Novo NordiskThe top manager faced a Interrogation by the Senate on Tuesday over high prices for the corporate's weight-loss drug Wegovy and diabetes drug Ozempic, as demand for each injections soars within the U.S.
Lars Fruergaard Jørgensen, CEO of Novo Nordisk, made no explicit commitment Legislators within the Senate Committee on Health, Education, Labor and Pensions hearing in Washington, DC, that he would lower the costs of the 2 drugs.
But Jørgensen said he desires to work with them on policy solutions that address the “structural problems” that drive up prescription drug costs. He also promised to sit down down with pharmacy profit managers – middlemen who negotiate drug discounts with manufacturers on behalf of insurers – to “work together on anything that will give patients access and affordability to medicines.”
The commitment got here after Senator Bernie Sanders, the independent senator from Vermont who chairs the Senate committee, said he had received written commitments from all major PBMs that they’d not limit coverage of Wegovy and Ozempic if Novo Nordisk lowered its list prices. The hearing comes about five months after Sanders launched an investigation into the Danish pharmaceutical company's pricing practices.
“All we're saying, Mr. Jørgensen, is that you should treat the American people the same way you treat people around the world,” Sanders said during Tuesday's hearing. “Stop ripping us off.”
He identified that Novo Nordisk had generated nearly $50 billion in revenue from Wegovy and Ozempic, with the vast majority of that revenue coming from the United States. Sanders claims that Novo Nordisk charges Americans significantly higher prices for its blockbuster drugs than patients in other countries. Before insurance costs, Ozempic costs nearly $969 monthly and Wegovy costs almost $1,350 monthly within the USA
In some European countries, each treatments can now be offered for lower than $100 monthly, in line with a press release from the CommitteeOzempic costs only $59 in Germany, while Wegovy costs $92 within the UK.
Sanders also said last week that CEOs of major generic pharmaceutical corporations had told him they may develop a version of Ozempic for lower than $100 monthly with profit. There are currently no generic alternatives to Ozempic available within the US
Large PBMs, including UnitedHealth Group's Optum Rx and CVCaremark and a few health insurers said list prices of $100 monthly for Wegovy and Ozempic would help make these drugs more widely available to patients, in line with a release by Sanders.
That could undermine Jørgensen's claim in his written testimony that the PBMs are answerable for the high list prices of Novo Nordisk's drugs and “exercise almost total control over ensuring that hundreds of millions of Americans get the medicines they need at affordable prices.” The company argues that it must give you the option to pay rebates to those middlemen to get their drugs on drug lists, or lists of medicine covered by insurance firms.
Jørgensen noted that the written guarantees Sanders received from the PBMs were “new information to me,” but said he could understand “that the PBMs may have changed their minds.”
Novo Nordisk argues that it has invested billions in researching, developing and expanding production of those drugs, and is pouring even extra money into researching their potential to treat other obesity-related diseases. This investment has prolonged and improved the lives of thousands and thousands of Americans, helping to cut back health care costs related to obesity and diabetes, in line with Jørgensen's written testimony.
During the hearing, Jørgensen said the corporate had fought to have the drugs covered by private and non-private health insurers.
He also blamed the “complex U.S. health care system” partly for making it difficult for patients to get inexpensive pharmaceuticals, noting that “no single company alone can solve such enormous and complicated policy challenges.”
Jørgensen promised that Novo Nordisk would “remain committed and work with this committee on policy solutions to address the structural problems that are driving up costs.”
However, Jørgensen believed that a price reduction could have consequences because it may lead to a discount in insurance coverage.
In his written testimony, Jørgensen said Novo Nordisk's insulin product, Levemir, was previously available to 90 percent of U.S. patients through drug lists. But after Novo Nordisk lowered the list price, insurers began to stop covering the insulin, leaving only 36 percent of patients with access.
This ultimately prompted the corporate to stop producing the insulin, Jørgensen said in his written statement.
Sanders and other lawmakers, Health experts and insurers have warned that insatiable demand for Novo Nordisk’s drugs and similar weight-loss and diabetes treatments from rival Eli Lilly could potential bankruptcy of the US healthcare system unless prices fall.
Both drug corporations make GLP-1 drugs that mimic hormones produced within the gut to curb appetite and regulate blood sugar. Eli Lilly's weight-loss injection Zepbound and diabetes drug Mounjaro also cost around $1,000 a month, before insurance and other subsidies.
In a press release, the Senate Health Committee said it will cost the U.S. $411 billion a yr if half of all Americans took weight-loss drugs made by Novo Nordisk and Eli Lilly. That's $5 billion greater than Americans will spend on all pharmaceuticals in 2022.
Medicare spending 4.6 billion dollars for Ozempic in 2022 alone, in line with the health policy research organization KFF.
Other insurers and employers have implemented strict requirements to regulate the fee of weight-loss drugs or have stopped covering these treatments altogether. Many health plans cover GLP-1 drugs for diabetes but not for weight reduction. The federal Medicare program doesn’t cover weight-loss treatments unless they’re approved and prescribed for one more condition.
The hearing comes because the Biden administration and lawmakers on each side seek to contain health care costs within the United States, including by pressuring the pharmaceutical industry and the middlemen within the drug supply chain. On average, Americans pay two to 3 times more for pharmaceuticals than patients in other industrialized countries, in line with a Profile from the White House.
Notably, Ozempic will likely be subject to the subsequent round of price negotiations between manufacturers and Medicare – a key provision of President Joe Biden's Inflation Reduction Act geared toward lowering costs for seniors. Wall Street analysts say Ozempic will likely be eligible for negotiations until the subsequent round of medicine is chosen in 2025, for price changes that take effect in 2027.
The lawmakers called on Novo Nordisk to commit to not sue the federal government if Ozempic and Wegovy are chosen for the subsequent round of negotiations.
Jørgensen didn’t make this commitment explicit, noting that the corporate believes the talks are “not fair negotiations, but in reality price fixing” that could have negative consequences for drug innovation.
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