On Tuesday, Novo Nordisk CEO Lars Fruergaard Jørgensen stated during a US congressional hearing that the company would be open to negotiating the prices of its highly sought-after weight-loss and diabetes drugs, Wegovy and Ozempic.
However, this willingness is contingent on US lawmakers ensuring that the drugs remain covered by insurers.
Background
The US Senate panel, led by Senator Bernie Sanders, urged the Danish pharmaceutical giant Novo Nordisk to lower the list prices of its widely-used obesity and diabetes drugs to make them more affordable for American patients, where the company earns the majority of its profits, according to its earnings report for the first half of 2024.
"I want to thank Mr. Jørgensen for our discussions and for his agreeing to voluntarily testify before the HELP Committee about the outrageously high cost of Ozempic and Wegovy in the United States," Sanders stated.
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The Senate Committee highlighted in a 20 September statement that Ozempic costs approximately $969 (€866) per month and Wegovy nearly $1,350 (€1,206) per month in the US, while the list price of Ozempic in Germany is just $59 (€53), and Wegovy costs $92 (€82) per month in the UK.
"Novo Nordisk has made nearly $50bn (€45bn) in sales from these two products alone," the committee added.
"Structural Issues"
At a hearing with the Senate Health, Education, Labor, and Pensions Committee in Washington, CEO Lars Fruergaard Jørgensen argued that the high prices of Novo Nordisk's drugs were the result of "structural issues", with middlemen and insurers holding significant influence over price controls in the US.
He expressed a willingness to collaborate with policymakers to find solutions that would make medicines more accessible and affordable.
In written testimony submitted on Monday, Jørgensen noted that, after Novo Nordisk reduced the price of its insulin product Levemir, it was removed from insurers' coverage, leading to a sharp decline in US patient access from 90% to just 36%.
Senator Sanders stated on Tuesday that he had secured written commitments from major Pharmacy Benefit Managers (PBMs), including UnitedHealth Group's Optum, CVS Health's Caremark, and Cigna, to expand coverage for Novo Nordisk's Wegovy and Ozempic if the prices were lowered.
PBMs are third-party administrators that manage prescription drug benefits on behalf of health insurers, Medicare Part D plans, large employers, and other payers.
Their primary function is to negotiate prices with drug manufacturers, pharmacies and insurers to reduce drug costs and ensure access to medications for patients.
In its written testimony, Novo Nordisk also highlighted that it has invested billions in research, development, and the construction of new facilities for obesity-related drugs, improving lives in America and helping reduce healthcare costs.
Timeline
Wall Street analysts said that Novo Nordisk is likely to be on the list of price negotiations in 2027 when the next round of drugs is selected in February 2025.
This implies a potential price reduction in more than two years.
US remains Novo Nordisk's primary market
According to Novo Nordisk’s earnings report for the second quarter, sales in the US rose by 41% to 38.4bn Danish Kroner (€5.2bn), accounting for 56% of its overall sales.
The company noted that "sales growth in the US was positively impacted by gross-to-net sales adjustments related to prior years".
Novo Nordisk reported that a 25% increase in net sales was driven by demand for diabetes and obesity care, as well as insulin sales.
The demand for Wegovy and Ozempic has been outpacing supply, prompting the Danish drugmaker to expand its production capacity to maintain market share.
Recently, the firm acquired its subcontractor, the US-based drug maker Catalent, for $16.5bn (€10bn).
Sales and distribution costs rose by 4%, primarily due to promotional activities for Wegovy in North America and the marketing of weight-loss drugs in international markets.
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