Why are diabetes, obesity drugs so pricey?

Study raises questions about manufacturer profits

By: Karen Weintraub
USA Today

..... New-generation weight-loss drugs for about $1,350 a month, but a new study from Yale University suggests the cost just 422 to make.
..... Similarly, lifesaving insulin can be manufactured for well under $250 a year, the study found. But it took pressure from the Biden administration to bring annual out-of-pocket costs for many Americans down to about $420.
..... It's been nearly impossible to know how much it actually costs to get a dose from a laboratory bench to a patient;s bloodstream.
..... Now, a Yale postdoctoral researcher has provided rare transparency with some help from Doctors without Borders, a global nonprofit that negotiates with drug companies and information the pharmaceutical giant Sanofi provided - perhaps by accident - to a Senate committee.
..... Pulling back the curtain revealed the prices to be "outrageous," said senator Bernie Sanders, who released a statement shortly after the study published late Wednesday [03/27/2024] in the journal JAMA Network Open.
..... He specifically called out the diabetes drug Ozemppic, which has the same active ingredient as Wegovy, a weight-loss drug. Both are made by the Danish company Novo Nordisk.
..... "Ozempic has the potential to be a game changer in the diabetes and obesity epidemics in America," Sanders said in the statement. "But,, if we do not substantially reduce the price of this drug, millions who need it will be unable to afford it. Further, this outrageously high price has the potential to bankrupt Medicare, the American people and our entire health care system."
..... Sanders complained that Ozempic is available for $155 a month in Canada and just $59 in Germany, and called on the company to match the Canadian price in the U.S.
..... "the American people are sick and tired of paying by far, the highest prices in the world for prescription drugs while the pharmaceutical industry enjoys huge profits," he said in the statement, noting that Novo Nordisk made nearly $15 billion in profits last year. [2023] "A prescription drug is not safe or effective for a patient who cannot afford it."
..... Ozempic sells in the United States for over $900 a month. Wegovuy, which was recently approved to reduce the risk of serious heart problems in people who are overweight, retails for about $1,350, although most people pay far less than the list price.
..... Eli Lilly makes tow drugs in the same GLP-1 class of medications as the Novo Nordisk medications. Both Mounjaro, fro diabetes, and Zepbound, which is the same medication for weight loss, retail for about $1,000.
..... All four drugs have been in high demand and short supply since winning federal approval. Many private insures as well as Medicare and Medicaid typically don't cover these drugs for weigh loss, leaving them out of reach for significant numbers of people.
..... The study found Ozempic and Wegovy cost between 95 cents and $5.50 to produce per unit, or no more tan $22 a month. although the highest dose of Wegovy is higher than the full dose of Ozempic, "the main driver" is the cost of the delivery device, a needle embedded in pen, said Melissa Barber, who led the research.
..... By Barber's calculations, if Medicare and Medicaid fully covered the cost of drugs like Ozemoic and Wegovy for everyone who qualified, it would run taxpayers over $100 billion a year.
..... Barber, who has been researching true manufacturing costs since 2016, said she's trying to introduce some transparency to an imbalanced system.
..... "The system we have is companies can charge literally whatever they want,: she said. "How much should we be paying Novo Nordisk? There's a big difference between a multiplier of 10 and a multiplier of 10 million."
..... Novo Nordisk was reportedly founded to sell insulin and owned largely by a nonprofit so it would plow its earnings back into research. The company now is Europe's most valuable, and its controlling shareholder charity is the largest in the world, Barber said.
..... Frederick Banting, the Canadian credited with co-discovering insulin, sold the patent for $1 because he thought the discovery belonged not to one person, but to the world.
..... The real-world cost of insulin is often higher than it appears and roughly 1 in 4 to 1 in 7 insulin-dependent. Americans ration the drug because of price, barber said.
..... Synthetic insulin, the new study finds, can be made for about $11 for a box of 5 pens, including the cost of the needle and a 10% profit. But the current sales price is more than five times that, Barber found.
..... Novo Nordisk reduced the price of one form of insulin called Levemir, then announced it would discontinue the product in the United States.
..... A year ago, [2023] Eli Lilly, which makes several types of insulin, capped out-of-pocket costs for the drug at $35 monthly at participating retail pharmacies for people with commercial insurance using Lilly insulin. Sanofi has said that most of those who sue its insulin products pay about $15 out of pocket per month, or $180 per year, because of a copay assistance program.
..... Novo Nordisk said it is doing what it can to make its new drugs more affordable and available.
..... "While we are unaware of the analysis used in the (new) study, we have always recognized the need for continuous evaluation of innovation and afford ability levers to support greater access of our products," Nove Nordisk media relations director Jamie Bennett said in a statement. "We continue to support greater health equity to those in need of diabetes treatment and care."
..... Novo Nordisk does not disclose detailed information about costs, but Bennett said three-quarters of its gross earnings go to rebates and discounts to "ensure patients have access to products like semaglutide.
..... Lilly referred in a statement to tis commitment to improving access by 2030 to "quality health care" for 30 million people living with limited resources. The company also collaborates with EVA Pharma to provide affordable insulin to 1 million people with diabetes in low- and middle-income countries, largely in Africa, as well as providing $4.3 billion in medicines last year [2023] to charitable organizations.

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