Novo Nordisk CEO testifies at Senate over weight loss drug prices

Novo Nordisk‘s top executive faced a Senate grilling on Tuesday over the high prices of the company’s weight loss drug Wegovy and diabetes treatment Ozempic, as demand for both injections soars in the U.S. 

Novo Nordisk CEO Lars Fruergaard Jørgensen did not explicitly promise lawmakers at a Senate Health, Education, Labor and Pensions Committee hearing in Washington, D.C., that he would slash prices for the two drugs.

But Jørgensen said he wants to work with them on policy solutions that will address the “structural issues” that drive up prescription drug costs. He also committed to sitting down with pharmacy benefit managers – middlemen who negotiate drug rebates with manufacturers on behalf of insurers – to “collaborate on anything that helps patients get access and affordability.”

That pledge came after Sen. Bernie Sanders, the Vermont independent who chairs the Senate panel, said he received commitments in writing from all of the major PBMs that they would not limit coverage of Wegovy and Ozempic if Novo Nordisk reduced their list prices. The hearing comes roughly five months after Sanders opened an investigation into the Danish drugmaker’s pricing practices. 

“All we are saying, Mr. Jørgensen, is treat the American people the same way that you treat people all over the world,” Sanders said during the hearing Tuesday. “Stop ripping us off.”

He noted that Novo Nordisk has raked in nearly $50 billion in sales from Wegovy and Ozempic, with most of that revenue coming from the U.S. Sanders contends that Novo Nordisk charges Americans substantially higher prices for its blockbuster drugs than it does for patients in other countries. Before insurance, Ozempic costs nearly $969 per month and Wegovy costs almost $1,350 per month in the U.S. 

Meanwhile, both treatments can cost as little as under $100 for a month’s supply in some European countries, according to a release from the committee. Ozempic costs just $59 in Germany, while Wegovy costs $92 in the U.K.

Sanders also said last week that the CEOs of major generic pharmaceutical companies have told him that 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 U.S. 

Major PBMs, including UnitedHealth Group‘s Optum Rx and CVS‘ Caremark, and some health plans said $100 monthly list prices for Wegovy and Ozempic would help make those drugs more widely available to patients, according to a release from Sanders.

That could undercut Jørgensen’s claim in his written testimony that PBMs are to blame for the high list prices of Novo Nordisk’s drugs and “exercise near-total control over the ability of hundreds of millions of Americans to get the medicines they need at affordable prices.” The company has argued that it needs to be able to pay rebates to those middlemen to get their drugs on formularies, or lists of medications covered by insurance.

Jørgensen noted that the written promises that Sanders received from PBMs are “new information to me,” but said he understands “that perhaps the PBMs have changed their minds.”

Novo Nordisk has argued that it has spent billions to research, develop and expand manufacturing for the treatments and is funneling more money into researching their potential to treat other obesity-related health conditions. That investment has extended and improved the lives of millions of Americans, which helps reduce the health-care costs associated with obesity and diabetes, according to written testimony from Jørgensen.

During the hearing, Jørgensen said the company has fought to secure public and private insurance coverage for the medications.

He also in part blamed the “complex U.S. healthcare system” for making it difficult for patients to access affordable prescription drugs, noting that “no single company alone can solve such vast and complicated policy challenges.”

Jørgensen promised that Novo Nordisk will “remain engaged and work with this committee on policy solutions to address the structural issues that drive up costs.”

But Jørgensen contended that lowering prices could have consequences, saying it could lead to less insurance coverage.

In his written testimony, Jørgensen said Novo Nordisk’s insulin product Levemir was previously available to 90% of U.S. patients through formularies. But insurers began to drop coverage of the insulin after Novo Nordisk cut its list price, leading to only 36% of patients having access.

That eventually drove the company to discontinue the insulin, Jørgensen said in his written testimony.

Sanders and other lawmakers, health experts and insurers have warned that the insatiable demand for Novo Nordisk’s drugs and similar weight loss and diabetes treatments from rival Eli Lilly could potentially bankrupt the U.S. health-care system unless prices drop.

Both drugmakers make GLP-1s, which mimic hormones produced in the gut to tamp down a person’s appetite and regulate their blood sugar. Eli Lilly’s weight loss injection Zepbound and diabetes drug Mounjaro similarly cost around $1,000 per month before insurance and other rebates.

In a release, the Senate Health Committee said it would cost the U.S. $411 billion per year if half of all Americans took weight loss drugs from Novo Nordisk and Eli Lilly. That’s $5 billion more than what Americans spent on all prescription drugs in 2022. 

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

Other insurers and employers have implemented strict requirements to control weight loss drug costs, or have dropped coverage of those treatments altogether. Many health plans cover GLP-1s for diabetes, but not for weight loss. The federal Medicare program doesn’t pay for weight loss treatments unless they are approved and prescribed for another health condition. 

The hearing comes as the Biden administration and lawmakers on both sides of the aisle try to rein in health-care costs in the U.S., in part by pressuring the pharmaceutical industry and drug supply chain middlemen. On average, Americans pay two to three times more than patients in other developed nations for prescription drugs, according to a fact sheet from the White House.

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 that aims to lower costs for seniors. Wall Street analysts say Ozempic will likely be eligible for negotiations by the time the next round of drugs is selected in 2025, for price changes that will go into effect in 2027.

Lawmakers asked Novo Nordisk to commit to not suing the federal government if Ozempic and Wegovy are selected for the next round of negotiations.

Jørgensen did not explicitly make that commitment, noting that the company believes the talks are “not a fair negotiation, but actually price-setting” that will have negative consequences for drug innovation.