#NovoNordisk #DrugPricing #HealthcareReform
Novo Nordisk CEO Faces Intense Scrutiny Over High Drug Prices
In a recent Senate hearing, Novo Nordisk CEO Lars Fruergaard Jørgensen was grilled by lawmakers over the exorbitant prices of the company's blockbuster drugs, Ozempic and Wegovy. These medications, classified as GLP-1 agonists, are used to treat diabetes and obesity but have become unaffordable for many Americans.
Pricing Disparities
The stark contrast in pricing between the U.S. and other countries was a central issue. Ozempic, for instance, costs $969 per month in the U.S., compared to $155 in Canada and $59 in Germany. Similarly, Wegovy is priced at $1,349 per month in the U.S., while it costs $140 in Germany and $92 in the UK.
Senate Committee's Concerns
Led by Senator Bernie Sanders, the Senate Health, Education, Labor and Pensions Committee expressed strong concerns about these pricing disparities. Sanders emphasized that Novo Nordisk's high prices in the U.S. are exploiting the country's healthcare system, which lacks the price negotiation and regulation seen in other nations. He pointed out that pharmaceutical companies can charge any price the market can tolerate, highlighting that Novo Nordisk generates significant revenue from U.S. sales, making Americans their "cash cow".
Commitments from Pharmacy Benefit Managers (PBMs)
A crucial development during the hearing was the revelation that major PBMs, including Caremark (CVS), UnitedHealth RX, and Cigna Express Scripts, have committed in writing to not limit coverage of Ozempic and Wegovy if Novo Nordisk substantially reduces the list prices. This commitment could potentially expand coverage for these drugs, addressing a significant barrier to accessibility.
Novo Nordisk's Defense
Jørgensen defended the company's pricing by citing the high costs associated with research and development, as well as the substantial rebates provided to PBMs. He noted that for every dollar of the drug's retail price, $0.74 goes to rebates. Additionally, Jørgensen highlighted that Novo Nordisk, unlike many American pharmaceutical firms, operates with a significant nonprofit component, suggesting that shareholder interests are not the primary driver of their pricing decisions.
Impact on Patients
Despite these defenses, the hearing underscored the severe impact of high drug prices on patients. A KFF poll revealed that 54% of adults who took GLP-1 drugs found the cost difficult to afford, even with insurance. This affordability crisis is particularly acute given the soaring demand for these medications and the critical health issues they address, such as diabetes and obesity.
Call for Action
The Senate committee and other stakeholders are pushing for substantial price reductions to make these essential medications more accessible. Sanders and other lawmakers have made it clear that they will take legislative action if pharmaceutical companies do not voluntarily lower their prices. The message is clear: the current pricing structure is unsustainable and morally indefensible, especially given the national health emergencies posed by diabetes and obesity.
Original Article: https://www.cnbc.com/2024/09/24/novo-nordisk-ceo-to-testify-at-senate-over-weight-loss-drug-prices.html
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