Sen. Bernie Sanders, I-Vt., on Tuesday forced Novo Nordisk CEO Lars Fruergaard Jørgensen to make a pitiful promise to meet with pharmacy benefits managers and talk about cutting the price of the company’s flagship medications, Ozempic and Wegovy.
Jørgensen blamed the pharmacy benefits managers (PBMs) for the high prices of the drugs during the frequently tense hearing before the Senate Committee on Health, Education, Labor and Pensions. He claimed that the middlemen would no longer offer Ozempic and Wegovy if their list prices were lower.
He asserted that “more access to patients is more likely to result from a high list price.”
Sanders, however, claimed to have received written promises from “all the major PBMs,” including Optum Rx from UnitedHealth Group, Caremark from CVS Health, and Express Scripts from Cigna, promising not to remove Novo Nordisk’s Ozempic and Wegovy from their formularies or lists of medications if the company significantly lowered the list price. PBMs negotiate medication discounts or rebates with insurance companies in exchange for coverage. PBMs have come under fire for promoting patents for more expensive medications.
“Will Novo Nordisk significantly reduce the list price of Ozempic and Wegovy in the United States if they truly follow through on their commitment?” The committee’s head, Sanders, posed the question.
At first, Jørgensen avoided a direct answer by outlining a number of issues. “I need to know what this means,” he murmured.
“However, I’m asking you again: Will you cooperate with the PBMs and this committee?” Sanders enquired.
Jørgensen said, “Yes.”
Sanders said, “No. 2.” “I know it’s complicated, but will you really cut prices significantly in this nation?” “If it functions in a way that allows patients to obtain a more affordable medication, and we need to ensure that it does,” Jørgensen remarked.
Sanders has expressed his displeasure with Novo Nordisk’s American pricing for Ozempic, a medication used to treat type 2 diabetes, and Wegovy, a medication licensed for weight reduction, in public.
“Prescription medicine costs are often the highest in the world for us. In an interview on Monday, Sanders stated, “The exact same medicine sold in Canada and Europe is a fraction of what it is in the United States.” As a result, hundreds of thousands of individuals in our nation who are in dire need of this substance will not be able to get it.
According to a previously made public committee study, Wegovy costs far less in European nations, ranging from $140 per month in Germany to $92 per month in the UK. The identical medication costs around $1,349 per month in the United States.
Tuesday, Jørgensen defended the drugmaker’s pricing strategy in his opening remarks.
He stated, “We all know the physical and emotional toll these diseases have. Type 2 diabetes costs the U.S. approximately $413 billion every year, and obesity costs the U.S. $1.7 trillion.” “For this reason, we work to ensure that patients with Type 2 diabetes and obesity are covered by both public and private insurance.”
According to a February study from the Department of Health and Human Services, in 2022, the cost of all medications in the United States, including brand-name and generic versions, was over three times higher than in other developed nations.
Novo Nordisk said this week that since Ozempic was first marketed in the United States, its net price has decreased by 40%. Wegovy is “pursuing a similar trajectory” as well. The amount a pharmaceutical firm receives after discounts and rebates from a medicine is known as the net price.
Jørgensen wasn’t the only one who expressed his disapproval of pharmaceutical benefit managers. Although he agreed that the pharmaceutical business should receive more attention, Sen. Tim Kaine (D-VA) claimed that “we’re letting PBMs get away scot-free.”
“An industry does research, another does not. There are two that develop therapies that can save lives, according to Kaine. “There are two profitable industries; one is extremely profitable and the other is profitable, but the extremely profitable industry is not conducting research or creating any innovations that could save lives.”
The Federal Trade Commission filed lawsuits against Optum Rx, Caremark, and Express Scripts on Friday in the United States, alleging that the companies had “artificially” inflated insulin prices.
According to Jørgensen, Novo Nordisk provides 74 cents to PBMs and insurance companies for every $1 it makes.
“When we set a list price, we have to take into consideration what are the rebates we have to pay because, unless we pay big rebates into the system, when we negotiate rebates with PBMs, we are not getting access to the formulary,” Jørgensen added. He reasoned that greater costs guarantee a PBM will pay for Novo Nordisk’s medications.
According to Larry Levitt, executive vice president of health policy at KFF, a nonprofit organization that studies health policy problems, there is a “race to the top” in pharmaceutical pricing, whereby drugmakers’ higher list prices drive PBMs’ greater rebates, which drive up list prices. Stated differently, pharmaceutical companies could face pressure to raise list prices in order to meet PBMs’ expectations for larger rebates.
Patients with so-called high deductible plans and those without insurance ultimately pay more, according to Levitt. The committee’s Republican members generally disapproved of government efforts to reduce the list price.
Using a defense frequently used by the pharmaceutical industry, ranking member of the committee Sen. Bill Cassidy, R-La., said that doing so may impede the development of new life-saving medications.
“It’s doubtful that these drugs, or any drug, will be developed without a profit motive, without something in return,” Cassidy stated.
