‘Stop Ripping Us Off’: Senators Grill Pharma CEO on Astronomical Ozempic Costs

The chief executive of Novo Nordisk blamed PBMs, and refused to rule out suing the federal government if Medicare attempts to negotiate prices.

By Paul Blest, More Perfect Union

The CEO of the company that manufactures Ozempic and Wegovy faced tense questioning in the U.S. Senate Tuesday, as the diabetes and weight loss drugs’ soaring cost in the U.S. is straining the health budgets of both federal and state governments and American families. 

Sen. Bernie Sanders (I-VT), the chair of the Senate Health, Education, Labor, and Pensions committee, said during the hearing that the U.S. list price for Wegovy, a weight loss medication, is nearly 15 times as much as its list price of $92 in the United Kingdom. 

“Nobody here is asking Novo Nordisk to provide charity to the American people,” Sanders told Novo Nordisk CEO Lars Jorgensen. “All we are saying, Mr. Jorgensen, is treat the American people the same way that you treat people all over the world: Stop ripping us off.” 

Novo Nordisk reported over $12 billion in profit last year, up from $4 billion just a decade ago —growth that has been fueled by the explosion of drugs like Wegovy and Ozempic, which is intended to treat diabetes, onto the market. These medications have been described as “miracle drugs” for their effectiveness in controlling diabetes and weight loss, and some research shows they could be used to treat even some cancers. 

But their costs are astronomically high in the U.S. compared to the rest of the world — Ozempic’s list price in the U.S. is $969, yet just $130 in Novo Nordisk’s home country of Denmark. 

These high costs not only make them unaffordable to patients — they could ultimately break the U.S. health care system entirely. North Carolina Treasurer Dale Folwell, a Republican, said the state’s health plan for public employees was set to pay as much as $170 million on the drugs to cover 25,000 patients — about as much as it cost the state last year to give 250,000 retirees a one-time 4 percent bonus. Folwell said that 2.6 percent of Novo Nordisk’s profits on Wegovy came from the North Carolina state health plan alone.

After failing to negotiate a lower cost with Novo Nordisk and the state’s pharmacy benefit manager, the state health plan dropped coverage of Ozempic and Wegovy. “When you’re trying to negotiate with someone who is consistently putting profits over patients, you can see how those negotiations can break down very quickly,” Folwell told More Perfect Union. 

During the Tuesday hearing, Jorgensen told senators that the cost of the drug between the U.S. and European nations is incomparable because most American patients aren’t paying the drugs’ high list price at the counter. But when pressed, Jorgensen wouldn’t commit to lowering the drugs’ price in the United States.

Jorgensen also criticized the Biden administration’s action to allow Medicare to negotiate drug prices to lower costs under the Inflation Reduction Act, and declined to say whether the company would sue the federal government if Ozempic is listed as a drug for negotiation. Novo Nordisk did sue the federal government to argue the IRA is unconstitutional, but a federal judge tossed the lawsuit in August. 

“I have nothing against negotiating pricing with the objective of improving affordability for patients, but if it’s not a fair negotiation but price-setting, I think it will have negative consequences on the innovation being brought to Americans,” Jorgensen said.

At the hearing, Sen. Roger Marshall (R-KS) praised Novo Nordisk for their innovation and said the “real culprit” is pharmacy benefit managers (PBMs). Sen. Tim Kaine (D-VA) also stressed that Congress needs to “get serious about the PBM reform piece” of why drugs in the U.S. are so high; potential reforms, however, have been mired in Congressional gridlock. 

Jorgensen blamed problems with access and affordability on the “complex U.S. health care system,” particularly the “middlemen” pharmacy benefit managers. “The fact that we can secure that 99 percent of people with insurance have access, that there’s a copay at the pharmacy of $25 or less without premiums going up in Medicare, while profit goes up for the middlemen, is a concerning data point,” he said. 

But during the hearing, Sanders said that all three major PBMs in the United States — Caremark (CVS), Express Scripts (Cigna), and OptumRx (United Healthcare) — have made commitments in writing not to “penalize” Novo Nordisk by limiting coverage if they substantially lower the price of the drug. 

“In fact, all of them told me they would be able to expand coverage for these drugs if the list price was reduced," Sanders said.

Even with those commitments, Jorgenson still wouldn’t commit to lowering the price of the drugs, but said that “anything that will help patients get access to affordable medicine we’ll be happy to look into.” 

Novo Nordisk’s effective monopoly on the drugs means that generic, more affordable versions can’t be made. A paper earlier this year authored by Yale health economist Melissa Barber and researchers from Doctors Without Borders found that drugmakers could manufacture semaglutide (Ozempic) for as low as $4.73 for a month’s supply while still bringing in a 50 percent profit margin.

Factoring in rebates and discounts that pharmacy benefit managers receive on Ozempic, Sanders said, the drug still costs patients nearly $600, while Wegovy is more than $800. 

“In the United States of America, we are the only major country on Earth that has not negotiated prices, so you can charge us whatever price you want,” Sanders said. “And that’s what you do.”