The CEO of Novo Nordisk wouldn’t commit to lowering the prices of Ozempic and Wegovy during a Senate hearing Tuesday, despite repeatedly being pressed by Sen. Bernie Sanders (I-Vt.), chair of the Senate Committee on Health, Education, Labor and Pensions.
Novo Nordisk chief Lars Fruergaard Jørgensen told senators Tuesday that pharmacy benefit managers (PBMs), the industry middlemen that negotiate the terms and conditions for access to prescription drugs, are the reason Wegovy and Ozempic cost so much.
Jørgensen said his company needs to pay high rebates to the PBMs in order to get favorable insurance coverage. In his written testimony, he said the net price for Ozempic, which reflects the amount his company is paid per prescription, is down 40 percent since 2018 because of rebates paid to PBMs.
But in an effort to preemptively stop the blame-shifting, Sanders announced at the top of the hearing that three of the biggest drug middlemen confirmed that lowering the list price alone wouldn’t negatively impact their decisions to cover the drugs in question.
“I am delighted to announce today that I have received commitments in writing from all of the major PBMs that if Novo Nordisk substantially reduced the list price for Ozempic and Wegovy, they would not limit coverage,” Sanders said. “In fact, all of them told me they would be able to expand coverage for these drugs if the list price was reduced.”
Sanders repeatedly asked Jørgensen whether, in light of that information, he would commit to working with the PBMs to lower the drugs’ prices.
“Anything that can help patients get access, I am supportive of. And that includes collaborating and negotiating with anyone who can help that,” Jørgensen said.
But he added a healthy dose of skepticism about the specifics of what the PBMs committed to doing.
“When I hear statements that PBMs would access a low list price product, it needs to go to patients,” Jørgensen said. “If it works in a way that patients get access to more affordable medicine and we have certainty that it actually happens … we will be positive towards it.”
Jørgensen pointed out that cutting list prices doesn’t always lead to expanded coverage, because PBMs make more rebates from products with higher prices.
As an example, he cited the company’s insulin product Levemir. After Novo Nordisk reduced its list price, insurers began dropping coverage to the point where only 36 percent of patients had access to it, and the company eventually stopped making it, he said.
During the hearing, Sanders and other Democratic senators questioned Jørgensen about why the blockbuster weight loss and diabetes drugs Wegovy and Ozempic cost so much more in the U.S. compared to other countries.
“Treat the American people the same way that you treat people all over the world,” Sanders said. “Stop ripping us off.”
Sanders said Americans with diabetes pay as much as $969 per month for Ozempic, while the same drug can be purchased for $155 in Canada, $122 in Denmark and $59 in Germany.
The list price for Wegovy in the U.S. is $1,349 per month, while Sanders said the same product can be purchased for just $186 in Denmark, $140 in Germany and $92 in the United Kingdom.
Novo Nordisk has made nearly $50 billion in sales from these two drugs alone, Sanders noted.
Jørgensen countered that Americans with insurance pay far less than the list price. Ozempic for diabetes is covered by 99 percent of commercial plans, he said, as well as Medicare and Medicaid.
But coverage of Wegovy for weight loss is much less consistent, meaning patients are more likely to be on the hook for the full cost of the drug.
Jørgensen said Wegovy is covered by half of all commercial plans, and the majority of patients with insurance coverage pay $25 or less for a 28-day supply.
“It is not our intention that anyone should pay the list price,” Jørgensen said, because it’s meant to be the starting point for negotiations between the drug company and PBMs.
Drug companies and PBMs routinely blame each other for why prescription drugs cost so much. But the complex system rewards both parties. Sanders said even given the rebates, Novo Nordisk’s net prices are still far higher than what people pay in other countries.
“You’re making huge amounts of money in this country, and you’re charging us far more. And you haven’t given me an answer as to why,” Sanders said.
Despite the effort by Sanders to keep the focus on Novo Nordisk’s pricing decisions, the PBM industry faced its share of criticism from lawmakers.
“Novo Nordisk is not the villain in this story. They’re a hero,” Sen. Roger Marshall (R-Kan.) said. “The PBMs are making the bank here.”
Sen. Tim Kaine (D-Va.) said the new ability for Medicare to negotiate drug prices will help hold drug companies responsible for high prices, but there hasn’t yet been an effort by Congress to reform the PBM industry.
“I have come to conclude, along with a number of my colleagues … we’re letting PBMs get away scot-free,” Kaine said. “One industry is under fairly intense scrutiny by this committee in Congress and one isn’t, and it’s the one that’s super-duper profitable and not researching and not producing products.”
Bipartisan bills to change certain PBM business practices have cleared two Senate committees, including the Health Committee, but never made it to the floor.
Major policy disagreements between House and Senate Republicans in terms of the scope of the changes led to the bills being sidelined this past spring, potentially until the lame-duck session after the November elections.
Kaine also expressed skepticism that the PBMs would actually refrain from limiting coverage of Wegovy and Ozempic if Novo Nordisk lowered the prices.
“Color me skeptical that an industry that is now giving us pie-in-the-sky statements about what they’re willing to do … that they’re going to come to the table and suddenly have a conversion experience and start doing the right thing,” he said.
