Novo Nordisk CEO Agrees to Work With PBMs to Negotiate Lower Semaglutide List Prices

Five months after opening an investigation into pharmaceutical giant Novo Nordisk’s pricing of blockbuster semaglutide drugs Ozempic and Wegovy,¹ members of the US Senate Committee on Health, Education, Labor, and Pensions (HELP) may have made a breakthrough—however small—in drug pricing: During a nearly 2 and a half hour hearing on Tuesday, September 24, Novo Nordisk President and CEO Lars Fruergaard Jørgensen committed to working with the HELP Committee and pharmacy benefit managers (PBMs) to negotiate lower list prices for these semaglutide drugs.²

Jørgensen’s agreement came after Senator Bernie Sanders (I, Vermont) presented written commitments from the “Big 3” PBMs—Cigna’s Express Scripts, UnitedHealth Group’s Optum Rx, and CVS Health’s Caremark—that should Novo Nordisk lower their list price of these drugs, they would not limit coverage. “In fact,” Sanders said in his opening statement, “all of them told me that they would be able to expand coverage for these drugs if the list price was reduced.”^3,4

Global Prescription Pricing Under Scrutiny

That the prices for Wegovy and Ozempic are sky-high in the US is well known. However, Sanders illustrated the stark difference between prices paid by Americans and prices paid across European countries, pointing out that in Jørgenson’s home of Denmark the list prices were only $122 and $186 for Ozempic and Wegovy, respectively, compared with the $969 and $1349 list price Americans are faced with.

Sanders opened the hearing by displaying a comparison of semaglutide prices in the US with countries in Europe. | Image credit: Screenshot from the Senate HELP Committee Hearing, September 24, 2024.

And although Novo Nordisk—like Eli Lilly, manufacturer of glucagon-like peptide-1/gastric inhibitor polypeptide therapy tirzepatide (Mounjaro, Zepound)—offers patient assistance programs based on the net price, not everyone is eligible to take advantage of these lower prices. “If you are uninsured, you pay the full list price,” Sanders said. “If you have a large deductible, you pay the full list price. If you have coinsurance, the percentage of the price you pay at the pharmacy counter is based on the list price.” And, he added, “75% of Americans—over 190 million people—with insurance are unable to access Wegovy through their insurance policies.”

“The simple truth is that we pay, by far, the highest prices in the world for prescription drugs,” Sanders continued, “and that is a major factor in the health care crisis we are experiencing.”

The prescription drug pricing problem is not unique to Novo Nordisk: Across conditions and disease states, some Americans choose to forgo treatment with the crucial or life-saving medications that their health care providers prescribe due to high costs. These costs bleed into nearly every aspect of health care, including hospital care and insurance premiums. However, since the launch of Ozempic in 2018, Novo Nordisk has made nearly $50 billion in sales from its semaglutide products, with 72% of that revenue coming directly from sales in the United States.⁴

“Let’s be clear, nobody here is asking Novo Nordisk to provide charity to the American people,” Sanders said. “All we are saying…is, treat the American people the same way that you treat people all over the world. Stop ripping us off.”

The Role of PBMs in Semaglutide Pricing

Jørgensen acknowledged that it is clear patients are struggling to navigate the complex US health care system. “It’s also clear that no single company alone can solve such vast and complicated policy changes,” Jørgensen added before promising to remain engaged with the committee to develop solutions that address the structural issues that harm patients and increases costs.

“Any prospect of patients not getting access to the medicine they need is terrifying, and we have to solve this challenge together,” Jørgensen said. “I wish there were more at the table today so we could have a discussion about how to do that together.”

READ MORE: Semaglutide Therapy Associated With Fewer COVID-19–Related Deaths

For Jørgensen, a crucial sticking point in semaglutide pricing in the US is the American insurance system, for which Novo Nordisk does not set prices. Although Novo Nordisk does offer patient assistance programs for under- and uninsured patients, “they are not a real solution,” Jørgensen said. “I am proud about those…[but] patients should have access to medicines via insurance,” especially those living with complex chronic diseases such as obesity and type 2 diabetes.

This point made by Jørgensen is a valid one: Pharmaceutical manufacturers and health insurance plans are not the only pieces of what Ranking Member Senator Bill Cassidy, MD (R, Louisiana), a gastroenterologist by trade, acknowledged is a complex system riddled with what he described as “perverse incentives” including insurance benefit design, price transparency, regulatory barriers, and government discount programs.

As with many current issues in the realm of drug pricing, PBMs are a crucial piece of this complicated puzzle, and discussions of PBMs roles in semaglutide pricing comprised a substantial portion of the hearing. “We’re letting PBMs get away scot-free,” said Senator Tim Kaine (D, Virginia). “One industry researches, one doesn’t. One industry produces lifesaving treatments, one doesn’t. One industry is super-duper profitable, another one is profitable, and the one that’s super-duper profitable is the one that’s not doing any research and not producing any lifesaving innovations.” And one industry, he added, “is under fairly intense scrutiny by this committee in Congress, and one isn’t.”

In a report compiled by Sanders’ office ahead of the hearing,⁴ key findings specifically hit back against Novo Nordisk’s assertion that insurance plans and PBMs are the sole parties responsible for high prices in the US—a claim Jørgensen also made while testifying at the HELP Committee’s May 2023 hearing on insulin affordability. Documents⁵ provided by Novo Nordisk to the Senate Finance Committee in 2019 as part of their investigation into insulin pricing stated that “PBMs and other players…have been unwilling to offer assurances that NNI [Novo Nordisk] would maintain its formulary positions if it no longer offered rebates.”

However, during Tuesday’s hearing, Sanders informed Jørgensen that representatives from all 3 major PBMs had committed—in writing—that if Novo Nordisk reduced semaglutide’s list price, they “would not limit access to Ozempic and Wegovy, and would not take these drugs off of their formularies.” When pressed by Sanders, and later by Senator Maggie Hassan (D, New Hampshire), to commit to PBM negotiations, Jørgensen agreed that he would be happy to look into anything that would help patients access affordable medications.

READ MORE: FTC Files Lawsuit Against “Big 3” PBMs for Drug Price Inflation

“The experience we have is one of losing access when we lower prices,” Jørgensen said. “I understand that perhaps the PBMs have changed, and I’d be happy to collaborate with them on this, because anything that helps patients to get access and affordability, we are supportive of.”

Click to expand.

When asked by Sanders if he was prepared to substantially lower the list price of semaglutide in the United States, if PBMs kept their word, Jørgensen said, “I have to understand what this entails. Because when I hear statements that PBMs would accept a low list price, it needs to go all the way to the patients…. If it works in a way where patients get access to a more affordable medicine, and we have certainty that it actually happens, we would be positive towards that.”

Navigating PBM Formulary Inclusion

Even with these guarantees in writing, Jørgensen expressed concerns based on previous experiences with insulin pricing negotiations. When asked by Senator Susan Collins (R, Maine), he explained that when Novo Nordisk announced changes in list prices for several insulin products⁶—prefilled pens and vials of basal, bolus, and premixed insulins Levemir, Novolin, NovoLog, and NovoLog Mix 70/30—these products were subsequently dropped from drug formulary coverage.

“We lowered the list price by 65%...just to realize that after we dropped the price of Levemir, the PBMs dropped coverage,” Jørgensen said. “It went from being on 90% of insurance schemes to being only on some 35%.”⁷ This shift in coverage led to a dramatic decrease in production volume, which impacted the company’s ability to manufacture the product. These manufacturing issues led to Novo Nordisk announcing on November 8, 2023, that the company would begin phasing out, then permanently discontinue, Levemir in the US as of December 31, 2024.⁸ In addition to manufacturing constraints and formulary losses, the company cited the availability of alternative options. One of those alternative options, Novo Nordisk’s insulin degludec (Tresiba), was not among the insulin products included in the company’s price lowering plans.

Hassan also raised questions about Lemevir—one of the only long-acting insulins approved for use during pregnancy—during a tense exchange with Jørgensen, asking if Novo Nordisk would agree to provide interested companies with the necessary information to produce the drug.

“We have collaborated and followed up with all those who were brought forward as potential manufacturers, but we have not found anyone interested in manufacturing it,” Jørgensen said. “If there is a company interested…or if the government wants to manufacture it, we will be happy to collaborate.”

READ MORE: Obesity Management Resource Center

Check out part 2 of this article for a closer look at testimony on the role of drug pricing in pharmaceutical research and development.

References

1. News: Chairman Sanders launches investigation into outrageously high price of Ozempic and Wegovy in the United States. News release. Bernie Sanders, US Senator for Vermont. April 24, 2024. Accessed September 25, 2024. https://www.sanders.senate.gov/press-releases/news-chairman-sanders-launches-investigation-into-outrageously-high-price-of-ozempic-and-wegovy-in-the-united-states/

2. Media advisory: Sanders to lead HELP Committee hearing on outrageous Ozempic and Wegovy prices with Novo Nordisk CEO. News release. US Senate Committee on Health, Education, Labor, and Pensions. September 20, 2024. Accessed September 25, 2024. https://www.help.senate.gov/chair/newsroom/press/media-advisory-sanders-to-lead-help-committee-hearing-on-outrageous-ozempic-and-wegovy-prices-with-novo-nordisk-ceo

3. News: Sanders releases new report, PBMs welcome lower list prices for Ozempic and Wegovy. News release. Bernie Sanders, US Senator for Vermont. September 24, 2024. Accessed September 25, 2024. https://www.sanders.senate.gov/press-releases/news-sanders-releases-new-report-pbms-welcome-lower-list-prices-for-ozempic-and-wegovy/

4. US Senate Health, Education, Labor, and Pensions Committee. Majority Staff Report. Novo Nordisk’s untenable drug pricing strategy in America: greed, greed, greed. September 24, 2024. Accessed September 25, 2024. https://www.sanders.senate.gov/wp-content/uploads/9.23.2024-Novo-Nordisk-Untenable-Strategy-final.pdf

5. Documents produced by Novo Nordisk for the Senate Finance Committee. 2019. Accessed September 25, 2024. https://www.finance.senate.gov/imo/media/doc/Novo_Redacted.pdf

6. Novo Nordisk to lower US prices of several pre-filled insulin pens and vials up to 75% for people living with diabetes in January 2024. News release. Novo Nordisk. March 14, 2023. Accessed September 25, 2024. https://www.novonordisk.com/news-and-media/latest-news/lowering-us-list-prices-of-several-products-.html

7. Hearing Before the Senate Committee on health, Education, Labor, and Pensions, 118th Cong (2023-2025) (testimony of Lars Fruergaard Jørgensen, president and CEO, Novo Nordisk). Accessed September 25, 2024. https://www.help.senate.gov/imo/media/doc/fa475d00-dca5-9b2c-4565-e5bdc272566d/2024-09-24%20Lars%20Fruergaard%20J%C3%B8rgensen%20Written%20Testimony.pdf

8. Warren, Shaheen, Warnock seek answers from Novo Nordisk on discontinuation of Levemir insulin after announced price reduction. News Release. Elizabeth Warren. April 17, 2024. Accessed September 25, 2024. https://www.warren.senate.gov/newsroom/press-releases/warren-shaheen-warnock-seek-answers-from-novo-nordisk-on-discontinuation-of-levemir-insulin-after-announced-price-reduction