Key Facts to Know Before Novo Nordisk’s CEO Appears at the Senate HELP Committee
On September 24, 2024, Novo Nordisk CEO Lars Jørgensen will testify at the Senate Committee on Health, Education, Labor, and Pensions (HELP) hearing on the high prices of the diabetes and obesity drugs Ozempic and Wegovy.
Here are key facts to know before the hearing:
1. Novo Nordisk charges Americans up to 15 times more than it charges other wealthy countries for Ozempic and Wegovy.
- Novo Nordisk’s pricing isn’t justified by research and development costs. Since Ozempic’s launch in 2018, Novo Nordisk has spent over $44 billion enriching its shareholders through stock buybacks and dividends—over twice as much as it spent on R&D across its entire portfolio.
- Nor is it justified by production costs. Generic Ozempic and Wegovy could be sold profitably for around $5 and $13 per month, respectively. Novo Nordisk prices them over 100 times higher for Americans. Generics firms have indicated they would sell generics for less than $100 per month.
- Novo Nordisk has amassed nearly $50 billion from Ozempic and Wegovy since their launch.
2. Novo Nordisk’s exorbitant pricing in the U.S. has imposed widespread cost barriers on patients and financial burden on public programs.
- The annual cost to the healthcare system for covering Wegovy for half of the eligible population ($411 billion) would exceed the expenditure on all retail prescription drugs in 2022 ($406 billion). Without substantial price reductions, Wegovy could cost the U.S. health care system $1 trillion by 2031, potentially approaching $2 trillion with greater uptake.
- According to a KFF poll, 1 in 8 adults have used GLP-1s (such as Ozempic and Wegovy), with over half saying that it was difficult to afford their costs.
- Between 2020 and 2021, Medicare’s spending on Ozempic increased by more than a billion dollars, and between 2021 and 2022, spending increased by an astonishing $2 billion.
- Officials in North Carolina and West Virginia have raised alarm over how these drugs could cost state health plans covering public employees over $150 million a year, which could increase the cost of premiums in some cases up to 200%.
3. To avert the ruinous financial consequences of Novo Nordisk’s greed, the Biden administration can use its authority under 28 U.S.C. § 1498 to allow generic production of these drugs, resulting in lower costs for patients and federal health programs.
- After unsuccessful efforts to negotiate lower prices for its State Health Plan with GLP-1 manufacturers, North Carolina’s Treasurer requested that HHS initiate efforts to negotiate voluntary licenses between Novo Nordisk and generic drug producers for supply to federal, state, and local government payers.
- If Novo Nordisk refuses to voluntarily license their products, the federal government can use its authority under 28 U.S.C. § 1498 to authorize generic competitors to these price gouged drugs, as described in Public Citizen’s petition to HHS, saving Medicare $14 billion in the first two years alone, even under conservative assumptions of uptake among patients.