Novo Nordisk A/S plans to slash the US list prices for its blockbusters Wegovy and Ozempic next year as the drugmaker struggles to claw back a larger share of the obesity market.
The Danish drugmaker set a monthly price of $675 across the board for its semaglutide family of medicines, a cut of as much as 50%. Zepbound, Eli Lilly & Co.'s competing obesity drug, currently has a list price of $1,086.37.
It's not clear yet what the impact of the change will have on Novo's bottom line. In highly competitive categories, drugmakers typically provide heavy discounts off the US list price in exchange for insurance coverage. Drugmakers and middlemen negotiate undisclosed discounts and rebates making the true net cost to a health plan for any drug hard to determine.
On commercial insurance, both Zepbound and Wegovy can cost patients as little as $25 a month.
Though the cuts won't apply to the self-pay prices already available in the US, they may reduce out-of-pocket costs for patients with insurance that requires them to cover a larger portion of their drug costs, said Jamey Millar, Novo's US operations chief.
“I'm confident that payers will accept and welcome these lower list prices, as they've been calling for them publicly,” Millar said. In isolation, the move won't have an impact on net sales, he said.
Shares of Novo were down 2.4% at 4:13 p.m. in Copenhagen. The stock has fallen about 19% since Novo reported another set of disappointing results on its next generation drug CagriSema on Monday. Shares of US rival Lilly dropped as much as 4% in premarket trading in New York on the news of the price cut.
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Novo is pulling levers on pricing to become more competitive in obesity after ceding market leadership to Lilly. Millar, a former executive at UnitedHealth Group Inc.'s pharmacy benefits manager Optum Rx, is an expert on US pricing strategies.
The lower prices go into effect on Jan. 1. Novo needed to announce the cuts now to allow payers time to prepare for the change next year, Millar said. Fees taken by intermediaries like pharmacy benefit managers and drug distributors are often calculated as a percentage of the list price.
The change will have a particular impact on people with high-deductible insurance plans, where patients often have to pay the list price, or a percentage of it, when they fill prescriptions. Patients with co-insurance plan designs where they pay a percentage of the list price should also see an impact, said Millar.
About a third of workers covered by employer-sponsored insurance were enrolled in high-deductible health plans paired with a personal health savings plan option last year, according to KFF's Employer Health Benefits Survey. Less than half the large companies surveyed covered GLP-1 medicines like Wegovy for weight loss, the survey showed.
The list price cut will come at the same time as a discount the US government negotiated last year for patients on Medicare, the federal insurance program for the elderly. The two sets of cuts are not linked, Millar said.
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