Ozempic maker Novo Nordisk dealing with strain as research finds $1,000 urge for food suppressant could be made for simply $5

Ozempic might be profitably produced for lower than $5 a month whilst maker Novo Nordisk A/S prices virtually $1,000 within the US, in accordance with a study that revives questions on costs for top-selling therapies for diabetes and weight problems.

The blockbuster drug might be manufactured for 89 cents to $4.73 for a month’s provide, figures that embody a revenue margin, researchers at Yale College, King’s Faculty Hospital in London and the nonprofit Docs With out Borders reported within the journal JAMA Network Open. That compares to the month-to-month US record worth of $968.52 for Ozempic, a weekly injection.

Novo declined to offer manufacturing prices for Ozempic and Wegovy, its associated drug for weight problems. The corporate mentioned IT’s making important investments to make sure that the general public has entry to its broadly in style medicine. IT’s making about $6 billion in capital expenditures and spending $11 billion to amass manufacturing services from Catalent Inc. as a part of these efforts, in accordance with an emailed response to questions. 

“This outrageously excessive worth has the potential to bankrupt Medicare, the American folks and our whole Health Care system,” Senator Bernie Sanders, who has held hearings about excessive US drug costs, mentioned in an announcement after the findings got here out. The Vermont unbiased known as on Novo Nordisk to decrease the record worth of Ozempic to $155 a month or much less, in step with what IT prices in different countries

The research extends analysis exhibiting how steep US markups are for GLP-1 medicine like Ozempic and Wegovy and underlines longstanding criticism of costs for diabetes therapies, particularly insulin. On a per-month foundation, Ozempic typically could be produced for lower than varied types of insulin, a lifesaving diabetes drug that’s been obtainable for many years, the research discovered. 

“The revenue margin is immense,” on medicine like Ozempic, mentioned Melissa Barber, a public Health economist at Yale and the research’s corresponding creator. “There must be a dialog in coverage about what’s a good worth.”

Novo’s mixed 2023 gross sales of Ozempic and Wegovy topped $18 billion. Patents linked to the medicine are prone to expire in June 2033, in accordance with estimates from Bloomberg Regulation. Novo shares fell 0.8% in Copenhagen, and have gained 26% this yr.

Transparency Purpose

Drug manufacturing prices are sometimes shrouded in secrecy with little readability on how they relate to costs, if in any respect. Barber and her colleagues used up to date estimates for uncooked ingredient prices and centered on the prices of manufacturing diabetes medicine, together with GLP-1 medicine like Ozempic, together with different diabetes capsules and insulins.

“The purpose of this analysis is to have receipts, to be as clear as potential,” Barber mentioned.

Novo and different drugmakers slashed US costs for some types of insulin by as a lot as 75% final yr beneath strain from the Biden administration. By some estimates, nevertheless, the reductions made these merchandise extra worthwhile as a result of they eradicated rebates paid to pharmacy profit managers, the middlemen who negotiate costs for payers and employers.

Novo mentioned in an e mail that 75% of its gross earnings goes to rebates and reductions to make sure sufferers have entry to merchandise like semaglutide, the lively ingredient in Wegovy and Ozempic. Drugmakers typically cite the excessive prices of analysis that will final years as a cause for his or her costs. Spending on drug analysis and improvement was virtually $5 billion final yr and can rise this yr, Novo mentioned. 

Nonetheless, debate over the price of medicine like Ozempic and Wegovy is ramping up. State Health plans and Medicaid places of work are seeing rising payments for Ozempic and its sister drug Wegovy, elevating questions on whether or not the will increase in value are sustainable. In January, North Carolina reduce off protection of anti-obesity medicines for state workers, citing hovering prices and lack of settlement on pricing from drugmakers.

Surprisingly, the research discovered that the most important value in producing Ozempic isn’t the lively medication, known as semaglutide, however the disposable pens used to inject IT. They are often made for not more than $2.83 monthly’s provide, the authors concluded, based mostly on interviews with former workers and consultants to injection gadget producers. One Ozempic pen is used weekly and lasts a month.

Different Prices

In contrast, the lively drug in Ozempic could be produced for about 29 cents for a month’s provide, or 7.2 cents for a typical weekly dose, the analysis discovered. IT’s not low-cost to make — semaglutide prices over $70,000 per kilogram. However solely a tiny amount of the drug is utilized in every weekly dose.

Different prices embody these of filling every pen, estimated at 20 cents per month-to-month dose, and different chemical substances, which the research estimates at 15 cents per month-to-month dose.  

The evaluation doesn’t embody estimates for the price of making Wegovy. Separate research from the College of Liverpool and elsewhere discovered final yr that Wegovy might be produced for a mere $40 a month.  

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