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Diabetes-turned-obesity drug Ozempic could possibly be offered for $5 a pen and nonetheless make Novo Nordisk a revenue, says a new study that merely did a value evaluation for making the favored drugs.
Alongside Wegovy, its more-potent sister medicine (additionally made by Novo), Ozempic has change into a coveted weight-loss medicine touted by everyone from Elon Musk to Tracy Morgan, serving to rework Novo Nordisk into a pharmaceutical behemoth within the course of. (It just lately overtook LVMH—the luxurious items model owned by the world’s richest individual, Bernard Arnault—as Europe’s most useful publicly listed firm.) The pair of medication are having fun with such a prescription heyday that their gross sales accounted for a majority of the financial development in Denmark, Novo’s house base, for 2022.
However Wednesday’s examine, which was printed within the journal JAMA Community Open by a group of researchers from Yale College, King’s Faculty Hospital in London, and Docs With out Borders, estimated that the price to supply a one-month provide of Ozempic runs between 89 cents and $4.73. That estimate contains “a revenue margin with an allowance for tax,” the authors wrote. One Ozempic pen, which lasts most customers a month, carries a present U.S. record worth of $968.52.
Their math isn’t actually being debated: They merely added collectively the price of the substances, the packaging, then the logistics to distribute the drug. Their conclusion was that Ozempic might retail for as little as 89 cents a month, but nonetheless clear a revenue. In actual fact, a one-month provide of the lively ingredient—semaglutide, a so-called glucagon-like peptide-1 receptor agonist—seemingly prices Novo round 29 cents. The researchers estimated that different chemical substances add one other 15 cents price of provide prices, and the opposite manufacturing for the pen are one other 20 cents.
Novo hasn’t confirmed its math but to the media however has declined up to now to launch manufacturing prices for Ozempic and Wegovy, which prices much more: about $1,300 a month. In an announcement, the corporate argued it’s working to make sure everybody can entry these medication, noting that 75% of gross earnings return into rebates and different reductions to assist sufferers afford merchandise.
There are additionally stories, resembling this one last year by the American Enterprise Institute (AEI), that query if the excessive costs are totally what they appear, no less than concerning the quantity Novo can take to the financial institution. Retail record costs, or what you’d pay out of pocket to purchase the drug your self, usually exceed medication’ “internet costs”—the form of negotiated compromise that drugmakers cost insurers and pharmacy profit managers, which isn’t publicly revealed. The AEI report mentioned the web worth for a month-to-month dose of Ozempic seems to be round $300, and for Wegovy it’s round $700. Each are about $650 under the record worth.
It has been a bonanza, regardless, for Novo, which apparently didn’t have Ozempic’s breakthrough success on its bingo card, both. “Had we predicted this, we might have ready in another way,” CEO Lars Fruergaard Jørgensen told Fast Company in December. Each medication have seen shortages within the U.S., and it’s estimated that just about 2% of American adults who noticed a physician up to now yr have been, extremely, prescribed certainly one of these two drugs. Their recognition translated into greater than $10 billion in gross sales within the third quarter of 2023, accounting for greater than half of Novo’s income.
It’s hardly uncommon for pharmaceutical firms to slap eyebrow-raising costs onto medication, usually citing the billions required to deliver them to market once they do. However a listing worth that’s 200 to 1,000 instances increased than the manufacturing value is much less frequent. When a big chunk of America appeared outraged at “pharma bro” Martin Shkreli for jacking up the record worth of antiparasitic medicine Daraprim, that was for a 40-fold increase, from $13.50 to $750 per capsule.
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