Lia DeGroot | (TNS) CQ-Roll Name
WASHINGTON — The CEO of Novo Nordisk is about to look earlier than a Senate panel Tuesday to be grilled on the excessive value of Ozempic and Wegovy, the favored medication used to deal with diabetes and weight problems.
However well being economists say it’s unlikely that congressional stress would be the driving pressure to get the costs down.
Sen. Bernie Sanders, I-Vt., who chairs the Senate Committee on Well being, Schooling, Labor and Pensions, has established himself as a perennial critic of pharmaceutical corporations throughout his time helming the committee. He initially had threatened to subpoena the president of Novo Nordisk, Doug Langa, to testify earlier than the committee. The corporate finally agreed to ship CEO Lars Fruergaard Jørgensen to subject questions on value.
Sanders has repeatedly dug in his heels on what looks like a simple query: Why does Novo Nordisk cost a lot in the US however a lot much less in international locations like Canada and Germany?
This week, Jørgensen will probably inform the committee that it’s a bit extra difficult than that. In an announcement to CQ Roll Name on Friday, a Novo Nordisk spokesperson touted actions that the corporate has taken to make Ozempic and Wegovy, each GLP-1s, extra reasonably priced.
Novo at present sells Ozempic, the model to deal with diabetes, for $968.52 monthly. It sells Wegovy to deal with weight problems for $1,349.02 monthly, in response to its web site. By comparability, Ozempic has a listing value of $59 monthly in Germany, $122 monthly in Denmark and $155 monthly in Canada, in response to the worldwide drug pricing and market entry database NAVLIN.
The spokesperson mentioned greater than 80 p.c of People with insurance coverage pay $25 or much less monthly for Ozempic.
“Sadly, even once we decrease our costs, too typically sufferers in the US don’t obtain the financial savings — it is a downside,” the spokesperson mentioned. “We respect that it’s irritating that every nation has its personal healthcare system however making remoted and restricted comparisons ignores this elementary reality. What stays fixed is the indeniable worth and price financial savings Novo Nordisk medicines carry to sufferers, healthcare techniques and society.”
Sanders’ long-running combat with the pharma business, nevertheless, goes past particular person drug costs.
“The enterprise mannequin of the pharmaceutical business is unsustainable, from a humane perspective and from a monetary perspective,” Sanders mentioned Tuesday throughout a roundtable with drug pricing specialists.
Market forces
Well being economists and business watchers say decreasing the worth of the medication is inevitable, but it surely gained’t essentially be Congress that makes it occur.
On the roundtable, Sanders introduced he had spoken with generic drug corporations that instructed him they may make a model of Ozempic that may very well be offered for $100 monthly.
Brian Reid, who helms the well being consultancy Reid Strategic, mentioned whereas that may very well be true, he thinks Sanders is lacking the purpose. He mentioned almost all branded medicines may very well be offered as generics for that value, but it surely wouldn’t depart room for innovation.
“Certainly, the pressure that’s going to drive costs all the way down to $100 just isn’t authorities intervention however competitors,” he wrote in a e-newsletter Wednesday. “There is perhaps 16 new weight problems meds available on the market inside 5 years. Costs are solely going in a single course.”
Lindsay Allen, a well being economist at Northwestern College, mentioned whereas the listening to may result in renewed calls from lawmakers for value controls, the market is already shifting towards decrease prices. She pointed to Eli Lilly’s direct-to-consumer platform that launched final month, LillyDirect, the place it would promote its weight problems medicine Zepbound for $399 a month.
“What’s going to be the simplest lever within the brief time period is the market dynamics of what’s occurring with opponents,” she mentioned.
Allen mentioned Novo expenses such a excessive price ticket in the US as a result of customers are largely prepared to pay that value.
“It’s probably the most primary instance of provide and demand,” she mentioned. “We already can’t sustain with provide of the GLP-1s; so many individuals are shopping for them that there are shortages.”
One resolution to get the price down, she mentioned, is for the Facilities for Medicare and Medicaid Providers so as to add them to the record of medicine whose costs they’ll negotiate beneath the 2022 price range reconciliation legislation. In her view, she mentioned it’s probably that the medication get added to the negotiations down the road.
“Up till this level, nobody’s actually put stress on the producers or on the federal authorities to make use of these mechanisms in regard to the GLP-1s,” she mentioned.
Throughout the listening to, she mentioned she’s anticipating lawmakers to ask pointed questions geared toward getting Jorgensen to justify the excessive costs of the medication.
“What I’m hoping will even come up within the listening to is the truth that it really prices little or no to fabricate these medication,” she mentioned.
Melissa Barber, a well being economist at Yale College, mentioned throughout Sanders’ roundtable Tuesday that her analysis has proven that corporations may manufacture GLP-1s for as little as $5 monthly. She got here to that conclusion by inspecting the price of the energetic pharmaceutical ingredient, value of injection system, overhead prices, taxes and markups.
“Novo Nordisk and Eli Lilly are going to be simply tremendous,” Barber mentioned. “I’d nonetheless anticipate them to have the best earnings of any drug firm on this planet, even when costs have been diminished to [$50 to $100].”
Getting Medicare to extensively cowl weight problems medication has been an uphill battle.
Lawmakers have tried to attain protection through a invoice referred to as the Deal with and Scale back Weight problems Act, which is sponsored by Reps. Brad Wenstrup, R-Ohio, and Raul Ruiz, D-Calif. A condensed model of the invoice was accepted by the Home Methods and Means Committee earlier this 12 months. Below the amended model, Medicare may cowl the medication for individuals with associated situations whose insurance coverage beforehand coated the medicine.
Allen mentioned getting the medicines coated by Medicare may be depending on how properly the medication save Medicare on different well being care prices for situations associated to weight problems, equivalent to cardiovascular points.
“If CMS have been paying the costs that they’re paying now for the sufferers they’re scheduled to pay, it will be cheaper for CMS to simply purchase Novo Nordisk than it will be to pay what we’re paying simply over the subsequent two years,” Barber mentioned.
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