Ozempic Linked to Serious Pain in the Pocketbook

Washington, DCOn September 24, the Senate Committee on Health Education Labor and Pensions (HELP) will hear testimony from Lars Jorgensen, Novo Nordisk CEO, about why American consumers pay as much as ten times more for Ozempic and Wegovy than patients in the U.K. and the Netherlands. The popular diabetes and weight loss drugs have already been linked to serious side effects. These well-documented Ozempic side effects include stomach paralysis, a rare form of blindness, thyroid cancer and bowel obstruction.   

Sky-high prices add to the pain and make the drugs unaffordable for patients who need them. “It is clear that Novo Nordisk is ripping off the American people,” concludes Senator Bernie Sanders, chair of the HELP committee.

Life-changing medicine

The class of drugs that includes Ozempic and Wegovy are known as glucagon-like peptide-1 agonists or GLP-1s. The drugs can help people lose up to 15 percent of body weight, which can make them life-changing for adults who suffer from obesity and obesity-related diseases, like diabetes. Not limited to Ozempic and Wegovy (which is essentially the same drug in a different dosage), this group of drugs includes: 

• Rybelsus;
• Trulicity; and
• Monjaro.

They are, in a word, “transformational.”

Novo Nordisk says roughly 25,000 new people try these drugs each week, and 6 percent of all American adults are already taking them, according to a survey by the Kaiser Family Foundation (KFF).

How much?

In 2023, Americans paid $936 a month for Ozempic, compared to $93 for patients in the U.K. In the same year, Wegovy cost Americans $1,349 a month compared with $296 in the Netherlands.

This is not a short-term expense for patients. Many will need to take these medicines for the rest of their lives to maintain the therapeutic benefits. Further, the American market for drugs like Wegovy and Ozempic is huge, including 11 percent of adults who have diabetes and 42 percent of adults who have obesity.

Novo Nordisk has pointed out that the development and testing of a new drug has considerable up-front costs. It has already invested billions of dollars in research and in ramping up production capacity for the drugs. Nonetheless, a company spokesperson has acknowledged that the net price of Ozempic has dropped 40 percent since the drug’s launch. Those savings do not make their way to consumers, however, which the company has blamed on pharmacy benefit managers.

Who pays for healthcare?

The short answer is that everybody does. To go farther down that rabbit hole, though, it is important to look at 4 groups of payors.
Drug companies clearly front much of the cost of researching and developing new drugs. But, as with many medicines, the early development of GLP-1s happened in the public sector and was ultimately financed by the taxpayer.

Patients pay, of course, and uninsured patients pay the most. According to KFF, many uninsured people do not have access to coverage through a job, and some people, particularly poor adults in states that did not expand Medicaid, remain ineligible for financial assistance for coverage. Additionally, undocumented immigrants are ineligible for federally funded coverage, including Medicaid or Marketplace coverage. Medicaid expansion has been associated with significant improvements in healthcare access among adults with obesity. NIH studies suggest that the converse may also be true. Realistically, however, for the poorest of the poor, medicines like Ozempic are simply financially out of reach.

State insurance funds pay, but struggle with staggering costs. Buckling under the strain, North Carolina dropped GLP-1s from its employee insurance plan in March, citing the potential for monthly premiums to double for the 740,000 people the state insures.
Medicare is, by far, the single largest payor. Medicare is not permitted by law to cover drugs for weight loss but will cover Ozempic for enrollees with diabetes and Wegovy for those with cardiovascular disease who are overweight or obese. It reportedly spent $4.6 billion on Ozempic in 2022, compared with $2.6 billion the year before. KFF estimates that Wegovy, alone, could cost Medicare nearly $3 billion a year after estimated rebates.

These expenses are likely to be reflected in patients’ Medicare Part D premiums for those who carry supplemental prescription coverage. Medicare, as a whole, is financed through payroll deductions by everyone who receives a paycheck – including undocumented immigrants.

So, who pays Novo Nordisk for the astonishing cost of Ozempic and Wegovy? Everyone pays, regardless of whether they take, or even have access, to the drug. The Senate HELP Committee hearing will convene at 10am on September 24. Senator Sanders can be expected to bring the fireworks.