Novo Nordisk’s top executive vowed to reopen price negotiations with insurers covering the company’s obesity and diabetes drugs at a congressional hearing on Tuesday in which lawmakers pressed Novo to lower the cost of the fast-selling medicines.
At the hearing, Novo CEO Lars Fruergaard Jørgensen said the company would consider new talks with insurers about the list prices of Wegovy and Ozempic if they follow through on a pledge to keep the medicines on their formularies. Novo has claimed that insurers have previously pulled coverage of its other medicines — such as insulins — once the company lowered list prices, because it resulted in less revenue for payers afterwards.
“If it works in a way where patients get access to a more affordable medicine, and we have certainty that it actually happens and not like when we lowered prices in prior rounds — that less people got access to our medicine — we will be positive towards it,” Jørgensen said.
Jørgensen was facing questions from Sen. Bernie Sanders, I-Vt., the chair of the Senate Health, Education, Labor and Pensions Committee. The Senate HELP committee convened the hearing to discuss the prices of Wegovy and Ozempic, the in-demand obesity and diabetes medicines that have quickly become some of the pharmaceutical industry’s fastest-selling products.
Sanders came to the hearing with, what he claimed, is a commitment from Cigna, UnitedHealth Group and CVS Health to commit to covering the two drugs even if lower list prices lead to lower rebates. The initiative for doing so was the difference in list and after-rebate prices for Wegovy and Ozempic in the U.S. compared to other countries.
In Germany, for instance, Ozempic has a list price of $59 per month compared to $969 in the U.S. Wegovy’s monthly cost in the U.K. is $92, compared to $1,349 in the U.S., according to the committee. Through the first six months of 2024, Novo recorded $8.4 billion in Ozempic revenue and $3.2 billion in Wegovy sales in the first half of 2024, most of which was from the U.S.
“All we are saying, Mr. Jørgensen, is treat the American people the same way that you treat people all over the world,” Sanders said.
Jørgensen argued that 80% of people with commercial insurance can access the drugs for $25 or less in out of pocket costs per month. Sanders countered that the remaining costs are passed on to consumers in the form of higher premiums.
Committee Republicans, along with Jørgensen, targeted pharmacy benefit managers, the middlemen that negotiate drug costs. These PBMs, they argued, give pharmaceutical companies no incentive to lower their list prices, because the fees they collect are based on the size of the rebates they can negotiate with drugmakers.
“Watever the cost is, Novo Nordisk keeps 26% of it, and the PBMs extract 74%, so really, the PBMs are making the bank here,” said Sen. Roger Marshall, R-Kan., who pressed Sanders to bring a PBM reform bill to a Senate vote.
Sen. Bill Cassidy, R-La., also cautioned that cutting prices too far would reduce drugmakers’ ability to re-invest profits into research and development, an argument pharmaceutical companies have long made. The industry is already dealing with the effects of the Inflation Reduction Act, which for the first time allowed Medicare to negotiate the prices for some prescription drugs.
“Without a profit motive, without something in return, it’s unclear that these drugs, or any drug is going to be developed,” Cassidy said. “There is a tension between the need to incentivize innovation and the ability to afford that innovation. And we are here struggling with that balance.”
Rebecca Pifer 
Emily Olsen