Novo Nordisk (NVO) CEO Lars Jørgensen told lawmakers Tuesday he was willing to sit down with pharmacy benefit managers (PBMs) to discuss a lower price for Wegovy and Ozempic, the company's blockbuster weight-loss and diabetes drugs, respectively, in order to expand access to the drugs.

The drugs, known as GLP-1s, have brought in $50 billion in revenue for Novo Nordisk year to date alone, but the high prices ($1,349 for Wegovy and $968 for Ozempic) have put them out of reach for many Americans, especially for the weight-loss drugs, due to limited coverage by insurers.

For over two hours, Jørgensen faced policymakers led by Sen. Bernie Sanders (I-Vt.) to defend the drugs' prices.

On one hand, Jørgensen contends that research and development costs and the rebates paid to PBMs —$0.74 for every dollar — are key parts of a drug's list price.

Jørgensen also emphasized that, unlike American pharmaceutical companies, the Danish drugmaker is owned by a large nonprofit "rivaling the Gates Foundation," and therefore, its incentive is not to please shareholders.

"I don't think we set our price in a way where we just look at our shareholders," he said.

Jørgensen noted that Novo has already discounted the net price of Ozempic by 40% since launching in 2017.

In response, Sanders and other lawmakers pointed out that European countries and Australia are paying less than $100 per month for the drugs.

"We have a complicated system ... but the point that I want to make is that factoring all of the rebates ... that PBMs receive, the net price of Ozempic is still nearly $600 — over nine times as much as it costs in Germany. And the net price of Wegovy is over $800, nearly 4.5 times as what it costs in Denmark," Sanders said.

Sanders noted that what the company was doing was not illegal, but rather taking advantage of the US healthcare system, which does not negotiate and regulate drug prices like other countries.

Drug companies "can charge us any price that they want, as much as the market will bear," Sanders said.

After initially sidestepping a similar question from Sanders, when pressed by Sen. Mike Braun (R-Ind.), Jørgensen confirmed that the company is still making a profit at the price point in Australia of $87.

Sanders has also said that in discussions with generic manufacturers, he has learned that a generic version can be made for $100. A study published in the Journal of the American Medical Association suggested that GLP-1s could be manufactured for as little as $5.

The pivot to PBMs

While the hearing began with a spotlight on Novo Nordisk, it pivoted to focus on PBMs.

It's an issue the Senate Health, Education, Labor, and Pensions Committee (HELP) has been working on for over a year in hopes of changing the black box system into a transparent, flat-fee one.

Sanders said that he has received commitments from PBMs that if Novo reduces the prices for GLP-1s, they will not penalize the company by removing the drugs from the drug formularies — which the PBMs use to determine which drugs are more favored for patient use.

Yahoo Finance has seen a copy of some of those commitments made by the top three PBMs, CVS Caremark (CVS), UnitedHealth Optum RX (UNH), and Cigna Express Scripts (CI).

"Wegovy, Mounjaro (LLY) and Ozempic alone are driving approximately 93% of the non-specialty upward cost trend we are seeing for Caremark customers. Between skyrocketing demand, supply challenges and price hikes, the costs are overwhelming. Lower list prices would open up access for obesity treatment, in particular," CVS said in its letter to Sanders.

In addition, CVS said that a lower list price would not result in the drugs being given a less favorable formulary placement. It cited the example of reduction in insulin prices in recent years by all major manufacturers, and said that it did not result in less favorable formulary placement.

At the hearing Tuesday, Jørgensen said that the commitment from PBMs was new information to him, but that access to the lower-priced insulins had decreased.

In response to a question from Sen. Tim Kaine (D-Va.), Jørgensen said, "We have not seen wide uptake in insulins where we lowered the price."

Following the hearing, Novo said in a statement that it was willing to continue working with the committee.

"Unfortunately, the reality is that even when we reduce prices, as we have with both Ozempic and Wegovy, patients in the US are left paying a price that does not reflect the reductions," Novo said.

Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee on most social media platforms @AnjKhem.

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