Sen. Bernie Sanders (I-Vt.) announced on Sept. 24 that the nation’s top pharmacy benefit managers (PBMs) will expand coverage for Ozempic and Wegovy if the company behind the popular diabetes and weight-loss drugs lowers the list prices. Sanders’ announcement was made during Senate hearings Tuesday on the high cost of the two drugs.
As part of the Senate’s investigation into the affordability of Ozempic and Wegovy, prescribed for millions of patients for weight loss or diabetes management, Sanders reassured the drug manufacturer that it would not be penalized by leading PBMs for lowering the list price of the medications.
PBMs are the middlemen between drug manufacturers and insurance providers. They negotiate drug prices and control which drugs are listed on formularies—lists of prescriptions covered by insurance plans.
Although in theory PBMs should lower drug prices, critics say that PBMs actually lead to increased list prices of drugs as drug manufacturers hike list prices to offset discounts or rebates offered in exchange for a place on PBM formularies. Higher list prices mean bigger rebates, and therefore more profits, for the middlemen.
The major PBMs are CVS Caremark, Express Scripts, and Optum Rx. They make up almost 80 percent of the PBM marketplace.
Manufactured by Denmark-based pharmaceutical company Novo Nordisk, Ozempic and Wegovy contain the same active ingredient: semaglutide. Ozempic is FDA-approved to treat Type 2 diabetes and cardiovascular risk in some patients.
Wegovy—which has a higher maximum dose and comes in a single use injectable pen—is FDA-approved for weight loss and reducing cardiovascular risk in overweight adults.
“I am delighted to announce today that I have received commitments in writing from all of the major PBMs that if Novo Nordisk substantially reduced the list price for Ozempic and Wegovy, they would not limit coverage,” Sanders said during a hearing held by the Senate Health, Education, Labor and Pensions Committee.
“In fact, all of them told me they would be able to expand coverage for these drugs if the list price was reduced,” said Sanders, chair of the committee.
Sanders called the affordability of the drugs “a profound moral issue.”
“One out of four Americans are unable to afford the prescription drugs that their doctors prescribe,” he said, citing the Kaiser Family Foundation.
Higher List Prices in US
Without insurance, a 28-day supply of Wegovy costs just over $1,349, while a similar supply of Ozempic costs around $969.“It is not our intention that anyone should pay the list price,” said Jorgensen.
“The list price is the starting point for our negotiation against the PBMs and insurance companies in bringing coverage of our medicines to patients,” he continued.
Nonetheless, net prices are expensive, Sanders said.
“Even factoring in all of the rebates that PBMs receive, the net price for Ozempic is still nearly $600, over nine times as much as it costs in Germany, and the estimated net price of Wegovy is over $800, nearly four and a half times as it costs in Denmark,” he said.
During the question and answer portion of the hearing, Sanders repeatedly asked Jorgensen why drug prices are higher in the United States than elsewhere.
“Please tell me why you think it is appropriate to charge Americans nine times more for the same exact product that you sell in Germany,” Sanders asked the Novo Nordisk CEO.
In response, Jorgensen said, “I think it’s important to say that these are not comparable data.” Most Americans with insurance have access to the medicine at $25 or less for a month’s supply, he said, adding, “It’s the price point at the pharmacy counter we have to talk about.”
When Sanders countered that Americans may not be paying the price directly at the pharmacy, but are doing so indirectly in the form of higher insurance premiums, Jorgensen said that “Premiums have not gone up ... while profit goes up for the middleman.”
Jorgensen declined to make immediate assurances that he would work with PBMs to lower the prices of the drugs.
“I don’t know under which conditions such a promise comes. I haven’t seen any of that,” he said, adding that he would be “happy to do anything that helps patients.”
In his testimony, Jorgensen addressed the question of drug prices from a broader perspective. The price of the two drugs, he said, reflects decades of costly research that went into developing them, as well as “the significant costs of developing the first-in-the-world manufacturing facilities to meet demand.”
A ‘Complex Ecosystem’
Despite higher list prices in the United States, Jorgensen said, incentives for innovation “often enable the American people to access groundbreaking therapies like Ozempic and Wegovy before anyone else in the world.” The United States was the first country to have access to the two drugs, and remains one of just a few countries where Wegovy is sold.Nonetheless, “the modern U.S. health care system is a complex ecosystem with many players, and we do not control what patients pay for their medications,” he said. “Unfortunately, the U.S. system has created unintended consequences that can harm patients and interfere with affordable access to prescription drugs.”
Jorgensen also put the blame on PBMs.
“Because of this complexity in the U.S. health care system—with PBMs asking that more money be paid to them in the form of rebates, discounts, and fees each year—unilateral manufacturer cuts to list prices do not consistently alleviate the cost burden on patients, and may in fact create harmful unintended consequences,” he said.
A voluntary move by Novo Nordisk in January to lower the price of several insulin products ultimately resulted in one product being discontinued, Jorgensen said.
Assurances from PBMs
UnitedHealth Group, the parent company of Optum Rx, told Sanders in a letter, obtained by The Epoch Times, that OptumRx would not limit access or give less-favorable treatment toward Ozempic and Wegovy if their list and net prices decreased.“We prioritize our choices based on the evidence supporting medical appropriateness and lowest net cost,” wrote UnitedHealth Group CEO Andrew Witty in the letter.
“We believe list prices for medicines are too high and support policy solutions and manufacturer actions that lead to lower list prices,” he said. “Assuming the net price remains the same or lower, a manufacturer lowering a medicine’s list price would not lead to less favorable formulary placement by Optum Rx—particularly for high-demand drugs like Ozempic and Wegovy.”
In her letter to Sanders, Melissa Schulman, senior vice president for government and public affairs at CVS Health, also said that her company would not have a less-favorable formulary placement for Ozempic and Wegovy.
She said that “when Novo-Nordisk drastically reduced the price of their insulin, Novolog, in 2023, it did not result in a less favorable formulary placement with Caremark.”
“There is simply no way for our clients to make these drugs available to everyone who will eventually qualify at their current price points,” she added.
Anti-Trust Complaint
On Sept. 20, the Federal Trade Commission (FTC) announced it had brought an antitrust complaint against Express Scripts, CVS Caremark, Optum Rx and other groups “for engaging in anticompetitive and unfair rebating practices that have artificially inflated the list price of insulin drugs, impaired patients’ access to lower list price products, and shifted the cost of high insulin list prices to vulnerable patients.”Rahul Rao, deputy director of the FTC’s Bureau of Competition, said in a Sept. 20 statement that medication gatekeepers “have extracted millions of dollars off the backs of patients who need life-saving medications.”
The Epoch Times reached out to Express Scripts, CVS Caremark, and Optum Rx for their reaction to Sanders’ announcement and to the lawsuit.
David Whitrap, vice president of external affairs at CVS Health, told The Epoch Times that the FTC suit against CVS Caremark “has missed the mark entirely.”
“Three brand drugmakers control nearly the entire insulin market, and without competitive lower cost generic alternatives, they raised their list prices by as much as 500 percent in lockstep with one another prior to 2012. That’s when CVS Caremark fueled increased competition by creating new formulary options to fight back against these manufacturer price hikes,” he said.
“For many years, Optum Rx has aggressively and successfully negotiated with drug manufacturers and taken additional actions to lower prescription insulin costs for our health plan customers and their members, who now pay an average of less than $18 per month for insulin,” the company said.
This article has been updated to include additional information from Senate testimony by Lars Jorgensen.
