US Senate committee investigates weight-loss drug costs as NC negotiates with manufacturer

A Senate committee is investigating the prices that Novo Nordisk charges for its blockbuster medications, Ozempic and Wegovy, which are highly effective at treating diabetes and obesity but carry steep price tags.

The investigation comes as North Carolina officials attempt to negotiate lower prices with the drugmaker. North Carolina State Health Plan officials voted to cancel coverage of the drugs for weight loss this month citing the high cost of coverage for at least 22,000 state employees and family members who get their health care through the state plan.

Sen. Bernie Sanders, I-Vt., chair of the Senate Committee on Health, Education, Labor and Pensions, said in an interview that the prices must “be lowered in order for consumers to get it, and for governments not to go bankrupt providing it.”

The North Carolina State Health Plan’s board of trustees voted 4-3 in January to end coverage of GLP-1 drugs such as Wegovy for the purpose of weight loss. About 740,000 state employees and their family members get their health care through the state plan. Plan officials have said that even though only about 3% of the plan’s members are on the drugs, they’re so expensive that continued coverage — and a predicted rise in demand — would force the plan to double monthly premiums on many members.

Sanders made reference to North Carolina's decision in a letter sent Wednesday to Lars Fruergaard Jorgensen, Novo Nordisk’s chief executive. Representatives of the State Employees Association of North Carolina discussed the issue with Sanders and members of the North Carolina congressional delegation in Washington last week.

The list price of Ozempic, which is authorized for Type 2 diabetes, is around $968 per package. Wegovy, which is approved for weight loss and to reduce the risk of heart problems in some adults with obesity, costs $1,349.02 per package.

In his letter to Jorgensen, Sanders wrote that the committee was requesting internal communications on the prices of these drugs in the United States, which is higher than the cost in other countries. The committee also requested information on why the company charges more for Wegovy when the two medications contain the same compound, semaglutide, and asked whether Novo Nordisk would “substantially reduce” the prices of both medications. Sanders requested a response by May 8.

A spokesperson from Novo Nordisk wrote in a statement that the company agrees “that access to these important treatments is essential for patients in Medicare, Medicaid and the commercial markets,” but added that “it’s easy to oversimplify the science that goes into understanding disease and developing and producing new treatments, as well as the intricacies of U.S. and global health care systems.” The spokesperson said that Novo Nordisk “remains committed to working with policymakers to advance solutions to support access and affordability for all patients.”

Sanders said he also intended to look at Eli Lilly, which makes the rival medications Mounjaro and Zepbound. “We’re not just picking on Novo Nordisk,” he said. “This is a problem across the board.”

The Centers for Disease Control and Prevention estimates that nearly 42% of American adults have obesity, and that more than 11% of the population has diabetes. “You think about just the sheer number of people who could be eligible for taking these products, and it starts to really boggle your mind thinking about how to pay for that,” said Stacie Dusetzina, a health policy expert at Vanderbilt University School of Medicine. Those costs are compounded by the fact that patients may need to stay on these medications for the rest of their lives, she added.

Many major insurance plans cover the medications, but the extent of coverage varies widely. As health plans and employers have struggled to keep up with the cost, some have restricted who can access these drugs or have ended coverage. “We’re past the breaking point,” said Lindsay Allen, a health economist at Northwestern Medicine.

State Medicaid plans are not required to cover anti-obesity treatments; many cover Ozempic for diabetes. Medicare Part D plans do not cover drugs for weight loss alone, although those plans may cover Ozempic for diabetes and Wegovy when it is used to treat cardiovascular concerns.

This patchwork coverage, and the high cost of the medications, have left many patients unable to access them.

“No drug, no matter how great it is, is worth anything if people cannot afford it,” Sanders said.

Experts said they expected prices to eventually drop as new competition hits the market. But Allen said she was skeptical that an investigation would bring prices down quickly. “Now is not the time that any of these manufacturers are going to be like, ‘Hey, out of the goodness of our hearts, let’s go ahead and bring down these costs.’”

North Carolina State Treasurer Dale Folwell, the chairman of the state's health plan, said Wednesday that he welcomed the Senate committee's investigation into the drug manufacturers. “We are ready to stand with and assist any entity that seeks to hold manufacturers accountable to putting the welfare of patients and the sustainability of public health plans over mega-profits,” Folwell said in a statement.

Novo Nordisk said this week that the company has presented multiple options to North Carolina, but that the state has rejected them.

“State Health Plan officials are abandoning their obligation to employees living with the chronic disease of obesity and denying them coverage for safe and effective treatments,” Nicole Ferreira, a company spokeswoman said in a statement to WRAL News on Tuesday. “Denying patients insurance coverage for important and effective FDA approved treatments is simply irresponsible.”

Ferreira added: “We stand committed to finding meaningful solutions to manage costs, but we steadfastly oppose leaving patients without coverage. … We are disappointed that the state of North Carolina is choosing short-term alternatives over longer-term health benefits and cost savings.”

A version of this article originally appeared in The New York Times. WRAL State Government Editor Jack Hagel contributed additional reporting to this article.