Sen. Bernie Sanders (I-VT) told Novo Nordisk CEO Lars Fruergaard Jørgensen that three major pharmacy benefit managers have agreed not to penalize the company for lowering the list prices of its popular weight loss and diabetes medications — but the chief executive isn’t quite buying it.
The senator pressed Jørgensen to lower the prices for Wegovy and Ozempic on Tuesday in a Senate Health, Education, Labor and Pensions (HELP) Committee hearing. As expected, Jørgensen blamed patients’ high costs on pharmacy benefit managers, companies otherwise known as PBMs that negotiate discounts with drug manufacturers and create formularies.
Jørgensen said list prices are intended to be a starting point for negotiations with PBMs, noting that Novo pays the middlemen, on average, 74 cents on every dollar it earns. He also accused PBMs of favoring higher list prices to get steeper discounts.
“They are rewarded based on list price,” he said. “In our experience, products that come with a low list price get less coverage.”
But Sanders said Tuesday that three PBMs have agreed not to limit their coverage of Ozempic and Wegovy if Novo Nordisk slashes the list prices — as long as the net price, or the cost after rebates and discounts, remains competitive. The PBMs are UnitedHealth Group/Optum Rx, Cigna/Express Scripts and CVS Health/Caremark.
“Given this fact, will you commit today that Novo Nordisk will substantially reduce the list price of these drugs in the United States?” Sanders asked Jørgensen.
Jørgensen did not make any commitments, noting that he hadn’t seen the letters.
“I don’t know under which conditions such a promise comes. I haven’t seen any of that,” he said. “I have a bit of concern [about] how this could play out, but anything that can help patients get access to the medicines they need at an affordable price point, we’ll be happy to collaborate around that.”
CVS Caremark pointed to Novo’s NovoLog insulin products as evidence that list price reductions alone wouldn’t affect coverage, noting that 2023 price cuts “did not result in a less favorable formulary placement.”
A CVS Caremark spokesperson said its commitment was “characterized accurately” in Sanders’ remarks and called on Novo to “make these GLP-1 treatments more affordable — in both net and list prices.”
However, Cigna and UnitedHealth Group specified in their letters that competitive net prices remain important to formulary placement.
“Formulary placement decisions for any drug are based on current medical evidence of a drug’s clinical efficacy first and then competitiveness of its net pricing relative to competing drugs,” Cigna wrote.
Patent pressure
Novo Nordisk is also facing pressure from Rep. Lloyd Doggett (D-TX) and Sen. Elizabeth Warren (D-MA) this week, who called on HHS Secretary Xavier Becerra on Monday to use the government’s authority under a US code to allow generic competitors to produce Wegovy and Ozempic.
The idea is similar to march-in rights under the Bayh-Dole Act of 1980, which permits the government — in limited circumstances — to issue new licenses for certain patents based on federally funded research. However, the government’s authority would potentially be broader under US Code 1498, which applies to any patented invention, regardless of federal funding.
“By exercising this existing authority, HHS could help stabilize the health care market while meeting high consumer demands at more affordable prices,” the lawmakers wrote.