A study released by researchers from Yale University, King’s College Hospital, and Doctors Without Borders suggests that the popular diabetes drug Ozempic could be manufactured for less than $5 per month, even though Novo Nordisk charges close to $1,000 per month for the injection in the U.S. before insurance. This has raised questions about the high price of the drug, as well as similar drugs for weight loss, which belong to a new class known as GLP-1s. Despite the increasing demand for these medicines, many insurers are dropping them from their plans due to cost, leaving some patients unable to afford the treatment.
The study’s findings indicate that Ozempic can be produced for less than various forms of insulin, with estimates ranging from 89 cents to $4.73 for a month’s supply. This cost-based analysis suggests that GLP-1s could be manufactured at significantly lower prices, potentially expanding access to these important medications. Novo Nordisk’s list price for a monthly package of Ozempic is $935.77 before insurance and rebates, highlighting the stark difference between production costs and market prices for these drugs.
Novo Nordisk declined to provide specific production costs for Ozempic and Wegovy, its weight loss drug, but emphasized its significant investment in research and development. The company stated that it spent nearly $5 billion on R&D last year and will invest even more to meet the demand for GLP-1s. It also mentioned that a large portion of its earnings are dedicated to rebates and discounts to ensure patient access to its products. Out-of-pocket costs for Ozempic vary depending on insurance coverage, with options for savings cards and discounts for certain patients.
Research from the University of Liverpool and others found that Wegovy, a similar GLP-1 drug, could be produced for $40 per month, further highlighting the disparity between manufacturing costs and market prices for these medications. A survey conducted by Evercore ISI indicated that a significant portion of individuals currently taking GLP-1s are paying $50 or less out of pocket per month for their medication. This suggests that despite high list prices, many patients are able to access these drugs at a more affordable cost through various discounts and programs offered by the pharmaceutical companies.
The pressure to reduce the high costs of diabetes care, particularly insulin, has been ongoing for years, with political and public scrutiny aimed at pharmaceutical companies like Novo Nordisk. The study’s results add to the existing conversation around drug pricing and the need for more transparency and accessibility in healthcare. As the demand for GLP-1s continues to rise, finding a balance between affordability for patients and fair compensation for drug manufacturers remains a key challenge in healthcare policy and regulation.
