Novo Nordisk, Lilly must cut US prices of weight-loss drugs, Biden says

[July 03, 2024]  By Patrick Wingrove and Manas Mishra

(Reuters) -U.S. President Joe Biden and Senator Bernie Sanders called on Novo Nordisk and Eli Lilly to reduce the prices of their weight-loss and diabetes drugs, in a jointly authored opinion piece published in USA Today on Tuesday.

Surging demand for Novo and Lilly's drugs, which have been shown to help patients lose as much as 20% of their weight, has propelled their shares to record highs, and led some analysts to forecast the market for those treatments reaching $150 billion by the early 2030s.

More than 40% of Americans are obese, according to the Centers for Disease Control and Prevention.

Biden and Sanders in their opinion piece said it could cost $411 billion per year if only half of obese adults took Novo and Lilly's weight-loss drugs, which is $5 billion more than Americans spent on all prescription drugs in 2022.

"If the prices of these drugs are not substantially reduced, they have the potential to bankrupt the American healthcare system," Biden and Sanders said.

"If Novo Nordisk and other pharmaceutical companies refuse to substantially lower prescription drug prices in our country and end their greed, we will do everything within our power to end it for them. Novo Nordisk must substantially reduce the price of Ozempic and Wegovy," they said.

Shares of the Danish drugmaker closed down 1.1% on Tuesday. Indianapolis-based Lilly closed down 0.8%.

A month's supply of Novo's diabetes drug Ozempic carries a list price of $935.77 in the U.S., while its obesity treatment Wegovy is priced at $1,349.02 per month, according to the drugmaker's website. Lilly's Mounjaro, a diabetes drug that is also used off-label for weight loss in the U.S., costs about $1,100 per month.

"The cost of both Ozempic and Wegovy has decreased about 40% since launch and over 80 percent of Americans with insurance only pay $25 or less per month for these important medicines", Novo Nordisk told Reuters in an emailed response.

"Unfortunately, even when we lower our prices, patients in the United States often don't receive the savings - this is a problem," Novo said.

Lilly said, "We offer Zepbound and Mounjaro for as low as $25 a month to those eligible for our savings card program", adding that, "treating these conditions today will save money."

Lilly Biotechnology Center is shown in San Diego, California, U.S. March 1, 2023 after Eli Lilly and Co on Wednesday said it will cut list prices by 70% for its most commonly prescribed insulin products, Humalog and Humulin, beginning from the fourth quarter of this year. REUTERS/Mike Blake/File Photo

HIGH LIST PRICES

Shares of other drugmakers including AbbVie, Bristol Myers Squibb and Pfizer closed down between 1% and 3% on Tuesday. "Eli Lilly and Novo are the leaders in the space - when they start to show weakness, the whole group suffers," said Dennis Dick, an investor at Triple D Trading.

Most Americans pay a percentage of the list price out-of-pocket typically set by their healthcare insurance plans.

Novo and Lilly also offer discounts that can bring the out-of-pocket cost of their treatments down to as little as $0 a month for patients with insurance and $550 for those without.

Sanders earlier this year noted that Wegovy can be purchased for $140 in Germany and $92 in the UK.

Although Biden and Sanders did not say what actions they might take, both have records of pushing drugmakers to lower prices.

"Comparing list prices in the U.S. to other countries ignores patient affordability programs and hundreds of billions of dollars in discounts and fees paid to PBMs by pharmaceutical companies that should lower the costs of medicines for Americans, but unfortunately this system can drive prices higher", Lilly said.

Sanders last year questioned insulin makers, including Novo and Lilly, and pharmacy benefits middlemen on their roles in keeping drug prices high, and is expected to grill Novo CEO Lars Jorgensen on the price of Ozempic and Wegovy in September.

Biden's signature Inflation Reduction Act, signed into law in 2022, aims to save $25 billion annually by 2031 by requiring drugmakers to negotiate the prices of select expensive drugs with the U.S. Centers for Medicare and Medicaid Service, which oversees the Medicare plan for millions of Americans age 65 and older.

(Reporting by Patrick Wingrove in London, Manas Mishra and Pratik Jain in Bengaluru; Editing by Arun Koyyur, Anil D'Silva, Bill Berkrot and David Gregorio)

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