"Unrelenting Desire for Profit": Sanders Calls for Reduction in Ozempic Producer's Costs
From an ethical standpoint, does it bother you knowing that keeping the cost of Ozempic and Semaglutide (Wegovy's generic name) excessively high in the U.S. could potentially result in the avoidable loss of lives for numerous Americans? This was the question posed by Senator Bernie Sanders, who chairs the U.S. Senate Health, Education, Labor, and Pensions Committee, to the CEO of Novo Nordisk, Lars Fruergaard Jorgensen. Sanders based his concern on research conducted by a Yale epidemiologist.
Jorgensen responded by expressing Novo Nordisk's dedication to ensuring that Americans have access to their medicines at an affordable price point. He further stated that there's nothing they would rather see happen.
This exchange marked the latest in a series of hearings led by Sanders with pharmaceutical company CEOs, addressing the exorbitantly high prices of medications in the U.S. – often more than twice that of other prosperous nations. Notably, Novo Nordisk's Ozempic, intended for diabetes management, and its sibling drug, Wegovy, for weight loss and heart risk reduction, have garnered significant attention. Although these drugs are now used by millions of Americans, they remain unaffordable and inaccessible for many.
In April, Sanders initiated an investigation into Novo Nordisk over what he called excessive prices for these medications in the U.S. He focused on the drugs' comparative cost in other nations, highlighting that a 4-week supply of Ozempic costs $969 in the U.S., while it can be purchased for $155 in Canada, $122 in Denmark, and $59 in Germany. Similarly, Wegovy's list price is $1,349 in the U.S., but in Denmark, Germany, and the United Kingdom, it costs $186, $140, and $92, respectively.
Tuesday's hearing centered around the familiar debate over who holds responsibility for the U.S.'s higher prices – drug companies that set initial prices or pharmacy benefit managers, who bargain discounts on these prices in exchange for favorable insurance coverage and patient access.
Jorgensen stated that Novo Nordisk reimburses approximately 75% of its medication sales through rebates, discounts, and fees, resulting in a net price significantly lower than the list price. He also argued that when Novo Nordisk has reduced list prices in the past, it has faced penalties in the form of reduced access for patients to its medicines due to PBMs profiting from those higher prices.
“Less patients have access to our medicines when we lower the price,” Jorgensen explained to Senator Maggie Hassan, D-New Hampshire, after she urged him to reduce list prices.
The Pharmaceutical Care Management Association, an organization representing PBMs, claimed that Jorgensen was attempting to shift blame from drug manufacturers that drive up costs.
“PBMs are the only entities in the healthcare system working to minimize the impact of pharmaceutical companies' exorbitant prices on blockbuster diabetes drugs facing minimal competition,” the association declared in a statement.
During the hearing, Sanders announced that the committee had obtained written commitments from the largest PBMs to maintain access to Ozempic and Wegovy if Novo Nordisk reduced list prices. Simultaneously, the committee published a report titled "Greed, Greed, Greed," addressing Novo Nordisk's pricing.
“That’s new information for me,” Jorgensen told Sanders regarding the PBMs' commitments during the hearing. “Any measures that help patients gain access to affordable medicine, we’ll gladly examine.”
However, Jorgensen expressed concern over how this might impact patient access if Novo Nordisk lowered prices in the past, resulting in its products being removed from insurance formularies.
PBMs themselves have faced criticism for their role in drug pricing, particularly concerning the cost of insulin. Last week, the Federal Trade Commission filed a lawsuit against the three largest PBMs – CVS Health's Caremark, Cigna's Express Scripts, and UnitedHealth Group's Optum Rx – alleging that they excluded lower-priced insulin products from coverage to profit from higher-priced alternatives with higher rebates.
“We let PBMs off scot-free,” Senator Tim Kaine, D-Virginia, stated later during Tuesday's hearing, arguing that while pharmaceutical companies contribute research and life-saving treatments, PBMs have played a significant role in escalating insulin prices.
Senator Roger Marshall, a Republican from Kansas who is a medical professional, depicted Ozempic as a "miracle drug," stating, "Novo Nordisk is not the villain in this story; they’re a hero."
However, the discussion concerning insulin access also targeted Jorgensen, as Novo Nordisk is among the three primary insulin suppliers worldwide, along with Eli Lilly and Sanofi. Multiple senators addressed Jorgensen's recent announcement that the company would cease production of a specific insulin, Levemir, that patients rely on.
"Making the call to withdraw a product from the market is an incredibly tough call, and I need to explain our reasoning behind it," Jorgensen stated. "In the past year, we reduced the cost of Levemir, lowering the price, only to discover that PBMs limited access to it, making it harder for more patients to obtain it. ... The unfortunate truth is that the market for Levemir is dwindling due to the terms of our contracts."
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Jorgensen revealed that Novo Nordisk has reached out to other producers of the medication, but no one has shown interest in manufacturing it.
In response to Sen. Tammy Baldwin, a Democrat from Wisconsin, inquiring about Novo Nordisk shifting manufacturing resources from older insulin products to more lucrative Ozempic and Wegovy, Jorgensen assured, "our commitment to insulin remains unwavering."
Ozempic could face increased price competition soon, as Jorgensen mentioned in a written declaration that the drug will likely be eligible for the upcoming Medicare drug price negotiations, whereas rival products from Eli Lilly won't become eligible for a decade. The Centers for Medicare and Medicaid Services is scheduled to reveal the names of the next 15 drugs by February. The first round of negotiations led to a 22% decrease in the total net spending on 10 drugs.
Jorgensen emphasized Novo Nordisk's commitment to improving American health by ensuring their medications are affordable, stating, "We would much rather see our medicines accessible to all Americans." Additionally, Sanders highlighted the impact of high drug prices on public health, stating, "Excessively high prices for life-saving drugs like Ozempic and Wegovy are a public health crisis."
