Novo Nordisk, the Danish pharmaceutical company, has attributed the high prices of its popular weight-loss drugs, Wegovy and Ozempic, to middlemen within the U.S. healthcare system. This response comes amidst an investigation spearheaded by U.S. Senator Bernie Sanders into the pricing of these medications.
In a correspondence with Senator Sanders, Novo Nordisk revealed that it retains only 60% of the list price for Wegovy and Ozempic, with the remaining amount going to intermediaries in the healthcare supply chain. The investigation, initiated by the Senate Health, Education, Labor, and Pensions (HELP) committee, seeks to understand the reasons behind the steep list prices of these drugs.
Novo Nordisk’s letter highlights the company’s willingness to collaborate with U.S. lawmakers to address systemic issues in the American healthcare system to improve access to its medications. Despite the high prices in the U.S., Novo Nordisk anticipates that the net price of Wegovy and Ozempic will decline under current market conditions.
Senator Sanders’ April letter, which announced the HELP committee’s investigation, requested a detailed breakdown of the costs incurred by Novo Nordisk in developing and producing its weight-loss drugs. Sanders noted the stark price differences, pointing out that Wegovy costs $1,349 per month in the U.S., compared to $140 in Germany and $92 in the U.K. Similarly, Ozempic is priced at $969 per month in the U.S., while it costs just $155 in Canada and $59 in Germany.
This significant price discrepancy highlights an important consideration for Americans: prescription drugs, including Wegovy and Ozempic, can often be purchased at much lower prices in countries like Canada.
Sanders also cited research from Yale University indicating that GLP-1 drugs could be manufactured for as little as $5 per month. In response, Novo Nordisk argued that such estimates do not account for the extensive research and development costs, noting that the company spent $10 billion developing its GLP-1 drugs.
The financial success of these drugs is evident, with Ozempic expected to generate $18 billion in revenue and Wegovy projected to bring in $9 billion this year, primarily from the U.S. market, where 70 million adults are obese. However, a recent report from the Senate’s HELP committee warned that the high prices of these medications could lead to a significant increase in prescription drug spending, potentially raising insurance premiums nationwide.
The report estimated that providing Wegovy to half of the obese American population would cost $411 billion annually, nearly matching the $406 billion Americans currently spend on all other prescription drugs combined.
Senator Sanders has also voiced his concerns through an op-ed in the Danish newspaper Politiken, accusing Novo Nordisk of failing to uphold its moral responsibilities by charging exorbitant prices for its GLP-1 agonists. While Novo Nordisk confirmed sending a letter to Sanders, it declined to provide additional comments. Senator Sanders’ office has also been contacted for further remarks.
Novo Nordisk’s valuation has soared due to the success of its GLP-1 agonist weight loss drugs, establishing the company as Europe’s most valuable firm.
Americans grappling with high prescription drug costs might consider exploring options for purchasing these medications from countries like Canada, where prices are significantly lower.