Novo Nordisk CEO to testify before Senate on weight-loss drug prices

Novo NordiskThe company's top executive is scheduled to face Senate testimony on Tuesday about the high prices of the weight-loss drug Wegovy and the diabetes drug Ozempic, as demand for both injections soars in the United States.

Lars Fruergaard Jørgensen, CEO of Novo Nordisk, will testify at a hearing of the Senate Committee on Health, Education, Labor and Pensions in Washington, D.C., on Tuesday at 10 a.m. Eastern Time. The hearing comes about five months after independent Sen. Bernie Sanders of Vermont, who chairs the Senate committee, launched an investigation into the Danish pharmaceutical company's pricing practices.

Sanders claims that Novo Nordisk charges Americans substantially higher prices for its blockbuster drugs than patients in other countries. Before insurance costs, Ozempic costs nearly $969 per month in the U.S. and Wegovy costs nearly $1,350 per month.

In some European countries, both treatments can now be offered for less than $100 per month's supply, according to a press release from the committee. Ozempic costs just $59 in Germany, while Wegovy costs $92 in the UK.

Sanders also said last week that CEOs of major generic pharmaceutical companies have told him they could sell a version of Ozempic for less than $100 a month at a profit. There are currently no generic alternatives to Ozempic available in the United States.

Sanders and other lawmakers, health experts and insurers have warned that insatiable demand for Novo Nordisk's drugs and similar weight-loss and diabetes drugs from rival Eli Lilly could potentially bankrupt the US healthcare system if prices do not fall.

Both drug companies make GLP-1 drugs that mimic hormones produced in 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 would cost the U.S. $411 billion a year if half of all Americans took weight-loss drugs made by Novo Nordisk and Eli Lilly. That's $5 billion more than Americans will spend on all prescription drugs in 2022.

According to health policy research organization KFF, Medicare spent $4.6 billion on Ozempic in 2022 alone.

Other insurers and employers have implemented strict requirements to control the cost of weight-loss drugs or have stopped covering these treatments altogether. Many health plans cover GLP-1 drugs for diabetes but not for weight loss. The federal Medicare program does not cover weight-loss treatments unless they are approved and prescribed for another condition.

The hearing comes as the Biden administration and lawmakers on both sides seek to contain health care costs in the United States, including by pressuring the pharmaceutical industry and middlemen in the drug supply chain. On average, Americans pay two to three times more for prescription drugs than patients in other industrialized countries, according to a White House fact sheet.

Notably, Ozempic will likely be subject to the next round of price negotiations between manufacturers and Medicare – a key provision of President Joe Biden's Inflation Reduction Act aimed at lowering costs for seniors. Wall Street analysts say Ozempic will likely be eligible for negotiations until the next round of drugs is selected in 2025, for price changes that take effect in 2027.