Pharmaceutical Companies Are Ripping Off Americans

If Novo Nordisk and other pharmaceutical companies refuse to dramatically lower prescription drug prices in our country and end their greed, we will do everything in our power to end it for them.

President Joe Biden and Senator Bernie Sanders
| Opinion Contributors

As President of the United States and Chairman of the Senate Health, Education, Labor, and Pensions Committee, we have long been concerned about the exorbitant prices the pharmaceutical industry charges the American people for prescription drugs.

There is no rational reason why Americans have been forced to pay, for decades, by far the highest prices in the world for the prescription drugs they need.

There is no rational reason why, for decades, 1 in 4 Americans have been unable to afford the medications prescribed by their doctor.

And it is certainly not the patriotic duty of Americans to pay high prices for drugs at home so that others abroad can enjoy the fair prices to which every American is entitled.

This is why, over the past few years, working together, we have made substantial progress.

Because of the Inflation Reduction Act, which passed Congress without a single Republican vote, seniors with diabetes now pay only $35 a month for insulin. Starting in January, no American senior will pay more than $2,000 a year for prescription drugs. And, for the first time in history, Medicare is now doing what every other major country does: negotiating with drug companies to lower the prices of some of the most expensive drugs in the United States.

This common-sense policy is one with which the American public overwhelmingly agrees, including more than 60 percent of Republicans.

By working with some of the world’s largest pharmaceutical companies, we’ve also successfully reduced the cost of inhalers that millions of Americans with asthma and chronic obstructive pulmonary disease need to breathe, from $645 to just $35.

We are very proud of these advances. The U.S. government is finally standing up to big pharma. But there is still much work to be done to reduce the unaffordable price of prescription drugs.

We plan to expand negotiations on drug prices

What does that mean?

This means that at a time when many Americans are struggling with a myriad of chronic conditions, no one in our country should be forced to pay more than $2,000 a year for the prescription drugs they need, not just seniors. It also means increasing the number of prescription drugs that are price negotiated to at least 50 per year. We are working together on legislation that does just that. We hope every member of Congress will support this legislation.

But let’s be clear: It’s not just Congress that needs to act. Pharmaceutical companies need to stop ripping off the American people, too.

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Let’s take an example – a major example. Today, tens of millions of Americans struggle with type 2 diabetes and obesity.

The good news is that Novo Nordisk, one of the world’s largest pharmaceutical companies, has created new blockbuster drugs, Ozempic and Wegovy, that effectively treat these diseases.

Obesity drugs are too expensive

The bad news is that Novo Nordisk is charging Americans unreasonably high prices for these prescription drugs. If your doctor prescribes you a GLP-1, the prices for Ozempic and Wegovy can be up to six times higher than those in Canada, Germany, Denmark, and other major countries. This is unacceptable.

And it’s not just Novo Nordisk that’s affected. Eli Lilly also charges excessively high prices for Mounjaro, a drug with similar health effects to Ozempic. That price is about $1,100 per month.

Why should people in Burlington, Vermont pay much more than people in Copenhagen or Berlin for the same drug? The fact is that people in Paris, Texas should not pay much higher prices for Ozempic and Wegovy than people in Paris, France.

These inequalities are even more stark when we look at the profit margins of these companies. For example, last March, a study by researchers at Yale University found that these drugs could be made profitably for less than $5 a month, or $57 a year.

Novo Nordisk scientists deserve credit for developing Ozempic and Wegovy. These drugs have the potential to be game-changers for people around the world who are struggling with type 2 diabetes and obesity. But as important as they are, these drugs will be of no use to the millions of patients who cannot afford them.

Moreover, if the prices of these drugs are not substantially reduced, they risk bankrupting the American health care system.

We will not allow this to happen.

If half of obese adults took Wegovy and the other new weight-loss drugs, it could cost $411 billion a year, or $5 billion more than Americans spent on all prescription drugs over the counter in 2022.

If half of obese Medicare and Medicaid beneficiaries took Wegovy and other weight-loss drugs, Medicare and Medicaid could spend $166 billion a year, equivalent to what the two federal health programs spent on all retail prescription drugs in 2022.

It is not morally responsible or financially responsible.

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Americans struggle as pharmaceutical companies make colossal profits

Let’s be clear. Year after year, while many Americans struggle to afford the medications they need, the pharmaceutical industry is making huge profits. In fact, the ten largest pharmaceutical companies made more than $110 billion in profits last year.

In 2023, for example, Novo Nordisk made more than $12 billion in profits, in part by charging Americans more than $1,000 a month for a prescription drug that can be profitably manufactured for less than $5. That’s not a reasonable return on investment. That’s price gouging. That’s corporate greed.

Today, pharmaceutical companies claim that Americans can pay less for their drugs because they rely on opaque discount mechanisms managed by middlemen. But these opaque tactics prevent payers from understanding the true cost of drugs, weakening their negotiating position.

Drug companies also argue that even if actual prices are exorbitant, lowering them would stifle innovation and make it less likely that innovative drugs like Ozempic will be developed in the future. But reaping the rewards of innovation is not fundamentally at odds with fair prices for consumers or helping the masses.

If Novo Nordisk and other pharmaceutical companies refuse to significantly lower prescription drug prices in our country and put an end to their greed, we will do everything in our power to put an end to it for them. Novo Nordisk must significantly reduce the price of Ozempic and Wegovy.

As Americans, we must not rest on our laurels until every person in our country can afford the prescription drugs they need to live healthy, happy, and productive lives.

Let’s move forward together.

Joe Biden is the 46th President of the United States. Independent Senator Bernie Sanders of Vermont chairs the Senate Health, Education, Labor, and Pensions Committee.