Novo Nordisk CEO grilled on high prices of Ozempic and Wegovy

Novo Nordisk CEO Lars Fruergaard Jørgensen is questioned by the Senate HELP Committee Tuesday.

Photo: Screenshot of Senate HELP Committee hearing with Novo Nordisk CEO

The Senate Committee on Health, Education, Labor and Pensions grilled Novo Nordisk's CEO Lars Fruergaard Jørgensen on the company's high price for its  weight loss drugs Ozempic and Wegovy in the United States compared to other countries.

Jørgensen never directly answered the question posed by Senate HELP Committee Chairman Sen. Bernie Sanders, I-Vt., several times: Why do the drugs cost nine times as much in the United States as they do in Germany?

Novo Nordisk charges Americans with type 2 diabetes $969 a month for Ozempic, while the drug can be purchased for $59 in Germany, $71 in France, $122 in Denmark and $155 in Canada, according to slides shown by Sanders.

Novo Nordisk charges Americans with obesity $1,349 a month for Wegovy, while the drug can be purchased for $92 in the United Kingdom, $137 in Germany, $186 in Denmark and $265 in Canada.

Tuesday's hearing, "Why Is Novo Nordisk Charging Americans with Diabetes and Obesity Outrageously High Prices for Ozempic and Wegovy?" brought no promises from the CEO to lower prices, but an implied willingness to work with pharmacy benefit managers, whom he said were responsible for the prices paid by consumers at the pharmacy counter.

Jørgensen said, "We don't decide the price for patients."

The price is set by insurance companies that own PBMs, he said. Jørgensen said if list prices were lowered, PBMs would limit access by taking the drugs off formularies.

For every dollar Novo Nordisk gets, the company gives $.74 cents to PBMs, Jørgensen said.

This happened to the drug Levemir, Jørgensen said, in answer to a question by Sen. Susan Collins, R-Maine, who said a constituent contacted her about lack of availability. Levemir is a brand name for a long-acting insulin used to treat type 1 and type 2 diabetes.

PBMs and insurance companies are rewarded based on list price, Jørgensen said. Products that come with a low list price are less attractive. After Novo Nordisk dropped the price for Levemir, PBMs stopped prioritizing the drug on its formularies. In turn, this made it difficult for the drugmaker to run a high-volume manufacturing line sustainability, he said. 

"That becomes troublesome for patients," Jørgensen said. "If we paid PBMs a smaller fee I think patients would be significantly better off."

Sanders said that, even factoring in all of the rebates the PBMs receive, the net price of Ozempic is still nearly nine times as much as it costs in Germany. Wegovy costs 4.5 times as much here as in Denmark, he said.

The good news, Sanders said, is that he had gotten statements from the three major PBMs saying they would not limit accessibility to the drugs if Novo Nordisk substantially lowered prices. 

Sanders suggested that Jørgensen sit down with the PBMs on an agreement.

Sanders also said that last week he received a letter from over 250 doctors urging the committee to do everything it could to lower the price of drugs.

Jørgensen said, "I share your wish for affordable medicine for Americans."

WHY THIS MATTERS

Heart disease, type 2 diabetes and other chronic conditions are often obesity related. Obesity costs the U.S. healthcare system almost $173 billion a year, according to the Centers for Disease Control and Prevention.

As the health system moves to more value-based care, providers and health plans have a goal of keeping people healthy, which lowers costs for everyone. Two in five adults in this country are considered obese, according to the CDC.

Wegovy is approved to manage weight in adults and children 12 years and older who have obesity. Ozempic is approved to lower blood sugar for patients with type 2 diabetes. Both are popular, in-demand drugs for weight loss that costs an estimated $969 for Ozempic and over $1,300 a month out-of-pocket for Wegovy.

Insurance, including Medicare, may cover both drugs, if criteria is met for mass body index in the case of Wegovy, and for conditions other than weight loss for Ozempic. Medicaid coverage varies by state, with less than a dozen states currently offering the benefit.

"These conditions were treated as a personal choice, a failure of willpower," Jørgensen said of obesity and being overweight. 

With the development of semaglutide, the molecule in Wegovy and Ozempic, attitudes changed, he said.

Ozempic was launched in 2018 after years of research. Over the past six years, the price has declined by 40%, Jorgensen said. Today 80% of Americans with insurance have access at $25 or less.

Novo Nordisk is continuing its research and is conducting more clinical trials for Alzheimer's and other conditions.

Drug companies are stuck between "innovation and affordability," said HELP Committee Ranking Member Bill Cassidy, R-La..

The price for Wegovy and Ozempic especially keep the most vulnerable populations from accessing the drug, he said. 

Jørgensen said the company offers programs to support low-income patients.

THE LARGER TREND

Epidemiologists have estimated that more than 40,000 lives per year could be saved if Wegovy and other weight-loss drugs were made affordable and widely available in the United States, according to committee information.

If half of all adults in the U.S. took these weight-loss drugs, it would cost $411 billion per year – $5 billion more than Americans spent on all prescription drugs at the pharmacy counter in 2022.

Bringing a new medicine to market takes $2.6 billion and 10-15 years, according to PhRMA. 

Earlier this week, Novo Nordisk speculated in Bloomberg that its diabetes drug Ozempic would likely be on the government's 2027 list of price negotiations. 

Email the writer: SMorse@himss.org