and Jon Tester (D-Mont.) to eliminate the incentives for PBMs to drive up prices by prohibiting the middlemen from making more money off high-cost drugs than they do on lower-cost ones.

Sen. Mitt Romney (R-Utah) also blamed the complexity of the PBM system and "the opaque nature of our pricing," for the high cost of drugs in the U.S. He added that expecting industry to invest massive sums of money in innovation, but also keep prices low, is unrealistic.

"That's fantasy land," he said.

  • author['full_name']

    Shannon Firth has been reporting on health policy as 51˶'s Washington correspondent since 2014. She is also a member of the site's Enterprise & Investigative Reporting team.