The CEO of Novo Nordisk is defending the high cost of Ozempic and Wegovy in America, saying the blockbuster drugs are ultimately saving taxpayers money on obesity-related costs.
“If you look at just the cost of obesity in the U.S., it’s a disease that costs Americans more than $400 billion a year,” Lars Fruergaard Jørgensen said in an interview on “NBC Nightly News,” “And we are actually providing products that’s actually helping take that cost burden off.”
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Jørgensen, who spoke to NBC News before the company's "quiet period" ahead of their last earnings report, called accusations that the company is operating as a drug cartel “unfounded.”
His comments come ahead of a highly anticipated Senate committee hearing in September, where he is scheduled to testify about the U.S. pricing of the drugmaker’s hugely popular diabetes and weight loss drugs.
Vermont Sen. Bernie Sanders, chair of the Health, Education, Labor and Pensions Committee, told NBC News in June that he plans to ask Jørgensen why the drugmaker charges up to 10 to 15 times more for Ozempic and Wegovy in the U.S. than it does in other countries. Novo Nordisk charges around $1,300 a month for Wegovy in the U.S., according to a HELP Committee report, while the drug can be purchased for $186 a month in Denmark; $137 in Germany; and $92 in the United Kingdom.
“It is clear that Novo Nordisk is ripping off the American people,” Sanders said.
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The cost of obesity-related care in the U.S. is substantial.
A report published last year from KFF, a nonprofit group that researches health policy issues, found that in 2021, people with employer-based health insurance who were overweight or had obesity had an average of $12,588 in total annual health costs, which is more than double the $4,699 in health spending for those who were not overweight or didn’t have obesity. People who are overweight or have obesity also face higher out-of-pocket costs: an average of $1,487, compared to $698 for those without those conditions.
Still, Stacie Dusetzina, a health policy professor at Vanderbilt University in Nashville, Tennessee, said at Ozempic and Wegovy’s current prices, the savings that could be gained from reducing the burden of obesity-related care aren’t enough to make up for the large increase in spending on the drugs.
“For many people, these drugs might be a very good option for improving their health, but it is unlikely that they will reduce total spending,” Dusetzina said. “In general, the price of these drugs would need to come down a lot in order to have a chance for them to produce overall savings in health care spending.”
A complex health care system
Jørgensen said that he “volunteered” to come speak with the committee about the cost of Ozempic and Wegovy at the September hearing. His announcement to do so came three days after Sanders threatened to hold a vote to subpoena the company’s president, Doug Langa.
Jørgensen said he plans to talk about the “complexities of the U.S. health care system, which is a system we take part in but we cannot change.”
“That takes policy change,” he said, blaming insurance companies and pharmacy benefit managers, or PBMs, for the high out-of-pocket costs patients pay for the drugs.
PBMs work with insurers to negotiate rebates, or discounted prices, from the drug companies, in exchange for including the drug in their coverage. But as PBMs become more consolidated and hold more influence over what drugs patients are covered for, experts say they may be inflating drug costs.
In July, the Federal Trade Commission published an interim report on how PBMs are driving up costs for patients.
“I do acknowledge that some patients have poor insurance,” Jørgensen said. “And if you have poor insurance, it can be difficult to afford your medicines. And for those we have patient support programs where we try to help them out.”
Jørgensen also said the U.S. needs to have a “discussion around what’s the value of these medicines” for patients.
Cynthia Cox, a vice president at KFF and the director of its program on the Affordable Care Act, said that while the drugs can prevent and reduce a number of obesity-related diseases, the cost of the medications remains expensive and it’s unclear how long people will need to stay on them to maintain weight loss and improved health.
“The widespread use of these drugs for weight loss is still relatively new, so I’m not sure there is enough long-term data to fully weigh the costs and benefits,” Cox said.
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