Novo Counters Sanders' GLP-1 Pricing Complaints, Criticizes Pharma Middlemen

Novo Nordisk has defended itself following accusations from the Senate’s Health, Education, Labor and Pensions (HELP) committee, chaired by Senator Bernie Sanders, alleging that the pharmaceutical company’s expensive GLP-1 drugs are putting a strain on the U.S. healthcare system. The Danish drugmaker responded with a detailed letter, blaming the high costs on intermediaries such as pharmacy benefit managers and insurance companies.

According to Novo, these middlemen are responsible for inflating the prices of their diabetes and obesity treatments. The company claims to retain only about 60% of the list prices for its GLP-1 medications in the U.S., after rebates and fees are accounted for. This revelation was confirmed by a Novo Nordisk spokesperson in an email to Bloomberg.

The dispute began when the HELP committee launched an investigation in April into the pricing of Novo’s semaglutide-based drugs, citing unreasonable costs. The letter highlighted that Novo’s obesity drug Wegovy costs approximately $1,349 per month in the U.S., significantly higher than its price in Germany ($140) and the United Kingdom ($92). Similarly, the diabetes medication Ozempic is priced at around $969 per month in the U.S., compared to far lower costs abroad.

Senator Sanders also referenced a Yale University study which suggested that Ozempic could be manufactured profitably for roughly $5 a month. However, Novo Nordisk quickly rebutted these claims. Camilla Sylvest, the company's Executive Vice President of Commercial Strategy and Commercial Affairs, pointed out the complexities of varying healthcare systems globally. Sylvest emphasized that differing national reimbursement structures and out-of-pocket costs for patients make direct price comparisons impractical.

In their letter to Sanders, Novo Nordisk also highlighted the extensive investment required for developing their GLP-1 drugs, which exceeds $10 billion. The company argued that Sanders' criticisms do not consider the significant resources and time devoted to bringing these drugs to market.

In May, Sanders further elaborated on his budgetary concerns, suggesting that if half of the adults in the U.S. with obesity began using Wegovy or similar medications, the cost could surpass the $411 billion Americans spent on all retail prescription drugs in 2022.

Despite the controversy, Novo Nordisk’s semaglutide drugs have seen remarkable commercial success. The portfolio, which includes Ozempic, Wegovy, and the oral diabetes medication Rybelsus, collectively generated 145.8 billion Danish kroner (approximately $21.1 billion) in 2023. This marks an almost 90% increase over the previous year.

Novo’s defense underscores the complexity and expense of pharmaceutical development, along with the intricate dynamics of global healthcare systems. While the company maintains its stance on the justifiability of its drug prices, the debate highlights the ongoing tension between drug affordability and the cost of innovation in the pharmaceutical industry.