Novo’s Wegovy will bankrupt health system, Sen. Sanders says

Senator Bernie Sanders is upping the pressure on Danish drugmaker Novo Nordisk A/S to lower the cost of its blockbuster weight-loss drug Wegovy, warning in a new report that if prices don’t come down, the medication risks bankrupting the US healthcare system.

“Pricing drugs based on their value cannot serve as a blank check,” according to a report from majority staff for the Senate Health, Education, Labor and Pensions committee that is led by Sanders.

The committee launched an investigation into Novo’s pricing — including roughly $1,350 a month for Wegovy — in late April after a study found its popular diabetes drug Ozempic, which people also use off-label for obesity, could be profitably made for less than $5. 

Sanders, an independent senator from Vermont, has ratcheted up criticism of Novo over what he’s called “outrageous” prices. Earlier this week, he submitted a letter to Denmark’s largest newspaper asking Danes to pressure Novo to lower prices in the US to help battle obesity.

The report focuses on Wegovy, but it says the findings can be applied generally to the new class of weight loss drugs, which includes Eli Lilly & Co.’s Zepbound.

America is a lucrative and crucial market for Novo, which has seen its stock explode as weight-loss drugs have boomed. The majority of sales for Wegovy and Ozempic are in the US, where about 40% of adults have obesity. The company also charges higher prices in the US than in Europe because governments there have the power to negotiate prices.

So far there hasn’t been widespread coverage of weight-loss drugs. Private plans largely haven’t approved these treatments. Medicare doesn’t offer coverage, while about a third of state Medicaid programs do.

In states that do pay for these drugs, some are struggling with mounting bills. North Carolina recently stopped covering the drugs for about 20,000 state employees due to soaring costs.

$400 Billion

Sanders’ committee said it requested pricing data from Novo, which has not yet been provided. Therefore, it assumed a 40% discount from Wegovy’s list price in its analysis. Sanders’ team concluded that if half of American adults with obesity took the drug for weight-loss, it could cost more than $400 billion a year — surpassing what Americans spent on all retail prescription drugs in 2022.

Under this scenario, Medicare and Medicaid could spend $166 billion a year on weight-loss drugs, the report said. If prices don’t come down, Americans could be spending almost $1 trillion on Wegovy and other weight-loss drugs by early next decade. And that’s if just a quarter of eligible Americans are taking them.

“Novo Nordisk takes patient access and affordability very seriously,” Novo said in a statement. “We are committed to working with policymakers within the complex US healthcare system to deliver meaningful solutions.”

Potential Savings

Various studies have recently tried to gauge what it would cost if US government healthcare programs were to cover the drugs for weight-loss for even a fraction of eligible patients. 

“If you take that you should start treating 50% of the population tomorrow, nobody can pay that,” Chief Executive Officer Lars Fruergaard Jorgensen said in an interview with Bloomberg News in March. 

But if healthcare systems can identify patients who will benefit the most from these drugs, money will be saved on other types of chronic care as those people become healthier, according to Jorgensen. And those savings could help pay for broader use of the drug, he said. 

Medicare, the government’s health program for elderly patients and some people on long-term disability, could change its view on medications strictly for obesity.

Wegovy was recently approved by the US Food and Drug Administration to prevent heart attacks and strokes in some people with obesity, opening the door for Medicare to cover the drug for that purpose.  

Sanders has said he doesn’t support broad Medicare coverage of drugs for weight loss at their current prices because of their potential budget impact.

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