Weight loss drugs have risen in popularity. In the past three years, the number of young people taking the drugs increased by 594.4%. A new study suggests that the drugs could profoundly impact the U.S. health care system if they become widely covered by Medicare and Medicaid.
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Sen. Bernie Sanders, chair of the Senate Committee on Health, Education, Labor and Pensions, is leading an investigation into Novo Nordisk, the parent company of Ozempic and Wegovy. The investigation focuses on how the company prices its weight loss medication.
Novo Nordisk responded to the investigation in a letter, emphasizing its willingness to work with lawmakers to lower prices.
Unless they can get it covered by insurance, customers can expect to shell out a pretty penny for the medication. The sticker price for a year’s supply of Ozempic is more than $12,600. Meanwhile, Wegovy retails for almost $17,600 per year.
Zepbound and Mounjaro, weight loss drugs owned by Eli Lilly and Company, go for a little less than $14,000 per year.
If someone qualifies to have the medications covered by Medicare or Medicaid, the price burden falls on federal and state programs to cover the cost. Researchers estimate that providing Wegovy to all 19.7 million Medicare beneficiaries with obesity could cost $268 billion. If the drugs were to be given to patients who are clinically diagnosed with obesity, the cost would still exceed $135 billion.
The total would be more than what Medicare spends in an entire year on retail prescription drugs.
The Senate committee found major disparities in the price that Americans pay for the drugs compared to other countries.
According to the committee’s report, the same drugs can each be purchased in Denmark, Germany and the U.K. for less than $200.
“If the prices for these products are not substantially reduced they also have the potential to bankrupt Medicare, Medicaid, and our entire health care system,” Sanders said in a letter to Novo Nordisk. “The prices for these drugs are so high in the United States that everyone — regardless of whether they use the products — will likely be forced to bear the burden of Novo Nordisk’s profit maximizing strategy through higher insurance premiums and taxes.”
In response to the report, Novo Nordisk disclosed that it retains approximately 60% of the list price of Ozempic and Wegovy in the U.S. The rest of the total is paid to the “middlemen involved in a complex U.S. healthcare system,” according to the company. Additionally, the company highlighted its $10 billion investment into the drugs over the span of a decade, but maintain that it will work with lawmakers on pricing to tackle “systemic issues.”
Demand for the drug isn’t dwindling, with 42% of Americans classified as obese.
The drugs’ prices are pushing the issue of drug pricing into the spotlight as Congress and Novo Nordisk weigh whether or not to make them affordable.