In a bid to ensure affordability of obesity and diabetes medications, the Senate Committee on Health, Education, Labor, and Pensions has initiated an examination into the pricing strategies employed by Novo Nordisk A/S (NVO). Senator Bernie Sanders has taken the lead in this investigation, emphasizing the imperative to lower prices for both consumers and governments. Communications within Novo Nordisk have been subpoenaed by Senator Sanders, seeking clarity on the reasons behind pricing disparities between the U.S. and other nations.
Why Wegovy, which utilizes the same active ingredient as Ozempic, commands a higher price is a central question raised by the committee. The New York Times reported that a response to this query is anticipated by May 8. Senator Sanders intends to expand his investigation to Eli Lilly And Co (LLY), the manufacturer of competing medications Mounjaro and Zepbound, in order to address industry-wide pricing concerns.
Given the prevalence of obesity among 42% of American adults and diabetes affecting over 11%, ensuring affordability of treatments poses a critical challenge. A recent study conducted by the Kaiser Family Foundation (KFF) revealed that approximately 3.6 million overweight or obese patients with heart conditions covered under Medicare may qualify for Wegovy coverage. The study’s findings suggest that this expanded coverage could have implications for Medicare beneficiaries and coverage offered by other insurers for individuals with heart conditions.
Currently, Medicare Part D prescription drug plans, which are administered by private insurers, do not cover medications approved solely for obesity. However, new guidance indicates that drugs approved for secondary use in conditions covered by Medicare could be eligible. Citing the KFF study, Reuters highlights that this approval could open up Wegovy to over a quarter of the 13.7 million Medicare beneficiaries diagnosed with both heart disease and obesity. Notably, among these eligible patients, approximately 1.9 million also have diabetes, making them already eligible for Medicare coverage of other drugs like Novo’s Ozempic.
Although some Part D plans have announced plans to cover Wegovy this year, broader coverage is anticipated by 2025. The extent of Wegovy’s coverage and its impact on Medicare spending will depend on various factors, including the number of Part D plans that add coverage, any restrictions on its use such as prior authorization requirements, and the negotiated prices paid by plans.
Despite varying levels of coverage offered by major insurance plans, rising costs have led to coverage restrictions and discontinuation, exacerbating accessibility issues. Disparities in coverage between Medicaid and Medicare further compound the problem.
At the time of reporting, NVO shares had declined by 1.91% to $126.18 on Wednesday. It is imperative to note that this content was partially generated with the assistance of AI tools and subsequently reviewed and published by Benzinga editors.
