Arthur Allen
On May 13, Sen. Bernie Sanders (I-Vt.) printed an open letter to Novo Nordisk on the entrance web page of a number one Danish newspaper, urging the hometown firm to stay as much as its altruistic requirements by decreasing U.S. costs for its blockbuster diabetes and weight reduction medicine.
What Sanders didn’t notice was that Denmark, a rustic of 6 million, was enduring its personal disaster over tips on how to pay for the Novo Nordisk medicine Ozempic and Wegovy.
Most different developed nations, together with Denmark, negotiate down drug prices for his or her residents, paying costs which are a fraction of these within the United States. But when a drug is efficient and costly, pharmaceutical corporations can play hardball on pricing. And Novo Nordisk did, no less than initially, pushing the Danish well being system to its limits.
The nation’s socialized well being system had for years lined Ozempic as a diabetes remedy, however in 2022 docs started prescribing it for weight reduction, too, and shortly they “emptied all the money boxes in the entire public health system,” mentioned University of Copenhagen professor Jens Juul Holst, a co-inventor of the drug.
Countries all over the world are scuffling with how and when to pay for Ozempic, Eli Lilly’s Mounjaro, and different medicine in the identical chemical class, significantly when they’re prescribed for weight reduction. Indeed, the sky-high costs paid within the U.S. set a bar that pharmaceutical corporations can use as they negotiate with different well being programs.
In Denmark, with prescriptions for the medicine gobbling up 18% of regional drug budgets in 2023, officers have been contemplating the unthinkable in a system that prides itself on free cradle-to-grave protection: forcing sufferers to pay out-of-pocket for Ozempic — a drug made within the nation.
In America, in the meantime, tightening insurance coverage insurance policies are making it more durable for sufferers to get the medicine, that are listed at as much as $1,350 a month.
“There are changes month to month in our clinic in terms of the supply, coverage, which drug is available,” mentioned Michael Blaha, director of scientific analysis for the Johns Hopkins Ciccarone Center for the Prevention of Cardiovascular Disease. He mentioned that docs and sufferers have been “playing a constant game of prior authorization and appeals.”
In specific, use of the medicine for weight reduction is a hot-button subject. Novo Nordisk and Lilly are battling for protection — joined by some docs and affected person advocate teams, many funded by the drug corporations. They are urgent to overturn a 2005 federal rule that prohibits Medicare from reimbursing weight reduction remedies.
“There’s a strong assumption that Medicare is going to cover these drugs for obesity treatment sooner or later,” mentioned David Kim, an assistant professor of drugs and public well being sciences on the University of Chicago. If Medicare pays, he added, business insurers will in all probability observe go well with.
The affect on federal and business insurance coverage budgets, he mentioned, is dependent upon three unanswered questions: How many individuals will ultimately get the medicine? For how lengthy will they take them? And at what worth?
The potential Medicare market alone is gigantic. In 2020 about 13.7 million Medicare beneficiaries, round 1 / 4 of the full, have been identified as chubby or overweight, in keeping with Juliette Cubanski and Tricia Neuman, researchers at KFF, a well being info nonprofit that features KFF Health News. Assuming a 50% low cost on a $1,300 month-to-month listing worth for Wegovy, that’s a $107 billion price ticket. The total federal share of Medicare Part D spending in 2024 was projected to be $120 billion.
Novo Nordisk spent $7.6 million lobbying Congress over the previous 12 months, and lobbying disclosures present that almost all of that was to advertise payments within the House and Senate to broaden use of the GLP-1 medicine.
Pressure from drugmakers has been relentless. Pfizer, which has a GLP-1 drug in improvement, commissioned a white paper by consultancy Manatt arguing that Medicare regulation already permits fee for these anti-obesity medicine, since they’ve advantages past weight reduction. Novo and different pharmaceutical corporations have funded analysis that exhibits well being care financial savings on continual illness via use of the medicine.
But the Congressional Budget Office, whose judgments about the price of such insurance policies weigh closely in whether or not they’re ultimately adopted, has but to offer a last opinion. In a March presentation, the workplace mentioned it was “not aware of empirical evidence that directly links the use of anti-obesity medicines to reductions in other health care spending.”
Prime Therapeutics, a pharmacy profit supervisor whose purchasers are employers that fund drug plans, launched a research this 12 months discovering that solely a 3rd of sufferers placed on a GLP-1 drug stayed on it for a full 12 months. That means insurance coverage protection of the medicine might generally be a waste of cash, mentioned Patrick Gleason, Prime Therapeutics’ chief of analysis, since analysis exhibits that sufferers have a tendency to achieve the load again after cessation.
That doesn’t fully shock Holst, the Danish scientist, who mentioned the GLP-1 medicine’ suppression of urge for food is for many individuals “so miserably boring that you can’t stand it any longer and you have to go back to your old life.”
One reply may be weight reduction packages that make use of the GLP-1s for, say, a 12 months, adopted by upkeep remedy with cheaper medicine, Kim mentioned.
One approach or one other, many specialists within the subject say, it’s wise to cowl weight reduction earlier than the onset of the continual sicknesses related to weight problems, like Type 2 diabetes.
Indeed, as a result of weight problems is related to so many comorbidities, drugmakers are actually doing research exhibiting that GLP-1 medicine additionally present constructive affect on circumstances like sleep apnea and coronary heart, liver, and kidney illnesses.
Yet even advocates for the medicine’ use acknowledge uncertainty about how lengthy it might take for such well being advantages to kick in, or whether or not shorter-term use would forestall or ameliorate longer-term sicknesses.
“Modeling the impacts is complicated,” mentioned Alison Sexton Ward, a analysis scientist on the University of Southern California’s Schaeffer Center for Health Policy and Economics. “Medical costs won’t go down immediately. The prevented diseases may be years in the future.”
Starting subsequent 12 months, Medicare beneficiaries’ Part D out-of-pocket prices might be capped at $2,000, that means U.S. taxpayers will foot the invoice for many Medicare drug bills. So it’s no shock the Congressional Budget Office believes the federal government will launch Medicare worth negotiations for semaglutide below the Inflation Reduction Act “within the next few years,” per its March presentation.
According to the phrases of the act, Ozempic can be eligible for presidency worth negotiation as early as subsequent 12 months, with new costs mirrored in 2027. The negotiated unit worth would apply to all types of the drug — Ozempic; its higher-dose, weight loss-branded model, Wegovy; and a tablet, Rybelsus.
Where the value would land is unclear. Wegovy prices sufferers as much as $365 a month in Denmark, which usually doesn’t cowl the drug — and about $140 in Germany and $92 within the U.Okay.
Meanwhile, generic drugmakers are gearing as much as promote their variations of semaglutide. Those seem set to go on sale in China and Brazil as early as 2026. Americans are more likely to have to attend till no less than 2032 due to U.S. patent restrictions. The Federal Trade Commission has tried to nibble on the medicine’ exclusivity durations by difficult Novo Nordisk patent filings on applicators used to inject the medicine — which might prolong their market exclusivity as much as 30 months.
For now, sufferers who can’t afford or entry the medicine usually flip to compounded kinds, which aren’t FDA-approved though their uncooked materials comes from FDA-registered factories. Blaha has “a number of patients” who can’t entry the branded medicine and present up on the clinic with compound drug vials.
Two weeks earlier than Sanders printed his letter in Denmark, Novo Nordisk reduce the native worth of Ozempic by 34%, to $130 a month — about 15% of its U.S. listing worth. The authorities, which had warned it might cease paying for the drug, agreed to cowl Ozempic diabetes remedy, however just for sufferers who had first tried a less expensive drugs equivalent to metformin.
Wegovy, the identical drugs however at a better dose, focused to weight reduction, would in almost all instances stay the affected person’s duty at $365 month-to-month, a worth that, whereas modest by U.S. requirements, has sparked intense discussions concerning the uneven affect of sophistication on its affordability, mentioned Nils Jakob Knudsen, an endocrinologist in Copenhagen.
The calculus of the medicine’ worth is complicated for the Danes, he added, as a result of “the blooming economy for Novo is also driving our very healthy Danish economy.”
Novo Nordisk’s market valuation of $591 billion on Aug. 2 was significantly larger than the whole GDP of Denmark.
KFF Health News is a nationwide newsroom that produces in-depth journalism about well being points and is likely one of the core working packages at KFF—an impartial supply of well being coverage analysis, polling, and journalism. Learn extra about KFF.
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