How much do Ozempic and Wegovy cost? It is not what you are thinking.


The problem is daunting: powerful but expensive new drugs could help many of the 100 million American adults who suffer from obesity and alleviate a serious public health problem.

But how can the nation afford lifelong treatments for so many people, with sticker prices for each patient ranging from $900 to $1,300 every four weeks?

Some researchers, such as Dr. Walter C. Willett, a professor of epidemiology and nutrition at the Harvard TH Chan School of Public Health, have warned that the drugs could add 50 percent to the country’s health care spending.

“You can see this spiraling completely out of control,” he said.

But there’s one factor that’s often left out of these discussions: List prices for drugs are generally very different from net prices, which companies receive after making secret deals with health insurers or middlemen known as benefit managers. pharmacists. Companies generally do not disclose net prices, but there are data sources that can be used to estimate them.

A recent article published by the American Enterprise Institute revealed that the net prices of new anti-obesity drugs are only a fraction of the published annual list prices.

And as long as drug prices remain the same out of reach For many, economists anticipate they will soon be reduced. More than a dozen companies are developing anti-obesity drugs. As they enter the market, a greater variety of options is expected to cause prices to plummet, as has happened with other expensive drugs.

“My prediction is that as competition increases, prices will decrease accordingly,” said Jalpa Doshi, professor of medicine and director of the economic evaluation unit at the University of Pennsylvania.

For now, manufacturers are reaping the rewards of growing demand.

Investors hope Novo Nordisk, the maker of Wegovy, will earn $4 billion in revenue this year. The company’s other drug, Ozempic, expected to raise 11 billion dollars. Drugs are generating such a bonanza that they represent almost all the latest economic growth in Denmark, the headquarters of Novo Nordisk.

Those revenues are based on net prices.

For your analysisBenedic N. Ippolito, an economist at the American Enterprise Institute, and Joseph F. Levy, a health economist at the Johns Hopkins Bloomberg School of Public Health, relied on data from SSR Health, which uses company financial records and estimates of the number of prescriptions filled.

Economists obtained net prices using SSR Health data for the second quarter of 2022 through the first quarter of 2023. The exception is Mounjaro, made by Eli Lilly, for which only data for the first quarter of 2023 was available.

Net prices, revenue divided by the number of prescriptions in their analysis, appear to be about $700 every four weeks for Wegovy, or about $650 less than the list price; about $300 for Ozempic, or almost $650 less than the list price; and about $215 for Mounjaro, or about $800 less than its list price.

That means Wegovy’s net price is about half its list price, Ozempic’s is almost two-thirds lower, and Mounjaro’s net price is almost 80 percent lower than its list price.

Dr. Ippolito cautioned that because prices and prescriptions vary, these figures could change over time, but added that “these estimates give a good idea of ​​the amount many insurers are likely to pay and the amount of discounts that will be available.” apply.” .”

Pragya Kakani, an economist at Weill Cornell Medical College, analyzed similar data with similar results, but was not involved in Dr. Ippolito and Dr. Levy’s research.

Craig Garthwaite, a health economist at Northwestern University, is especially intrigued by Ozempic and Mounjaro’s net prices. Both are approved for people with diabetes but also cause weight loss. Wegovy, the same drug as Ozempic, is approved for weight loss. But Ozempic’s price is substantially lower than Wegovy’s.

The reason may be that Ozempic has a direct competitor in Mounjaro.

But even Wegovy, which so far has the market for new anti-obesity drugs to itself, has an unexpectedly low net price, said Amitabh Chandra, a Harvard health economist.

“You might have naively thought that these are new drugs that are in high demand, so the rebates would be small or non-existent,” Dr. Chandra said.

“I was surprised,” he said, “by the extent of the refunds.”

Experts say a question arises: What is the value of weight loss to patients and society?

Obesity itself is costly because it increases the risk of costly diseases such as diabetes and heart disease. One study found that obesity was associated with excess annual health costs of $1,861 per person, representing $172.74 billion in additional annual costs.

The Institute for Clinical and Economic Review, an influential nonprofit group, asked about a year ago whether new weight-loss drugs are cost-effective, that is, their value in terms of better quality of life, longer life and benefits for society. exceeds its cost.

Wegs, the group reported, it was not profitable. But the institute relied on an early and less precise estimate of the drug’s net price.

When shown Wegovy’s estimated net price in AEI’s research, the group’s chief medical officer, Dr. David M. Rind, said that if the calculations were correct, Wegovy was profitable but “still poses significant budget challenges.”

Harvard’s Dr. Willett added in an interview: “I don’t think anyone can predict exactly where this will go because competition may drive down prices, and acceptance is still unclear, but the potential cost could go far beyond that.” what we imagine.” have seen.”

Still, the expectation is that with less obesity, there will be fewer costly obesity-related health problems, including type 2 diabetes.

Diabetes can not only lead to kidney failure, blindness and amputations, but it also doubles the risk of heart attacks and strokes.

Patients can also gain relief from the extreme social stigma and often self-hatred that accompanies obesity.

Until recently, the idea that treating obesity would reduce obesity-related health risks was based on anecdotes and correlations, not cause and effect.

Then in August Novo Nordisk announced Results from a large study show that Wegovy can reduce the risk of heart attacks, strokes, hospitalizations for heart failure, and deaths from heart disease by 20 percent.

That result changes the picture, Dr. Garthwaite said.

Some insurers do not cover medications like Wegovy and may consider obesity medications as vanity medications. In response, Some patients are suing their insurers..

With a cardiovascular benefit, he said, that justification for not covering the drugs “is out the window.”

While net drug prices may be lower than expected, they are still too expensive for many potential patients.

Those on Medicare, for example, do not have insurance coverage for Wegovy because the law prevents Medicare from covering weight-loss medications. Few state Medicaid programs cover the drug.

And although Novo Nordisk claims that 80 percent of private insurers cover Wegovy, the drug is not affordable for all insured patients.

Katherine Baicker, a health economist, chancellor of the University of Chicago and Eli Lilly board member, said cheaper health insurance includes copays and deductibles that often put Wegovy out of reach. Patients with low-premium plans offered through the Affordable Care Act would also be excluded.

Dr. Scott Ramsey, a health economist at Fred Hutchinson Cancer Center, worries that poorer patients, who are uninsured or whose insurance requires high copays, will look longingly as wealthier patients get their drugs.

“We spent 15 years talking about the rising cost of obesity to the health care system,” added Dr. Garthwaite, the Northwestern economist. But given a way to reduce that cost, he said, the attitude of some insurers seems to be: “We don’t want you to come up with a solution that costs money.”

Relief should come soon, health economists predict, and companies will rush to develop their own drugs. Competition can lead to lower prices.

This occurred, for example, with drugs for hepatitis C. An effective cure for liver disease initially cost up to $84,000, leading to dire warnings that the cost would be comparable to “total spending in the United States on all drugs.”

The list price of hepatitis C treatment plummeted, as Competitors entered the market.. Pharmacy benefit managers, who negotiate with drug makers, had more influence as the companies competed. Net prices fell accordingly.

A similar scenario could play out with Wegovy, which “is taking advantage of the trend of not having direct competition,” Dr. Doshi said. But that status will end soon.

A version of Eli Lilly’s Mounjaro for obesity is expected to be approved this year, a potential opportunity for insurers to agree to cover Wegovy but not Mounjaro, for example, if the price of Wegovy were reduced enough.

Dr. Ippolito added that with more than 70 medications for obesity In development, he expected that competition would only increase.

For now, although drug prices are likely at their peak, Dr. Chandra, a Harvard health economist, argued that it is imperative to increase access to medicines, even if that imposes a cost on society.

The purpose of health insurance is not to save money, he said, but to “improve quality of life, happiness and self-esteem.”

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