Novo Nordisk CEO Defends Ozempic Pricing in Senate Hearing

In a recent Senate testimony, Lars Jørgensen, the CEO of Novo Nordisk, defended the pricing of Ozempic, the company’s widely used medication for diabetes and weight loss. This testimony comes amid growing scrutiny from lawmakers regarding the high list price of Ozempic and its impact on American healthcare costs. During his address to the Senate Committee on Health, Education, Labor, and Pensions, Jørgensen emphasized that Novo Nordisk is committed to reducing healthcare expenses for Americans suffering from obesity and type 2 diabetes, conditions that collectively cost the U.S. approximately $1.7 billion and $413 billion annually, respectively.

Jørgensen highlighted that since its introduction in 2017, the price of Ozempic has decreased by about 40%. He noted that a similar trend has been observed for Wegovy, another product from Novo Nordisk aimed at weight management in adults who are overweight or obese, which has also seen a price drop since its launch in 2021. Despite these reductions, the current monthly retail prices for Ozempic and Wegovy are still significant, standing at approximately $968.52 and $1,349.02, respectively.

The issue of affordability has drawn critical attention, particularly from Senator Bernie Sanders (I-Vt.), who stated that executives from unnamed pharmaceutical companies indicated that generic versions of Ozempic could potentially be sold for less than $100 a month. This statement raises questions about the pricing strategies of brand-name drug manufacturers and their impact on patients needing these essential medications.

Jørgensen did not shy away from criticizing the American healthcare system, asserting that patients requiring Ozempic or Wegovy often face challenges in accessing prescriptions for these drugs. He expressed Novo Nordisk’s willingness to collaborate with the Senate HELP committee to address systemic issues that hinder patient access and inflate costs. However, he refrained from specifying the exact structural problems that need to be addressed.

Looking ahead, Jørgensen revealed that Ozempic and Wegovy will become eligible for price negotiations with the U.S. Centers for Medicare and Medicaid Services (CMS) starting in 2025, a development that may lead to further reductions in their costs. Ulrich Otte, the senior vice president of finance and operations at Novo Nordisk, indicated last week that it is “very likely” these medications will qualify for negotiations, signaling a potential shift in how drug prices are managed in the U.S. market.

A surprising contrast emerged when comparing the prices of Ozempic in the U.S. to those in other countries. According to a report from the HELP committee released in April, a monthly supply of Ozempic is priced at approximately $59 in Germany and $155 in Canada, highlighting the significant disparity in drug costs across borders.

Ozempic, primarily a weekly injection approved for treating type 2 diabetes, has gained popularity as an off-label prescription for weight management, leading to increased scrutiny and subsequent shortages within the U.S. As demand has surged, Senator Sanders has vocalized his concerns regarding Novo Nordisk’s pricing strategies, calling for reductions in what he described as “outrageously high” prices for both Ozempic and Wegovy. He has previously cited a study from Yale University claiming that the manufacturing cost of Ozempic is less than $5, a claim that underscores the vast profit margins enjoyed by pharmaceutical companies.

In response, Jørgensen pointed out that Novo Nordisk invested $4.2 billion in research and development for diabetes and obesity treatments in 2023. This substantial investment is aimed at advancing medical science and improving treatment options for patients suffering from these conditions. Furthermore, he stated that Novo Nordisk has committed $30 billion to expand its manufacturing capabilities since last year, a move primarily focused on enhancing production for Ozempic, Wegovy, and other obesity treatments currently in development. The company anticipates that these investments will significantly increase its production capacity by 2028.

In summary, the Senate testimony by Lars Jørgensen has brought to light the complex issues surrounding drug pricing, healthcare access, and the pharmaceutical industry’s responsibilities. While he defended the pricing strategies of Novo Nordisk, he also acknowledged the challenges faced by patients and the ongoing scrutiny from lawmakers. As negotiations regarding drug prices loom on the horizon, the future of medications like Ozempic and Wegovy remains a critical topic for both policymakers and the public, especially as the healthcare landscape continues to evolve in response to growing demands for affordability and access to essential treatments.