Novo Nordisk blames middlemen in U.S. healthcare system for high prices of weight loss drugs Wegovy and Ozempic

By Louis Goss

While Novo Nordisk charges $1,349 a month for Wegovy in the U.S., the drug costs just $140 a month in Germany and $92 a month in the U.K.

Novo Nordisk has blamed middlemen in the U.S. healthcare system for the high prices of its top-selling weight-loss drugs Wegovy and Ozempic, following the launch of an investigation into the drugs led by U.S. Senator Bernie Sanders.

In a letter to the Senator for Vermont, the Danish pharmaceutical giant said it only retains 60% of the list price on both drugs, with the rest paid out to middlemen.

Novo Nordisk's letter follows the launch of an investigation into the high list prices on the two drugs, by the U.S. Senate Health, Education, Labor, and Pensions (HELP) committee, of which Sanders is chair.

In a letter to Sanders on Friday, Novo Nordisk (DK:NOVO.B), which is now Europe's most valuable company, pointed to middlemen in the complex U.S. healthcare system but said it expects the net price of both Wegovy and Ozempic to fall under current market conditions.

The Danish giant also said it would be willing to work with U.S. lawmakers to tackle "systemic issues" in America's healthcare system in order to increase access to its medicines.

In a letter in April announcing the launch of the HELP committee's investigation into Novo Nordisk, Sanders previously called on the company to provide a detailed breakdown of the costs it has incurred in the process of developing and producing its weight-loss drugs.

The senator's April letter notes that while Novo Nordisk charges $1,349 a month for Wegovy in the U.S., the drug costs just $140 a month in Germany and $92 a month in the U.K.

Novo Nordisk's Ozempic costs $969 a month in the U.S. compared to just $155 a month in Canada and $59 a month in Germany, the April letter says.

Sanders' letter also pointed to research from Yale University showing GLP-1 drugs could be made for as little as $5 a month.

In response, Novo Nordisk said the prices quoted in the study fail to account for the billions the company spent in research and development costs, as the Danish giant said it spent $10 billion developing its GLP-1 drugs.

Ozempic is expected to generate $18 billion in revenue for Novo Nordisk this year while Wegovy is expected to make another $9 billion for the company, with a large slice of those sales expected to be made in the U.S. where 70 million adults are obese.

Earlier this month, the Senate's HELP committee published a report stating Novo Nordisk's "outrageously" high prices threaten to "bankrupt American health care" and lead to a "massive spike in prescription drug spending" that would push up insurance premiums nationwide.

The report said it would cost $411 billion a year to give Wegovy to just half of all Americans with obesity - compared to the $406 billion a year Americans currently spend on all other prescription drugs.

In May, Sanders also wrote an op-ed for Danish newspaper Politiken alleging that Novo Nordisk had failed to live up to its moral ideals, by charging such high prices for its GLP-1 agonists.

Novo Nordisk confirmed it had sent a letter to Sanders but declined to comment. Sanders' office was approached by MarketWatch for comment.

Novo Nordisk has seen its valuation explode due to the success of its GLP-1 agonist weight loss drugs, in a meteoric rise that has transformed it into Europe's most valuable company.

-Louis Goss

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05-28-24 1146ET

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