Sen. Bernie Sanders (I-Vt.), Chair of the Senate Health, Education, Labor, and Pensions Committee, announced that he is launching an investigation into the pricing of Novo Nordisk’s GLP-1 based medicines for diabetes and obesity, Ozempic and Wegovy. Sanders told media that he may expand the inquiry to include other medicines in the class.
What Sanders is asking for:
- The letter from Sanders to the Novo Nordisk leadership poses six questions, including a request for documents about the pricing and lifecycle management of the medicines, as well as details on patent filings and research and development investments.
A shaky foundation: Sanders’ efforts are built on cherry-picked data and ignore evidence that the medicines are priced in a cost-effective manner:
- Sanders based part of his rationale for launching the investigation on a recent study attempting to determine a sustainable “cost-based price” for these medicines. That study has been criticized for its flawed methodology that disregards the full range of R&D costs in its estimate and for inaccurately suggesting that medicines should be priced based on their cost of production rather than the value they deliver for patients, the health system, and society.
- Sanders does not acknowledge the overwhelming evidence that the medicines are cost-effective. Even the Institute for Clinical and Economic Review, using methodologies that underestimate the value of medicines, has suggested that GLP-1 medicines deliver value.
- The effort also ignores the impact of pharmaceutical benefit managers in making medicines accessible and affordable for consumers, determining which medicines are available on formularies and how much patients must pay out-of-pocket. GLP-1 manufacturers provide substantial rebates designed to assist patients, but there is little attention to whether patients are able to share those saving.
What the research says: the value delivered by this class of drugs will only become more apparent.
- The investigation also pays little attention to the ongoing medical advances in areas of major public health importance being delivered by GLP-1 therapies. Novo Nordisk has shown that Wegovy can reduce heart disease outcomes in patients with risk factors, and Lilly has announced Phase 3 data showing Zepbound improves sleep apnea in patients with obesity.
- Taken together, it is estimated that more than $1 trillion in costs can be connected to obesity, making efforts to incentivize ongoing innovation critical to the long-term fiscal sustainability of the health care system.
BIO’s view: The biopharmaceutical industry delivers best for the American people when it brings cost-effective medicines that effectively address unmet needs and pressing public health concerns. Efforts to address affordability should be based on validated evidence that takes the entire innovation ecosystem into account. Congress should also prioritize passage of The Treat and Reduce Obesity Act (TROA), bipartisan, bicameral legislation that would expand coverage of health care specialists and weight management treatments for Medicare patients.
