A recent study suggests that despite Novo Nordisk A/S’s NVO high monthly charge of close to $1,000 for its blockbuster diabetes drug Ozempic (semaglutide) in the U.S., it could be produced for less than $5 a month.
The study, conducted by researchers at Yale University, King’s College Hospital in London, and Doctors Without Borders, sheds light on the escalating costs of top-selling diabetes treatments, including Ozempic and similar GLP-1s used for weight loss.
The soaring demand for these medications contrasts with more insurers dropping coverage due to their high prices, leaving many patients unable to afford them.
This study adds to the mounting pressure on Novo Nordisk and other pharmaceutical companies to address the affordability of diabetes care, particularly insulin.
Earlier on Thursday, some major U.S. health insurers, including CVS Health Inc (NYSE: CVS), Elevance Health Inc ELV, and Kaiser Permanente, said they would start reimbursing for Novo Nordisk’s Wegovy, a popular anti-obesity drug, for specific individuals on Medicare who have heart-related conditions.
Published in JAMA Network Open, the study reveals that the manufacturing cost of a month’s supply of Ozempic ranges from 89 cents to $4.73, considerably lower than its market price.
Researchers believe these GLP-1s could be manufactured at significantly reduced costs by factoring in manufacturing expenses and profit margins, potentially expanding access to a wider population.
CNBC noted that Novo Nordisk emphasized its substantial investment in research and development, surpassing $5 billion last year, and ongoing efforts to enhance manufacturing capacity to meet the rising demand for GLP-1s.
The report also added that 75% of its gross earnings go to rebates and discounts to ensure patients have access to its products.
Separate research indicates that Wegovy, a weight loss drug, could be manufactured for $40 a month.
Citing Evercore ISI survey, CNBC noted that more than half of people currently taking a GLP-1 said they are paying a monthly price of $50 or less out of pocket.
Nearly 75% of respondents who used to take one of the drugs said they spent the same amount.
Price Action: NVO shares are up 1.19% at $125.58 on the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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