Ozempic, the popular diabetes drug – and similar weight-loss medications – could be manufactured for less than $5 a month, even as Novo Nordisk charges nearly $1 000 per month for the injection in the US before insurance, according to a recent study.
The findings, by researchers at Yale University, King’s College Hospital in London and the non-profit Doctors Without Borders, raises more questions about the hefty price tag of the top-selling diabetes treatment and similar drugs for weight loss, which are all part of a new class of treatments called GLP-1s.
Demand for those medicines has soared over the past year, while more insurers drop them from their plans due to cost, leaving some patients unable to afford the drugs.
CNBC reports that the study also comes after years of political pressure on Novo Nordisk and other pharmaceutical companies to slash high costs of diabetes care, especially insulin.
The study, published in JAMA Network Open, suggests Ozempic can generally be produced for less than various forms of insulin.
Researchers found that a month’s supply of the treatment could be manufactured for an estimated 89 cents to $4.73. They evaluated manufacturing costs for the weekly injection along with a profit margin with an allowance for tax to produce those estimates, which they call “cost-based prices”.
Novo Nordisk’s list price for a monthly package of Ozempic is $935.77 before insurance and other rebates. The findings suggest that GLP-1s “can probably be manufactured for prices far below current prices, enabling wider access”, the researchers concluded.
In a statement last week, Novo Nordisk declined to provide production costs for Ozempic and its weight loss drug counterpart Wegovy. But the Danish drugmaker noted that it spent almost $5bn on research and development last year, and will spend more than $6bn on a recent deal to boost manufacturing to meet demand for GLP-1s.
It also said 75% of its gross earnings go to rebates and discounts to ensure patients have access to its products.
Study details
Estimated Sustainable Cost-Based Prices for Diabetes Medicines
Melissa Barber, Dzintars Gotham, Helen Bygrave, et al.
Published in JAMA Network on 27 March 2024
Abstract
Importance
The burden of diabetes is growing worldwide. The costs associated with diabetes put substantial pressure on patients and health budgets, especially in low- and middle-income countries. The prices of diabetes medicines are a key determinant for access, yet little is known about the association between manufacturing costs and current market prices.
Objectives
To estimate the cost of manufacturing insulins, sodium-glucose cotransporter 2 inhibitors (SGLT2Is), and glucagonlike peptide 1 agonists (GLP1As), derive sustainable cost-based prices (CBPs), and compare these with current market prices.
Design, Setting, and Participants
In this economic evaluation, the cost of manufacturing insulins, SGLT2Is, and GLP1As was modelled. Active pharmaceutical ingredient cost per unit (weighted least-squares regression model using data from a commercial database of trade shipments, data from January 1, 2016, to March 31, 2023) was combined with costs of formulation and other operating expenses, plus a profit margin with an allowance for tax, to estimate CBPs. Cost-based prices were compared with current prices in 13 countries, collected in January 2023 from public databases. Countries were selected to provide representation of different income levels and geographic regions based on the availability of public databases.
Main Outcomes and Measures
Estimated CBPs; lowest current market prices (2023 US dollars).
Results
In this economic evaluation of manufacturing costs, estimated CBPs for treatment with insulin in a reusable pen device could be as low as $96 (human insulin) or $111 (insulin analogues) per year for a basal-bolus regimen, $61 per year using twice-daily injections of mixed human insulin, and $50 (human insulin) or $72 (insulin analogues) per year for a once-daily basal insulin injection (for type 2 diabetes), including the cost of injection devices and needles. Cost-based prices ranged from $1.30 to $3.45 per month for SGLT2Is (except canagliflozin: $25.00-$46.79) and from $0.75 to $72.49 per month for GLP1As. These CBPs were substantially lower than current prices in the 13 countries surveyed.
Conclusions and Relevance
High prices limit access to newer diabetes medicines in many countries. The findings of this study suggest that robust generic and biosimilar competition could reduce prices to more affordable levels and enable expansion of diabetes treatment globally.
JAMA Network article – Estimated Sustainable Cost-Based Prices for Diabetes Medicines (Open access)
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