Ozempic, Wegovy are miracle drugs priced out of reach of patients, senators say

Novo Nordisk President and CEO Lars Fruergaard Jørgensen testifies in a hearing of the Senate Committee on Health, Education, Labor & Pensions held Sept. 24, 2024, to examine high prices of the new blockbuster drugs Ozempic and Wegovy.

The game-changing drugs Ozempic and Wegovy can save lives and improve patients’ quality of life if they are priced affordably, said the leader of a Senate committee demanding answers for high pharmaceutical prices.

On Sept. 24, the Senate Committee on Health, Education, Labor & Pensions convened the hearing, “Why Is Novo Nordisk Charging Americans with Diabetes and Obesity Outrageously High Prices for Ozempic and Wegovy?” Novo Nordisk President and CEO Lars Fruergaard Jørgensen was the sole witness in a hearing that lasted about two hours.

Senators acknowledged the U.S. pharmaceutical market has new miracle medicines, including semaglutide, the glucagon-like peptide-1 receptor agonist (GLP-1 RA) drug that Novo Nordisk sells as Ozempic for Type 2 diabetes (T2D) and as Wegovy for obesity. The medicines can improve patient health, but that also empty their pocketbooks.

There could be a new factor in setting prices for the drugs. Based on the list prices, Novo Nordisk leadership may fear lower U.S. prices could lead to pharmacy benefit managers limiting coverage of the drugs, said HELP Committee Chair Sen. Bernie Sanders (I-Vermont). He announced written commitments from all of the major PBMs that if Novo Nordisk substantially reduces list prices, the PBMs will expand coverage, not limit it, he said.

CEO speaks

As a company, Novo Nordisk was created to find treatments and ultimately a cure for diabetes, Jørgensen said. Its foundation is one of the three largest in the world and remains the business’ major shareholder, while supporting initiatives that improve health and sustainability of the planet, he said.

He traced the development of the drugs from the 1990s and the tests and approval path that led to Ozempic and Wegovy were approved. The medicines can reduce the risk of major cardiovascular events and there are trials to see how they may affect chronic kidney disease, liver disease and Alzheimer disease.

It cannot take 50 years to advance the science and manufacturing capacity to meet current demands, so Novo Nordisk is committing more than $30 billion to expand manufacturing ability – more than the budget of the U.S. space program, Jørgensen said. Across health insurance, coverage is expanding for the drugs, he added.

“With that said, it is clear that patients too often struggle to navigate the complex U.S. health care system,” he said. “It is also clear that no single company alone can solve such large and complicated policy changes. So what I can promise is that Novo Nordisk will remain engaged and work with this committee on policy should address the structural issues that harm patients and drive up costs.”

The company will never stop its research to defeat serious chronic diseases like obesity, Jørgensen said.

Insurance for access

Without vital medications, people could die, Sanders said, and he asked Jørgensen if this was acceptable to him.

“The prospects of patients not getting access to the medicine they need, I think, is, is terrifying, and we have to solve this challenge together,” Jørgensen said. But no single company can do it alone, he added.

Drug prices are set by insurance companies. Novo Nordisk has support programs for people with no insurance or poor insurance, but those are not a real solution because T2D and obesity are complex diseases that require access to physicians, Jørgensen said.

“I strongly believe we need to solve this within insurance, and when you are in insurance, there is access to our medicine,” he said.

A cash cow for drug makers

In the American health care system, some factors influencing drug prices are complicated, but they shouldn’t be, said Sanders. He started with a poster showing prices of Ozempic: $71 in France, $59 in Germany, $122 in Denmark, $155 in Canada, $969 a month in the United States. Wegovy costs $92 in the United Kingdom, $137 in Germany, $186 in Denmark, $265 in Canada, and $1,349 a month in the United States. The nation has become the cash cow for Novo Nordisk, he said.

Citing sources from scientific research to billionaire businessman Elon Musk to President Joe Biden, Sanders described the transformative new treatments that have potential to help patients control weight and T2D. But that means little if people cannot afford them. Ozempic and Wegovy are on track to become some of the best-selling and most profitable drugs in the history of the pharmaceutical industry, Sanders said.

“Let's be clear: The outrageous high cost of Ozempic, Wegovy, and other prescription drugs is directly related to the broken, dysfunctional and cruel health care system in our country,” he said. “While the current system makes huge profits for large drug companies like Novo Nordisk, huge profits for insurance companies and huge profits for PBMs, it is failing the needs of ordinary Americans.”

He had a plea to Jørgensen: After pocketing billions from sales of the drugs, treat the American people the same way the company treats people all over the world. “Stop ripping us off,” Sanders said.

A physician’s perspective

In the nation, nearly one in three people live with obesity, one in 10 with T2D, said Sen. Bill Cassidy, MD (R-Louisiana). Those diseases lead to more chronic conditions, and it will be almost impossible to bring down American health care spending without addressing them, he said.

There is a tension in the nation right now, Cassidy said.

“Let me say, without a profit motive, without something in return, it's unclear that these drugs, or any drug, is going to be developed,” Cassidy said. “There is a tension, a tension between the need to incentivize innovation and the ability to afford that innovation. And we are here struggling with that balance.”

Citing his experience in medical school, Cassidy said surgery was the common cure for peptic ulcer disease. Then Tagamet (cimetidine) was created, and within six months that surgery became rare. Now that drug is sold over the counter, he said.

If new drug development stops, cancer won’t be cured, Alzheimer disease won’t be cured, and there won’t be improvements to the drugs now used for obesity and complications of metabolic syndrome, Cassidy said.

Sanders and Cassidy both cited the role of pharmacy benefit managers in influencing drug prices in the nation.

Senators have questions

The senators had a number of questions for Jørgensen and at times they railed against high drug prices, PBMs, and the convoluted nature of the health care economy.

Sen. Susan Collins (R-Maine) asked how to get patients relief at the pharmacy counter. Jørgensen said insurance companies own PBMs and have a number of legal entities to extract fees from the U.S. health care system. When drug list prices are higher, they collect more fees – to an average of 74 cents for every dollar that Novo Nordisk makes, he said.

The drugs represent a huge part of the monthly income of people in New Mexico and of Hispanic Americans, said Sen. Ben Ray Lujan (D-New Mexico). He described a constituent, a mother of three, who was prescribed Wegovy and Ozempic, but who must go without it due to high costs. Jørgensen noted it is not the company’s intention that anyone should pay the list price of the drugs, but those are starting points for negotiating prices with PBMs. He repeated the point in questioning from Sen. Ted Budd (R-North Carolina).

Sen. Tammy Baldwin (D-Wisconsin) asked about Novo Nordisk’s commitment to making insulin, or if the new GLP-1 drugs would displace that production. After a 100-year history in diabetes, the company continues its research on insulin and remains committed to that, Jørgensen said. However, prices are dropping and it’s difficult for new companies to begin production because they cannot get on drug formularies, he said.

Sen. Roger “Doc” Marshall, MD (R-Kansas), displayed a poster showing the PBMs’ cut, or 74 cents of every dollar spent on pharmaceuticals.

“Novo Nordisk is not the villain in this story,” Marshall said. “They’re a hero. They should be here celebrating this miracle innovation that's responding to this diabetic epidemic we have in this country. It's a miracle drug.”

The real villains are the PBMs that made $800 billion in gross revenue last year, Marshall said. He criticized Big Pharma for its marketing “so good, there’s people on this drug that shouldn’t be on it and are being taken advantage of.”

Sen. Maggie Hassan (D-New Hampshire) asked about pricing and formulary access. In developing new drugs, it is “living in fantasy land” to expect pharmaceutical companies to invest huge amounts of money, then keep the prices low, said Sen. Mitt Romney (R-Utah). When he asked why the American prices are so out of line with the rest of the world, Jørgensen pointed to the complexity of the pricing system.

Sen. John Hickenlooper (D-Colorado) suggested combining the drugs with coaching and nutrition programs for patients. He compared the pharmaceutical industry to the early days of the auto industry, when Henry Ford cut prices but increased sales volume and dramatically succeeded.

Pharmaceuticals research and produce life-saving drugs and are profitable, while PBMs do not research or produce life-saving drugs and are super-duper profitable. They are getting away scott free in the discussion, said Sen. Tim Kaine (D-Virginia).

The system is broken with no transparency, no competition, with barriers to entry and with consumers who don’t have the tools to measure what the best value is, said Sen. Mike Braun (R-Indiana). He asked if Novo Nordisk makes a profit selling Ozempic for $87 in Australia and $936 in the United States. Jørgensen said yes, but the company does not bring in $936 per prescription.

Braun suggested the pharmaceuticals disassemble PBMs, but Jørgensen said it is difficult because they control what insurance is placed in front of patients.

Braun claimed the system is screwed up. Sanders countered it is set up for pharmaceuticals to be enormously profitable. He cited earlier remarks by Romney, who also asked about lower prices in Europe.

“In the United States of America, we are the only major country on earth that does not, has not negotiated prices,” Sanders said. “So you can charge us any price that you want, other drug companies can charge us any prices that they want, as much as the market will bear. And that’s what you do, understandably. You charge us far more than other countries because they negotiate and regulate prices.”