At a hearing before the U.S. Senate Committee on Health, Education, Labor, and Pensions today, the CEO of Novo Nordisk (CSE:) Lars Jorgensen will face questions from Sen. Bernie Sanders about the pricing of the company’s obesity and diabetes drugs. The drugs, Wegovy and Ozempic, are sold at significantly higher prices in the United States than in some European countries, with U.S. list prices of $1,349.02 and $935.77 for a month’s treatment, respectively.
Sanders, who chairs the committee, is expected to question Jorgensen about why U.S. payers are charged more for these drugs than in any other country. Wegovy and Ozempic, used for weight loss and management of type 2 diabetes, have been linked to an average weight loss of 15% in patients.
In his prepared remarks, Jorgensen is expected to highlight the economic burden of type 2 diabetes and obesity in the United States, which cost an estimated $413 billion and $1.7 trillion annually. He is also expected to address the complexity of the U.S. health care system and Novo Nordisk’s commitment to working with the commission to address structural issues that drive up costs and negatively impact patients.
The CEO’s written statement to the committee noted that Novo Nordisk has invested $4.2 billion in research and development for diabetes and obesity through 2023. Jorgensen said 99% of U.S. commercial insurance plans cover Ozempic, and about half cover Wegovy, with the majority of insured patients paying less than $50 for a month’s treatment.
Novo Nordisk has also committed to investing $30 billion since the start of last year to improve its production capacity, with a significant portion allocated to GLP-1 drugs like Wegovy and Ozempic, including a $4.1 billion expansion of its North Carolina facility in June last year.
Despite surging demand and reported shortages of the drugs, Jorgensen noted that costs for Ozempic and Wegovy have declined by about 40% since their launch for payers receiving rebates. Additionally, he noted that Ozempic will be eligible for price negotiations with the U.S. government for its Medicare health program in 2027, provided it meets other legal criteria.
Reuters contributed to this article.
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