The Biden-Harris Administration has proposed expanding Medicare and Medicaid coverage for anti-obesity medications, aiming to address the high costs that have drawn criticism. In the U.S., Novo Nordisk A/S (NYSE: NVO) has faced backlash for the steep prices of Wegovy and Ozempic, two popular drugs in this category.
While Novo Nordisk's CEO Lars Fruergaard Jørgensen has defended the high U.S. prices of the company's blockbuster drugs, Ozempic and Wegovy, stating that these medications are reducing the economic burden of obesity-related health issues.
Recent advancements in anti-obesity medications have demonstrated the potential to prevent Type 2 diabetes and reduce cardiovascular-related mortality by up to 20%.
However, the steep cost of these medications-often as high as $1,000 per month without insurance-places them beyond reach for many Americans.
The proposed rule seeks to make these treatments more accessible, benefiting an estimated 3.4 million Medicare recipients and 4 million Medicaid enrollees. For some, the expanded coverage could cut out-of-pocket expenses by up to 95%.
The Department of Health and Human Services (HHS) highlighted the disparity between U.S. and international drug prices, with Americans paying significantly more for anti-obesity medications.
The proposed expansion aligns with broader efforts to lower drug costs through negotiations and increased competition, aiming to ensure life-saving treatments are affordable and accessible.
According to some analysts, Novo Nordisk's blockbuster diabetes drug Ozempic might be included in the next round of Medicare drug price negotiations.
Most recently, Novo Nordisk said it will officially launch its weight-loss drug Wegovy in China. A four-injection pack costs around $194 (CNY 1,400) compared to around $1,349 per patient per month in the U.S.
In the third quarter, Wegovy sales reached 17.30 billion Danish kroner, up 81%, and Ozempic sales increased 26% at constant currency to 29.80 billion Danish kroner.
"The sales growth is driven by increasing demand for our GLP-1-based diabetes and obesity treatments," Jørgensen said.
As per a report in August, several older Americans are having little success getting prescriptions for Wegovy, covered by Medicare, despite the federal healthcare program's decision to pay for patients with obesity at risk of heart disease.
Price Action: NVO stock is up 1.7% at $106.41 at last check Tuesday.
The stocks of several pharmaceutical companies involved in developing or marketing weight-loss medications showed mixed performance as of Tuesday's publication.
- Eli Lilly and Company (NYSE: LLY) was up 3.9% to $785.49.
- Amgen Inc. (NYSE: AMGN) was down 11.4% to $260.84.
- Pfizer Inc. (NYSE: PFE) was down 1.3% to $25.81.
- Viking Therapeutics Inc. (NASDAQ: VKTX) was up 5.2% to $54.74.