Novo Nordisk CEO grilled for steep cost of Ozempic and other weight loss drugs
Lawmakers on Tuesday questioned the maker of popular weight loss drugs Ozempic and Wegovy during a Senate committee hearing focused on what Sen. Bernie Sanders called "outrageously high" prices for the drugs.
Novo Nordisk CEO Lars Fruergaard Jørgensen is testifying before the Senate Health, Education, Labor and Pension committee, led by the Vermont independent. Sanders told reporters on Monday that the hearing is about "simply asking Novo Nordisk why they continue to rip off the American people."
"Most of their sales are here in the United States," Sanders said. "We are their cash cow."
Sanders reiterated those comments at Tuesday's hearing.
The drug company has set prices for Ozempic and Wegovy much higher than in other countries. The committee found earlier this year that Novo Nordisk charges Americans with diabetes $969 a month for Ozempic, while in Canada it costs $155 a month and in Germany, $59. For Wegovy, the committee found that Novo Nordisk charges Americans with obesity $1,349 per month, as compared with $140 in Germany and $92 in the United Kingdom.
Jorgensen faulted the U.S. health care system for the large price gap, saying pharmacy benefit managers, or PBMs, which are owned by insurance companies and take a percentage of a drug's listed price, frequently take lower-cost medications out of their offerings. "It's been our experience, a product that comes with a low list price gets less coverage," the CEO said.
Neither PBMs nor insurance companies invest in the research and development to develop the medications, but the companies that do have to negotiate with them on pricing, noted Jorgenson. "It's absurd," he added.
When told by Sanders that the three leading PBMs had agreed to not reduce access to Ozempic and Wegovy should Novo Nordisk substantially cut the cost, the executive said he'd be open to negotiation but had his doubts.
"Last year, we lowered the insulin pricing and had our products dropped," said Jorgensen. "So, I have a bit of concern about how this process will play out."
Novo Nordisk last November said it would phase out and permanently discontinue its long-acting insulin Levemir in the U.S. by the end of the year, citing factors at the time including reduced patient access.
The popular weight loss drugs, known as GLP-1 agonists, which are often used by people with diabetes and obesity, have seen soaring demand in the last year. But 54% of adults who have taken a GLP-1 drug — including those with insurance — said the cost was "difficult" to afford, according to a KFF poll released in May.
Meanwhile, a recent study by Yale University suggests that the drugs can be profitably manufactured for "substantially lower" prices than the amounts Americans are paying.
Heading into the hearing, Sanders said the demand for the drugmaker must be that it "substantially lower the cost of your product," and not charge Americans more than it charges people in other countries for the medications.
The drugmaker defended its pricing in a statement ahead of the hearing, saying "we appreciate that it is frustrating that each country has its own health care system, but making isolated and limited comparisons ignores this fundamental fact." It also claimed that even when the company lowers its prices, too often patients in the U.S. don't see the savings.