Sanders: Why is Ozempic More Expensive in the US Than Other Countries?

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The popular diabetes and weight loss drug Ozempic has been at the center of a heated Senate inquiry regarding its pricing in the United States. Senators have raised concerns over why Americans pay significantly more for the drug compared to other countries. The ongoing debate, led by Sen. Bernie Sanders, questions whether the U.S. pharmaceutical system is stacked against patients, leaving them to pay exorbitant prices for life-saving medications like Ozempic.

Why Does Ozempic Cost So Much?

One of the key points brought up in the Senate hearing is the substantial difference in Ozempic's list price across countries. In the U.S., the drug costs patients about $969 per month, while in Germany, the same medication is priced as low as $59. Sanders criticized this disparity, urging Novo Nordisk, the company behind Ozempic, to lower its prices in the U.S.

Novo Nordisk’s CEO, Lars Fruergaard Jørgensen, defended the company's pricing strategy, arguing that the complexities of the American healthcare system play a significant role in the high costs. According to Jørgensen, the U.S. market is burdened by intermediaries known as pharmacy benefit managers (PBMs), who negotiate drug prices on behalf of insurers. These PBMs, Jørgensen claims, pocket substantial rebates, resulting in higher patient costs. In fact, he noted that Novo Nordisk pays back 75 cents of every dollar earned in rebates and fees to these industry middlemen.

The Impact of Research and Development Costs

One of the other factors Jørgensen highlighted was the high cost of research and development (R&D) that goes into creating drugs like Ozempic. He noted that Novo Nordisk had invested over $10 billion in developing its GLP-1 drugs, which include Ozempic and its sister drug Wegovy. While the drugs have been highly successful, the company argues that these profits must cover not only the cost of the drugs but also the R&D costs for other treatments that may never reach the market. This, according to Jørgensen, explains the high list prices in the U.S.

However, critics, including Sanders, were quick to point out that the actual cost of manufacturing Ozempic could be as low as $5 per month, based on a study from Yale University. Sanders accused the pharmaceutical company of using the U.S. market as a “cash cow,” where patients pay significantly more than in other countries, despite comparable development costs globally.

The Senate’s Concerns Over U.S. Pricing

During the inquiry, many senators expressed frustration over the pricing discrepancies between the U.S. and countries like Canada, Germany, and the United Kingdom, where Ozempic is sold for a fraction of the price. Jørgensen defended the U.S. system, stating that list prices are often a starting point for negotiations with insurers, and most insured patients pay far less than the list price. He mentioned that over 80% of insured patients pay less than $25 per prescription. However, this explanation did little to assuage the concerns of lawmakers, particularly for those patients who are uninsured or have high deductibles, leaving them to bear the full cost.

A Complex Healthcare System to Blame?

A significant portion of the hearing focused on how the American healthcare system’s complexity contributes to inflated drug prices. According to Jørgensen, simply lowering the list price of Ozempic wouldn’t necessarily help patients, as PBMs might restrict access to the drug if it becomes less profitable for them. This argument echoes ongoing concerns that the U.S. system’s reliance on PBMs is exacerbating the problem, and recent lawsuits from the Federal Trade Commission against major PBMs highlight these issues further.

Senators from both sides, however, continued to push back, arguing that lowering the list price could still offer relief to many patients. Despite the CEO’s defense, Sanders maintained that Novo Nordisk could make a significant impact by treating U.S. patients the same as those in other countries, where price regulations keep costs lower.

What Does This Mean for Patients Who Need Ozempic?

The outcome of this Senate inquiry could have broad implications for millions of Americans dependent on Ozempic and similar drugs. Novo Nordisk faces increasing pressure to lower its prices in the U.S., but the company remains focused on navigating the intricacies of the American healthcare system.

While it’s clear that Novo Nordisk and the Senate agree that something must change, whether this will lead to lower prices for patients remains uncertain. For now, patients continue to navigate a challenging system where affordability and access to critical drugs like Ozempic are far from guaranteed.

Are you using Ozempic? What do you think of Ozempic’s prohibitive cost? Tell us what you think.

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