$5 Ozempic? New study sparks calls for Novo Nordisk to cut prices

While the list price for a monthly supply of Ozempic in the U.S. nears $1,000, new research indicates it could be manufactured for less than $5 per month, sparking calls from lawmakers for Novo Nordisk to lower the price of its blockbuster diabetes and weight loss drug. 

On March 27, a team of researchers from Yale University, King's College Hospital in London, and Boston-based Harvard Medical School published findings that showed semaglutide, the active ingredient in Ozempic and Wegovy, could be manufactured for between 89 cents and $4.73 per month — less than estimated costs to produce many types of insulin. The "cost-based" estimates are based on researchers' evaluation of manufacturing costs, plus a profit margin with an allowance for tax. 

"The goal of this research is to have receipts, to be as transparent as possible," Melissa Barber, PhD, an author on the study and postdoctoral associate at Yale School of Medicine in New Haven, Conn., told Bloomberg. "The profit margin is immense. … There should be a conversation in policy about what is a fair price." 

The new study also parallels a larger trend in the pharmaceutical industry of manufacturing costs often being well below a drug's list price, Christine Buttorff, PhD, a healthy policy researcher and analyst at RAND, told Becker's

"Given the demand for Ozempic (semaglutide), it is not likely we will see list prices drop for the GLP-1 class of drugs in the U.S. any time soon," Dr. Buttorff added. 

In response to the findings, lawmakers are heightening pressure on Novo Nordisk to cut prices for Ozempic, which is approved for Type 2 diabetes, and Wegovy, which is approved for chronic weight management. In 2023, the company saw more than $18 billion in sales for the two drugs. 

"Novo Nordisk charges Americans nearly $1,000 a month for this drug, while the same exact product can be purchased for just $155 a month in Canada, and just $59 in Germany," Sen. Bernie Sanders, chair of the Senate Committee on Health, Education, Labor and Pensions, said in a statement.

Mr. Sanders is considering hearings on the cost of GLP-1s, but first hopes to set up a personal meeting with Novo Nordisk's CEO on the matter, he told Bloomberg. A spokesperson for the company did not say whether its CEO would meet with the senator. 

"Ozempic has the potential to be a game changer in the diabetes and obesity epidemics in America. But, if we do not substantially reduce the price of this drug, millions who need it will be unable to afford it," Mr. Sanders said in a statement, adding the drug has the potential to "bankrupt" Medicare. 

Last year, Novo Nordisk spent $5 billion on research and development, the company said in a statement to Becker's, adding that it plans to spend upward of $6 billion this year to boost manufacturing of GLP-1s. It declined to share production costs for the drugs. 

"While we are unaware of the analysis used in the study, we have always recognized the need for continuous evaluation of innovation and affordability levers to support greater access of our products," Novo Nordisk said in the statement. "We continue to support greater health equity to those in need of diabetes treatment and care."

Research has shown out-of-pocket costs for patients taking Ozempic vary widely, depending on a person's insurance. The drug's website states that patients with commercial or private insurance may pay as low as $25 per month for a one-, two- or three-month supply for up to 24 months. Novo Nordisk has also said 75% of its gross earnings go toward rebates and discounts. Meanwhile, a small survey recently found more than half of people currently taking a GLP-1 said they were paying $50 or less per month. 

Earlier this month, CMS issued guidance paving the way for Medicare coverage of weight loss drugs. Per the guidance, Medicare Part D drug benefit plans may cover anti-obesity medications if they are approved for additional health benefits and used for those conditions. Many plans already cover GLP-1s including Ozempic for Type 2 diabetes. 

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