The CEO of Novo Nordisk did not commit to lowering the prices of Ozempic and Wegovi during a Senate hearing on Tuesday, despite repeated pressure from Sen. Bernie Sanders (I-VT), chairman of the Senate Health, Education, Labor and Pensions Committee.
Novo Nordisk CEO Lars Fruagaard Jorgensen told senators on Tuesday that pharmacy benefit managers (PBMs), the industry middlemen who negotiate the terms of access to prescription drugs, are to blame for the high costs of Wegovy and Ozempic.
To get favorable insurance coverage, Mr. Jorgensen said his company must pay large rebates to PBMs. In written testimony, he said the net price of Ozempic, which reflects the amount paid per prescription, has fallen 40% since 2018 because of the rebates paid to PBMs.
But in an attempt to preempt the blame game, Sanders announced at the start of the hearing that three major drug middlemen had confirmed that lowering list prices alone would not adversely affect their decisions to cover the drugs in question.
“I am pleased to announce today that I have received written commitments from all major pharmaceutical companies that they will not restrict coverage even if Novo Nordisk were to significantly reduce the list prices of Ozempic and Vigovi,” Sanders said. “In fact, all of the companies have told me that they would be able to expand coverage for these drugs if the list prices were reduced.”
Sanders repeatedly pressed Jorgensen on whether she would work with PBMs to lower drug prices in light of that information.
“Anything that gives patients access, I'm supportive of, and that includes working with and negotiating with those who can help with that,” Jorgensen said.
But he expressed skepticism about what PBMs are specifically promising.
“When we hear PBMs talk about access to lower-cost products, that product needs to get to the patients,” Jorgensen said, “we're open to it if we can be confident that it will work to give patients access to more affordable medicines and that it will.”
Jorgensen noted that lowering list prices doesn't necessarily mean expanding coverage, because PBMs get more rebates from higher-priced products.
He gave the example of the company's insulin product, Levemir: After Novo Nordisk lowered its list price, insurers began cutting coverage, making it available to only 36% of patients, and the company eventually stopped making it, he said.
During the hearing, Sanders and other Democratic senators asked Jorgensen why blockbuster weight-loss and diabetes drugs Wegovy and Ozempic are so much more expensive in the U.S. than in other countries.
“Treat the American people like the rest of the world,” Sanders said. “Stop screwing us.”
Sanders said Americans with diabetes pay as much as $969 a month for Ozempic, but the same drug can be bought for $155 in Canada, $122 in Denmark and $59 in Germany.
Wegovy's list price in the US is $1,349 per month, but Sanders said the same product can be purchased for just $186 in Denmark, $140 in Germany and $92 in the UK.
Sanders noted that Novo Nordisk generates nearly $50 billion in sales from these two drugs alone.
Jorgensen countered that Americans with insurance pay much less than the list price: The diabetes drug Ozempic is covered by 99% of private insurance plans, as well as Medicare and Medicaid, he said.
However, insurance coverage for Wegovy for weight loss is less consistent, and patients are likely to pay the full cost of the drug.
Jorgensen said Wegoby is covered by half of private insurance plans, and most insured patients pay $25 or less for a 28-day supply.
“We're not going to make anyone pay the list price,” Jorgensen said, because the list price is the starting point for negotiations between drug companies and PBMs.
Drug companies and PBMs constantly blame each other for why prescription drugs are so expensive, but the complex system benefits both sides. Even after factoring in kickbacks, Sanders said, Novo Nordisk's net price is still far higher than what people in other countries pay.
“You're making a ton of money in this country, and you're charging us way more in taxes, and you haven't told me why,” Sanders said.
Despite Sanders' efforts to keep the spotlight on Novo Nordisk's pricing decisions, the PBM industry faced criticism from lawmakers.
“Novo Nordisk is not the villain in this case. They are the heroes,” said Sen. Roger Marshall (R-Kansas). “PBMs are making a ton of money here.”
Sen. Tim Kaine (D-Va.) has said Medicare's new powers to negotiate drug prices will help hold drug companies accountable for high prices, but there has been no effort from Congress to reform the PBM industry.
“I, along with some of my colleagues, have come to the conclusion that we're letting PBMs get away with it,” Cain said. “You have an industry that's getting pretty intense scrutiny from this committee in Congress and you have an industry that's not getting it, and it's an industry that's making huge profits but not doing the research or producing the products.”
A bipartisan bill to change certain PBM business practices passed two Senate committees, including the HELP Committee, but did not make it to the floor.
Deep policy disagreements between House and Senate Republicans over the scope of the reforms have led to the bill being shelved this spring, possibly until the lame-duck session after the November election.
Cain also expressed skepticism that PBMs would actually refrain from restricting coverage for Wegovy and Ozempic even if Novo Nordisk lowered its price.
“I'm skeptical that the industry is going to come to the negotiating table today and suddenly have a change of heart and start doing the right thing, given all the fanciful talk they're making about what they're going to do,” he said.
