Novo Nordisk Retains 60% of List Price for Ozempic and Wegovy
Novo Nordisk, the pharmaceutical company behind medications for diabetes and obesity, has revealed that it retains around sixty percent of the list price for its drugs, Ozempic and Wegovy, in the United States. These drugs have been widely used in the treatment of obesity and diabetes. However, the high cost of these medications has faced criticism recently.
In an interesting turn of events, the European pharmaceutical division of Wegovy has reached out to Senator Bernie Sanders, expressing their willingness to work with politicians to address the systemic issues that prevent patients from accessing these drugs. They argue that focusing solely on the list price does not provide an accurate picture, as a significant portion of the money goes to intermediaries within the complex healthcare system in the US.
Senator Sanders has been pressuring Novo Nordisk to lower the price of Wegovy, shedding light on the disparity between production costs and market prices. While a previous study found that these drugs could be manufactured for less than $5 per month, Ozempic currently costs $968.52 per month, and Wegovy is priced at $1,349.02 USD per month. This stark difference in pricing has prompted an investigation by the Senate Health, Education, Labor, and Pensions Committee, which Sanders chairs.
Novo Nordisk justifies the high pricing by highlighting the considerable investment required for medical technology development. Despite the lengthy development process that typically spans over ten years, the pharmaceutical company claims to have spent over ten billion dollars on GLP-1 medications.
The potential market for GLP-1 drugs is projected to reach $150 billion by the early 2030s due to their applications extending beyond obesity and diabetes treatment. Analysts estimate that Ozempic alone will generate approximately $18 billion in sales this year. With over forty percent of the US population classified as obese, a significant portion of Wegovy’s revenue is expected to come from the US market, potentially amounting to around nine billion dollars.
According to Reuters, the global spending on obesity medications exceeded $24 billion last year. Forecasts suggest that this figure could skyrocket to $131 billion by 2028, with an anticipated yearly growth rate of 27%. This surge in spending is driven by the increasing demand for effective treatments for obesity.
Despite efforts by Novo Nordisk and Eli Lilly and Company to increase production, the availability of Wegovy and another drug called Zepbound remains limited. Both companies have been ramping up production volumes, but the high demand continues to outstrip supply.
As of the most recent update, Novo Nordisk’s shares were trading at $134.29, representing a slight decrease from their previous price.
In other related news, a recent study has linked weight loss medications for diabetes to stomach paralysis. Scientists have developed an mRNA vaccine against H5N1 bird flu, which shows promising results in preventing the disease.