An April 24 letter from Vermont Sen. Bernie Sanders to Novo Nordisk's CEO began with a heartfelt thank you to the Danish drugmaker for inventing Ozempic and Wegovy, two drugs intended to improve the health of tens of millions of Americans with obesity and disease. related.
But the senator's grateful tone quickly faded.
“As important as these medications are, they will do no good to the millions of patients who cannot afford them,” Sanders wrote. “In addition, if the prices of these products are not substantially reduced, they also have the potential to bankrupt Medicare, Medicaid, and our entire health care system.”
It's a sentiment that crops up regularly among people who are big fans of the drugs and their close relatives, Eli Lilly's Mounjaro and Zepbound. They all work by impersonating a natural hormone called GLP-1 and tricking the body into slowing down digestion and lowering blood sugar.
The drugs help patients lose double-digit percentages of their body weight and maintain it: an average of 12.4% in the Wegovy clinical trial and an average of 18% at the highest dose in the Zepound trial. It is rare for insurance companies to cover GLP-1 drugs only for weight loss, and Medicare is prohibited by law from doing so. But as the pounds drop, so do the risks of serious problems like type 2 diabetes, high blood pressure, heart attacks and strokes, and medications may be covered to prevent these conditions.
“Obesity is a huge public health crisis and for a long time we didn't have treatments that really made a difference,” said Dr. Lauren Eberly, a cardiologist and health services researcher at the University of Pennsylvania. “These medications could change the trajectory of your disease and save your life.”
That makes these medications extremely valuable. Unfortunately, they are also extremely expensive.
The sticker price of Ozempic, which the Food and Drug Administration approved to treat type 2 diabetes, is more than $12,600 a year. Wegovy, a higher-dose version approved for weight loss in people with obesity and as a way for overweight patients with cardiovascular disease to reduce their risk of heart attack and stroke, sells for nearly $17,600 a year.
Mounjaro and Zepbound mimic GLP-1, as well as a related hormone called glucose-dependent insulinotropic peptide, or GIP. Their list prices add up to about $13,900 per year for Mounjaro, which is approved as a diabetes treatment, and about $13,800 per year for Zepbound, the weight-loss version.
Eberly said those prices are simply too high.
“We as a public health medical community, and the community at large, really need to advocate for greater affordability,” he said. “I think it's about time we did a real reckoning on this.”
In the United States, the price of these GLP-1 drugs is exorbitant almost by any measure.
In 2022, the prescription drug that accounted for the largest share of Medicare Part D spending was the blood thinner Eliquis. More than 3.5 million beneficiaries used it that year, at a cost of $15.2 billion, according to the U.S. Department of Health and Human Services.
That total was more than double the amount spent on the next most expensive drug, the type 2 diabetes drug Trulicity, according to the Centers for Medicare and Medicaid Services, or CMS.
But $15.2 billion is practically a rounding error compared to the $268 billion price tag if Wegovy were provided to the 19.7 million Medicare beneficiaries with obesity, researchers estimated in the New England Journal of Medicine.
Even if the drug were prescribed only to Medicare patients with a clinical diagnosis of obesity, the cost would exceed $135 billion. That's more than the $130 billion Medicare spent on all retail prescription drugs in 2022, according to CMS.
“This is a real budget situation for CMS,” said Melissa Barber, a public health economist who studies pharmaceutical policy at Yale School of Medicine. “They're going to have to deal with this.”
No matter how expensive a drug is, it is “extremely unlikely” that Medicare will actually go out of business, a CMS spokesperson said. Spending on Medicare Parts B and D programs resets each year, and if it increases, beneficiaries and the government share the burden of making up the difference, the spokesperson said.
Sanders offered another perspective. A report released this month by the Senate Health, Education, Labor and Pensions Committee, which he chairs, said Americans are charged $1,349 for a 28-day supply of Wegovy, while the same amount of the drug costs $186. dollars in Denmark. $137 in Germany and $92 in the UK.
“The prices for these drugs are so high in the United States that everyone, regardless of whether they use the products or not, will likely be forced to bear the burden of Novo Nordisk's profit maximization strategy through insurance premiums and higher taxes,” Sanders wrote. in his letter to the company.
The financial impact on Medicare is mitigated by a 2003 federal law that prevents the government health insurance program from covering weight-loss drugs. Medications can be added to formularies if they are prescribed for another “medically accepted indication,” such as treating type 2 diabetes or reducing heart risk, but patients can't get it if their only medical problem is obesity.
Rep. Brad Wenstrup (R-Ohio) introduced a bill that would reverse that 2003 ban. Law to treat and reduce obesity has 97 cosponsors from both sides of the aisle, its financial implications have made it difficult to gather the votes needed to move the legislation forward, he said.
In fact, Phillip Swagel, director of the Congressional Budget Office, said last month that if the goal were to provide weight-loss drugs without increasing the deficit, their net cost would have to be reduced by a factor of 10 just to “get in.” in the stadium”. .”
Dr. Caroline Apovian, co-director of the Center for Weight Management and Wellness at Brigham and Women's Hospital in Boston, worries that the budget-busting potential of Wegovy and Zepbound has made private health insurers too afraid to cover them.
“No insurance company will be able to afford to give these life-saving medications to the 42% of Americans with obesity,” he said. “So we have to do something.”
It's not clear exactly what that something should be.
One possibility is that the federal government will ask Novo Nordisk and Eli Lilly for discounts on their GLP-1 drugs. The Inflation Reduction Act empowers Medicare to negotiate lower prices for 10 drugs each year, and Congressional Budget Office researchers expect at least some GLP-1 to appear on the list “in the coming years.”
Private insurers are free to seek their own deals, and the similarities between Novo Nordisk and Eli Lilly's drugs give insurers plenty of negotiating power, said John Cawley, a Cornell health economist.
“They should be more effective at playing each other off,” Cawley said. “They may say, 'We're just going to cover one of these.' Which one do you want to be, the one we cover or the one we don't?'”
There are reasons to think that drugmakers could afford to offer deep discounts if they wanted to.
Novo Nordisk charges Americans $968.52 for a 28-day supply of Ozempic, regardless of whether the dose of the active ingredient semaglutide is 0.5, 1, or 2 milligrams per injectable pen. Likewise, Wegovy is priced at $1,349.02 per 28 days, regardless of whether the weekly injections contain 0.25, 0.5, 1, 1.7, or 2.4 mg of semaglutide.
However, a 2022 report in the journal Obesity estimated that a weekly dose of 2.4 mg of semaglutide could be prepared for “about $40” per month.
Barber is part of a team that also examined how much it would cost to produce various diabetes drugs using methods designed to keep prices low. Her group calculated that a 30-day supply of an injectable medication with 0.77 milligrams of semaglutide could be made for as little as 89 cents, a total that includes a 10% profit. Even with higher costs and a 50% profit, the drug could be manufactured for $4.73 a month, the team reported in March in JAMA Network Open.
“They could be very affordable,” Barber said.
A Novo Nordisk spokeswoman said the company was “unaware of the analysis” used in the study, but recognizes the need to find ways to make its products more affordable. She also said the company is reviewing Sanders' Senate committee report, noting that “75% of our gross sales in the United States go toward rebates and discounts to insurance companies and other payers.”
Eli Lilly representatives did not comment on the cost of its drugs.
If manufacturers don't agree to lower prices voluntarily, the federal government could take stronger action. The Inflation Reduction Act capped what seniors with Medicare Part D plans must pay for insulin at $35 a month. Congress could also set a cap on prices for GLP-1 drugs, although that would be “a last resort,” said Lawrence Gostin, a public health law authority at Georgetown University.
Rationing medications is another way to keep spending under control, health economists say. High sticker prices have limited access to medications, often making income a determining factor in deciding who can take them and who should go without them. But there are other ways to prioritize patients.
A person with a “healthy weight” (defined as a body mass index between 18.5 and 24.9) incurs about $2,780 a year in healthcare costs, on average. That figure increases by $2,781 for a person with a BMI of 30 or higher, according to the 2024 edition of “The Obesity Handbook.”
Most of those added costs are concentrated among people at the upper end of the BMI curve. Someone with a BMI between 35 and 39.9 requires $3,336 in additional healthcare expenses per year, on average, while a person with a BMI of 40 or higher requires an additional $6,493 in healthcare.
“If your goal is to target interventions to reduce health care spending, you'll want to target them at people who are more extreme or morbidly obese,” said Cawley, who co-wrote the manual's chapter on the economic cost of obesity.
Even if all else fails, prices are sure to fall over a period of years as new drugs win FDA approval and make the market more competitive, economists said. And once generic versions become available, prices will plummet. That's what happened with expensive hepatitis C and HIV drugs.
“Over time, things become generic,” Wenstrup said. “They still do the same thing but it costs less.”
