The CEO of Novo Nordisk has been grilled over the company’s high prices for weight loss and diabetes drugs.
Lars Fruergaard Jorgensen faced intense scrutiny from the Senate Health, Education, Labor, and Pensions Committee over the cost of the popular weight loss drug Wegovy and diabetes treatment Ozempic.
The hearing comes amid rising concerns over soaring drug costs in the US, as demand for both treatments continues to surge.
Jørgensen stopped short of promising to slash prices. However, he expressed willingness to collaborate with policymakers to address “structural issues” driving up prescription drug costs.
He also agreed to engage with pharmacy benefit managers (PBMs) to improve patient access and affordability.
Senator Sanders’ Strong Words
Senator Bernie Sanders, chairing the Senate panel, called for fair treatment of American consumers, stating: “Stop ripping us off.”
He pointed out Novo Nordisk has earned nearly $50 billion from Wegovy and Ozempic. The majority comes from US sales.
Sanders claimed Americans are charged significantly more than patients in other countries.
The Price Gap and PBM Influence
Before insurance, Ozempic costs nearly $969 per month. Wegovy reaches almost $1,350 in the U.S., compared to as little as under $100 in some European countries.
Sanders revealed CEOs of major PBMs, such as Optum Rx and CVS’ Caremark, have agreed to not restrict coverage if Novo Nordisk reduces prices to $100 per month, a substantial drop from current rates.
This revelation challenges Jørgensen’s assertion PBMs are largely responsible for the high prices due to the rebates they demand.
Novo Nordisk argues that these rebates are necessary to ensure their drugs are included in formularies covered by insurance.
The Role of Research and Investment
Jørgensen defended the company’s pricing strategy. He cited billions spent on research, development, and manufacturing for their treatments.
He emphasized this investment has improved the lives of millions of Americans. This has potentially lowered healthcare costs associated with obesity and diabetes.
Jørgensen also suggested that the complex U.S. healthcare system contributes to the challenge of making prescription drugs affordable, noting that no single company can address these systemic issues alone.
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The Risk of Lower Prices
While Jørgensen committed to working with policymakers on solutions, he cautioned that reducing prices could lead to less insurance coverage.
He cited Novo Nordisk’s experience with its insulin product Levemir, which lost coverage for many patients after the company cut its list price, ultimately leading to its discontinuation.
The Financial Impact and Future Implications
The hearing comes as concerns grow over the potential financial impact of weight loss drugs on the U.S. healthcare system.
If half of all Americans used weight loss treatments from Novo Nordisk and rival Eli Lilly, the Senate Health Committee estimated it would cost $411 billion per year, exceeding total prescription drug spending in 2022.
Lawmakers are pressing to rein in healthcare costs, partly by targeting the pharmaceutical industry and middlemen in the drug supply chain.
Ozempic may soon face price negotiations with Medicare under the Inflation Reduction Act, aiming to reduce costs for seniors.
Looking Ahead: A Call for Change
The Senate’s grilling of Novo Nordisk’s CEO signals a broader push to address high prescription drug prices in the U.S.
The outcome of these discussions may have a lasting impact on the pharmaceutical industry and the affordability of essential medications for millions of Americans.
