Oct 2, 2024
Novo Nordisk CEO Lars Fruergaard Jorgensen has called attention to the complexities of the U.S. healthcare system while justifying the company’s drug pricing – prices that Senator Bernie Sanders has slammed as “outrageously high.”
Sanders accused the company of potentially driving up healthcare expenses for all Americans.
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“The prices for these drugs are so high in the United States that everyone — regardless of whether they use the products or not — will likely be forced to bear the burden of Novo Nordisk’s profit maximizing strategy through higher insurance premiums and taxes,” Sanders wrote in a public letter to Jorgensen.
In response, Jorgensen defended the company’s pricing at a senate hearing in front of the Committee on Health, Education, Labor and Pensions (HELP), attributing the high costs to the U.S. healthcare system rather than corporate greed. While he acknowledged that Americans pay more than consumers in Europe and the U.K., Jorgensen emphasized that many patients still access the drugs at affordable rates between $25 and $50 per month.
The debate underscores growing tensions around the skyrocketing demand for GLP-1 drugs, which, though originally developed for type 2 diabetes, have surged in popularity because of their effectiveness for weight loss.
The pricing controversy surrounding Novo Nordisk
Senator Sanders has been vocal about the significant price disparities in the Denmark-based drug company’s products, particularly Ozempic and Wegovy, across different countries. Sanders highlighted that while Americans pay $969 for a month's supply of Ozempic, the cost is drastically lower in other countries.
For example, in Canada the same supply costs $155 and just $59 in Germany. Similarly, Wegovy costs $1,349 per month for Americans, compared to $140 in Germany and $92 in the U.K.
According to a Bloomberg News analysis of regulatory filings and analyst estimates, Novo Nordisk’s diabetes and obesity medications have already generated nearly $50 billion in sales as of the second quarter of 2024 — and 72% of that revenue came from U.S. consumers, according to a statement from Sanders on X.
Bloomberg says sales are projected to reach $65 billion by the end of the year.
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The testimony
On September 24th, 2024, Jorgensen wasn't shy about stepping up to defend his company’s prices.
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He emphasized that despite the high price point, more than 80% of U.S. patients with health insurance coverage for Ozempic or Wegovy pay $25 or less per prescription. According to Jorgensen, the system helps reduce the financial burden for many insured patients, even as broader concerns about affordability remain.
Jorgensen also noted that since Ozempic was first introduced in 2018, the net price has dropped about 40% in the U.S. He largely attributes the inflated costs to pharmacy benefit managers (PBMs), which are the intermediaries managing prescription drug plans for insurers, and highlighted that Ozempic is now the lowest-cost, once-weekly GLP-1 medicine available on the U.S. market.
Looking ahead
Senator Sanders, as part of the HELP Committee, continues to push Novo Nordisk for greater transparency regarding its internal decision-making processes, particularly around pricing strategies. This push comes at a critical time, as the high cost of weight loss drugs like Ozempic and Wegovy are putting increasing financial strain on Medicare budgets and insurance companies. With demand for these treatments soaring, insurers are struggling to absorb the high costs, which could ultimately lead to a premium hike for all policy holders.
“A major private health insurance company has told me that they would have to double the premiums for every single subscriber if they chose to cover Wegovy and Ozempic for all eligible patients,” Sanders wrote.
Jorgensen has made it clear that his team plans to work toward the same goal with the HELP Committee, acknowledging that affordability is crucial for patients to benefit from life-changing medications.
“The complexities of the system unfortunately reduce access and affordability for many Americans,” he said in his testimony. “We are eager to work with this Committee to address these systemic issues so that everyone who can benefit from our medicines is able to get them.”
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Victoria Vesovski is a Toronto-based staff reporter at Moneywise covering personal finance, lifestyle and trending news. She holds degrees from the University of Toronto and New York University, and her work has appeared on platforms including Yahoo Finance, MSN Money and Apple News.
