Novo Nordisk’s new diabetes drugs treat diabetes, protect cardiovascular health, and they might even prevent diseases like Parkinson's and Alzheimer's. But for many U.S. patients, an absurdly high price tag puts them out of reach.
More than 38 million Americans have diabetes, 16.8 million of them over the age of 65. In addition to increasing the risk of heart disease and stroke, if it goes untreated, diabetes is also a major risk for developing dementia.
There’s good news: A new class of highly effective diabetes drugs that hit the market a few years ago has proven effective for managing blood sugar, and the benefits don’t stop there.
This type of drug — called a GLP-1 agonists or GLP-1 analogs, because they’re designed to mimic the effect of a hormone in the body called GLP-1 — also helps people lose weight. And, emerging evidence suggests they reduce the risk of heart attacks or stroke. Further, they may even prevent Parkinson’s, Alzheimer’s and other forms of dementia. (Research is underway.)
However, some big brand names in this drug category, Wegovy and Ozempic, are under scrutiny… for being outrageously expensive.
Wegovy and Ozempic are both the same drug, semaglutide, sold by drugmaker Novo Nordisk under two different brand names in different doses, the former prescribed for weight loss and the latter for Type 2 diabetes. In the U.S., at the time of writing, Novo Nordisk is charging patients as much as $935.77 for Ozempic and $1,350 per month for Wegovy.
Are Wegovy and Ozempic covered by insurance?
Wegovy may be covered by private insurers, however some of them might require extra paperwork or ask you to try other less expensive treatments before providing coverage. Medicare does not currently cover Wegovy if it is solely used for weight loss. Meanwhile, Ozempic is covered by private insurers and Medicare as long as it is prescribed for diabetes. Even with Medicare, Ozempic may still cost hundreds of dollars per month out of pocket, while the cost of the drug under other insurance policies varies.
Thus, depending on a patient’s insurance policy, it’s not unlikely they will be priced out of these benefits. Sometimes, people who qualify for a drug are wrongly rejected by their insurance company — as many as 49 percent of insurance coverage denials are overturned on appeal.
Why are Wegovy and Ozempic so expensive?
The high U.S. price tag has drawn heat, in part because it doesn’t have to be the case: In other countries, like Germany, the same drug costs just $59. According to recent research, it would only cost the manufacturer $22 per month to make and profit from the drug.
Dr. Heather Ferris, an endocrinologist and neuroscientist at the University of Virginia, told Being Patient that getting diabetes under control reduces cognitive decline and the risk of dementia.
“Access to insulin has improved dramatically since the Affordable Care Act passed, capping the price on insulin,” Ferris said. However, she added that the new class of diabetes drugs, which includes Wegovy, is frequently out of reach for patients due to their price tag.
Even for those patients who can afford these medications, there are supply issues and shortages, Ferris said.
“Patients are calling around to different pharmacies each month trying to find the medication, being switched to a different one that happens to have available supply, or doing without because the entire process is too frustrating or confusing,” she noted. “In order to have an impact on overall dementia rates, these medications will need to be both more affordable and produced in much larger supply.”
Making Wegovy and Ozempic more affordable
Melissa Barber, a Yale researcher who led the study estimating the cost to produce these drugs, explained that Medicare will not be able to negotiate the price of drugs like Wegovy before 2027, costing the healthcare system one trillion dollars over the next few years.
“The United States has relatively weak provisions for price negotiation — until relatively recently, Medicare had been prohibited by Congress from negotiating lower drug prices,” Barber told Being Patient. As a result, she said, these drugs cost more than nine times as much in the U.S. than in other countries with similar income levels.
It is also difficult to discuss what the price of a drug should be if people don’t know how much it actually costs to make.
“More information on manufacturing costs in the public domain is foundational to any policy discussion of what is a fair price,” Barber said.
The study also found it would cost drug companies less than $120 per year to manufacture insulin, though the markup on this diabetes medication isn’t as high.
Earlier this year the Biden administration pressured insulin manufacturers to cap out-of-pocket costs for these drugs to $420 per year. And this spring, Vermont Senator Bernie Sanders sent a letter to the CEO of Novo Nordisk declaring an investigation into what his office described as “outrageously high prices” for the drugs.
“As important as these drugs are, they will not do any good for the millions of patients who cannot afford them,” Sanders wrote in a letter to Novo Nordisk. “Further, if the prices for these products are not substantially reduced, they have the potential to bankrupt Medicare, Medicaid and our entire health care system.”
