Ozempic and Wegovy don't cost what you think they do
Drug companies are making billions from a new class of in-demand weight loss treatments. But the prices are not what they seem.
The problem is big: powerful but expensive new drugs could help many of the world's 100 million adults Americans suffering from obesity and alleviate a serious situation. public health problem.
But how can the country afford lifelong treatments for so many people, with prices per patient ranging from around $900 to $1,300 every four weeks?
Some researchers, such as Dr. Walter C. Willett, professor of epidemiology and nutrition at the Harvard T.H. Chan School of Public Health, warned that the drugs could add 50 percent to the country's health care costs.
“You can see this explosion completely out of control,” he said. declared. said.
But there is one factor often left out of these discussions: List prices for drugs are usually very different from the net prices that companies receive after concluded secret agreements. from health insurance companies or intermediaries called pharmaceutical benefit managers. Companies generally do not reveal net prices, but there are data sources that can be used to estimate them.
A recent article published by the American Enterprise Institute found that net prices for new obesity drugs are only a fraction of published annual list prices.
And even if drug prices remain out of worn for many, economists predict they will soon be brought down. More than a dozen companies are developing anti-obesity drugs. As they enter the market, greater selection is expected to drive prices down, as has happened with other expensive drugs.
“Ma 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.
High demand, falling prices?For now, manufacturers are reaping the rewards of growing demand.
Investors expect Novo Nordisk, the maker of Wegovy, to achieve a turnover of 4 billion dollars this year. The company's other drug, Ozempic, is expected to bring in $11 billion. Drugs generate such a windfall that they account for almost all of the latest economic growth in Denmark, home of Novo Nordisk.
These revenues are based on net prices . .
For their analysis, Benedic N. Ippolito, economist at the American Enterprise Institute, and Joseph F. Levy, health economist at the Johns Hopkins Bloomberg School of Public Health, relied on data from SSR Health, which uses company financial reports and estimates of the number of prescriptions filled.
Economists calculated net prices using SSR Health data for the second quarter of 2022 to the first quarter of 2023. The exception is Mounjaro, made by Eli Lilly, for which only data from the first quarter of 2023 was available.
Net p...
Drug companies are making billions from a new class of in-demand weight loss treatments. But the prices are not what they seem.
The problem is big: powerful but expensive new drugs could help many of the world's 100 million adults Americans suffering from obesity and alleviate a serious situation. public health problem.
But how can the country afford lifelong treatments for so many people, with prices per patient ranging from around $900 to $1,300 every four weeks?
Some researchers, such as Dr. Walter C. Willett, professor of epidemiology and nutrition at the Harvard T.H. Chan School of Public Health, warned that the drugs could add 50 percent to the country's health care costs.
“You can see this explosion completely out of control,” he said. declared. said.
But there is one factor often left out of these discussions: List prices for drugs are usually very different from the net prices that companies receive after concluded secret agreements. from health insurance companies or intermediaries called pharmaceutical benefit managers. Companies generally do not reveal net prices, but there are data sources that can be used to estimate them.
A recent article published by the American Enterprise Institute found that net prices for new obesity drugs are only a fraction of published annual list prices.
And even if drug prices remain out of worn for many, economists predict they will soon be brought down. More than a dozen companies are developing anti-obesity drugs. As they enter the market, greater selection is expected to drive prices down, as has happened with other expensive drugs.
“Ma 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.
High demand, falling prices?For now, manufacturers are reaping the rewards of growing demand.
Investors expect Novo Nordisk, the maker of Wegovy, to achieve a turnover of 4 billion dollars this year. The company's other drug, Ozempic, is expected to bring in $11 billion. Drugs generate such a windfall that they account for almost all of the latest economic growth in Denmark, home of Novo Nordisk.
These revenues are based on net prices . .
For their analysis, Benedic N. Ippolito, economist at the American Enterprise Institute, and Joseph F. Levy, health economist at the Johns Hopkins Bloomberg School of Public Health, relied on data from SSR Health, which uses company financial reports and estimates of the number of prescriptions filled.
Economists calculated net prices using SSR Health data for the second quarter of 2022 to the first quarter of 2023. The exception is Mounjaro, made by Eli Lilly, for which only data from the first quarter of 2023 was available.
Net p...
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