Ozempic and Wegovy maker Novo Nordisk faces hearing over high cost of weight loss drugs

WASHINGTON – Sen. Bernie Sanders (I-Vt.) on Tuesday extracted a tenuous commitment from Novo Nordisk CEO Lars Fruergaard Jørgensen to meet with pharmacy benefit managers to discuss lowering the costs of the blockbuster drugs Ozempic and Wegovy.

During the often tense hearing before the Senate Committee on Health, Education, Labor and Pensions, Jørgensen blamed pharmacy benefits managers (PBMs) for the drugs' high prices, saying Ozempic and Wegovy would no longer be offered by the middlemen if they had a lower list price.

A “high list price,” he said, “is more likely to lead to more patient access.”

However, Sanders said he recently received written commitments of “all of the major PBMs” — UnitedHealth Group's Optum Rx, CVS Health's Caremark and Cigna's Express Scripts — that they would not remove Ozempic and Wegovy from their drug lists or the list of drugs they offer if Novo Nordisk significantly reduced the list price. PBMs work with insurance companies to negotiate discounts or reimbursements on drugs in exchange for coverage. PBMs have been criticized for transferring patents to higher-priced drugs.

“If they actually follow through on their commitment, will Novo Nordisk significantly reduce the list price of Ozempic and Wegovy in the United States?” asked Sanders, the committee chairman.

Jørgensen initially avoided giving a decisive answer and explained numerous complications. “I have to understand what this entails,” he said.

“But I ask you again: Will you work with this committee and the PBMs?” Sanders asked.

“Yes,” replied Jørgensen.

“No. 2,” Sanders said. “I understand it's complicated. Are you actually going to significantly lower prices in this country?”

“If it works to give patients access to a cheaper drug, we need to make sure that actually happens,” said Jørgensen.

Sanders has been vocal in his frustration with the high prices Novo Nordisk charges Americans for both Ozempic (used to treat type 2 diabetes) and Wegovy (approved for weight loss).

“In general, we pay by far the highest prices in the world for prescription drugs. In Canada and Europe, the same drugs are sold for a fraction of what they cost in the United States,” Sanders said in an interview on Monday. “The result is that hundreds of thousands of people in this country who desperately need this product cannot afford it.”

A previously published committee report showed that the cost of Wegovy is significantly lower in European countries – from $140 per month in Germany to $92 per month in the United Kingdom. Americans pay about $1,349 per month for the exact same drug.

In his opening speech on Tuesday, Jørgensen defended the drugmaker's pricing structure.

“Type 2 diabetes costs the United States about $413 billion annually and obesity costs the United States $1.7 trillion, and we all know the physical and emotional toll these diseases have,” he said. “That's why we're working to create public and private health insurance for patients with type 2 diabetes and obesity.”

A February report from the Department of Health and Human Services found that in 2022, prices for all drugs – both brand-name and generic – in the United States were nearly three times higher than in other wealthy countries.

The net price of Ozempic has fallen by 40 percent since its launch in the US, Novo Nordisk announced last week. Wegovy is also “following a similar trend.” The net price is the amount a pharmaceutical company earns from a drug after deducting discounts and rebates.

Jørgensen was not the only one to express his displeasure with the Pharmacy Benefit Managers.

Senator Tim Kaine (D-Virginia) said he supports the focus on the pharmaceutical industry, “but we are letting the PBMs get away with it.”

“One industry does research, the other doesn't. One produces life-saving treatments, the other doesn't,” Kaine said. “One industry is super-profitable, the other is profitable, but the super-profitable one doesn't do research and doesn't produce life-saving innovations.”

On Friday, the Federal Trade Commission sued Optum Rx, Caremark and Express Scripts in the US, accusing them of “artificially” inflating the price of insulin.

Jørgensen claimed that for every dollar Novo Nordisk earns, it passes on 74 cents to PBMs and insurance companies.

“When we set a list price, we have to take into account what discounts we have to pay, because if we don’t pay much, “If we bring discounts into the system and negotiate discounts with PBMs, we will not get access to the drug directory,” Jørgensen said.

Therefore, he argued, higher prices would ensure that a PBM would cover Novo Nordisk's drugs.

Republicans on the committee largely rejected the administration's pressure to lower the list price.

This could hinder the development of new life-saving drugs, said Senator Bill Cassidy (R-Louisiana), ranking member of the committee, using an argument often shared by the pharmaceutical industry.

“Without a profit motive, without something in return, it is unclear whether these drugs or any drugs will be developed,” Cassidy said.