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"Why? Excessive corporate greed," said Sen. Bernie Sanders.
U.S. Sen. Bernie Sanders called out the pharmaceutical giant Novo Nordisk on Tuesday for charging American patients more than $900 a month for the increasingly popular diabetes drug Ozempic, even though generic manufacturers are willing to sell the medication for significantly less.
During a panel discussion with experts, Sanders (I-Vt.) said he and his staff have been in contact with the top executives of major drug makers who say they could sell a generic version of Ozempic for less than $100 a month—and still turn a profit. A recent study found that the drug can be manufactured for less than $5 a month.
"Novo Nordisk, which has made nearly $50 billion in sales off of Ozempic and Wegovy, charges Americans almost $1,000 a month—the highest prices in the world," Sanders, the chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, said Tuesday. "Why? Excessive corporate greed."
Ozempic and Wegovy are part of a class of treatments known as GLP-1s. Wegovy, a weight-loss drug that Novo Nordisk sells for $1,349 a month in the U.S., contains the same active ingredient as Ozempic, which is approved only for people with Type 2 diabetes.
The drugs' growing popularity in the U.S. has drawn greater scrutiny to Novo Nordisk's pricing. Sanders' office noted Tuesday that the company's price tag for Wegovy is $186 in Denmark, $140 in Germany, and $92 in the United Kingdom.
Novo Nordisk's high prices for the drugs in the U.S. could have far-reaching impacts on the nation's healthcare system. A group of economists wrote in a recent op-ed for The New York Times earlier this year that "under reasonable assumptions and at current prices, making this class of drugs available to all obese Americans could eventually cost over $1 trillion per year," which is "almost as much as the government spends on the entire Medicare program and almost one-fifth of the entire amount America spends on healthcare."
Sanders warned Tuesday that if the prices of Ozempic and Wegovy aren't reined in, Medicare premiums could surge.
"Our healthcare system, I think most people understand, is in crisis," Sanders said during the panel discussion. "The business model of the pharmaceutical industry is unsustainable."
Over the course of our investigation into the outrageous cost of Ozempic and Wegovy in the U.S., I spoke with the CEOs of major generic pharmaceutical companies who confirmed:
They can sell a generic version of Ozempic for $100/mo. https://t.co/XDHdBRPIcM
— Bernie Sanders (@SenSanders) September 17, 2024
Peter Maybarduk, director of the Access to Medicines Program at Public Citizen, said in a statement Tuesday that "all we need to make Ozempic for $100 a reality is to overcome Novo's patent monopoly, which the government has the power to do any time."
"States and clinicians are asking the feds for help," said Maybarduk. "We estimate taking action on Novo's patents could save Medicare more than $14 billion in the first two years of competition, while making diabetes and obesity drugs affordable."
Last month, Public Citizen delivered a petition to U.S. Health and Human Services Secretary Xavier Becerra urging him to use existing law to "authorize generic competitors to Ozempic and Wegovy."
"Novo Nordisk’s outrageous pricing of [Ozempic and Wegovy] threatens to break the coffers of federal health programs," the group wrote. "Pursuant to 28 U.S.C. § 1498, the administration should authorize use of any and all patents necessary to allow manufacturers to produce generic alternatives to these treatments on behalf of the United States government, which can be used to supply Medicare, Medicaid, and other federal health programs. This will facilitate competition and make the treatments more affordable and accessible for patients."
The CEO of Novo Nordisk, which has spent aggressively on lobbying this year, is scheduled to testify before the Senate HELP Committee next week.
"We must question why Bavarian Nordic refuses to adjust its unconscionable approach to pricing and access," wrote the director of Public Citizen's Access to Medicines program.
A U.S.-based watchdog group on Friday called out what it described as the "profiteering approach" taken by one of the only companies in the world with an approved vaccine for mpox, an infectious disease whose rapid spread in the Democratic Republic of Congo prompted the World Health Organization to declare a global emergency earlier this month.
Peter Maybarduk, the director of Public Citizen's Access to Medicines program, wrote a letter to the Danish pharmaceutical giant Bavarian Nordic expressing deep concern that the company "may be exploiting the latest global health crisis, putting profits over people."
A spokesperson for Bavarian Nordic, the maker of the mpox vaccine Jynneos, told STAT in a recent interview that the firm doesn't "tend to talk about price," a lack of transparency that set off alarm bells amid a pressing international crisis. Mpox has spread to the DRC's neighboring countries, and Thailand and Sweden each recently reported a case.
Maybarduk elaborated on his concerns:
In 2022, the Pan American Health Organization (PAHO) resolved to procure mpox vaccines despite Bavarian Nordic’s refusal to provide a single low price for all PAHO Member States. Consequently, the vaccine costs much more than any of the other vaccines available through the Revolving Fund, PAHO's bulk vaccine purchaser. In negotiations with manufacturers, the Revolving Fund usually seeks to obtain a supplier's lowest available price to ensure that all PAHO Member States can access affordable vaccines, regardless of size or level of development.
Given Bavarian Nordic's troubling approach to pricing with PAHO then, we remain concerned about pricing implications now for group procurement by Africa CDC and multilateral purchasers such as Gavi, as well as wider ramifications for the global public health response.
"While many actors have roles to play in ensuring a coordinated international effort to contain the spread of mpox, including how best to make use of vaccines," Maybarduk added, "we must question why Bavarian Nordic refuses to adjust its unconscionable approach to pricing and access."
The WHO's emergency declaration and the lack of vaccine access in the countries most affected by mpox has sparked concerns of a repeat of the vaccine apartheid that undermined the global response to Covid-19, with deadly consequences.
Lawrence Gostin, Sam Halabi, and Alexandra Finch, experts at the O'Neill Institute for National and Global Health Law at Georgetown University, wrote in a New York Times op-ed earlier this week that "we shouldn't discount the pandemic potential of mpox."
"Africa CDC has estimated that it needs 10 million doses to stop the current outbreak. But as was the case with the Covid vaccines, mpox vaccines are in the hands of the world's richest countries and companies," the experts wrote. "An agreement between Africa CDC, the European Union, and Bavarian Nordic has already been reached for the procurement and rapid distribution of about 200,000 doses, but many more are needed. The United States has said it will donate 50,000 doses to Congo from its stockpile. But this still leaves Africa nowhere near the 10 million doses needed."
"Bavarian Nordic says that by the end of this year it could manufacture two million more doses, and then eight million doses next year, if purchase orders are made," they added. "But there is no clear commitment to make these doses affordable for African countries."
For-profit hospitals jacking up prices matches a similar story of predatory corporate practices on grocery costs and housing prices. It's not market supply and demand. Corporate giants have figured out how to rip people off more effectively.
Vice President Kamala Harris’ bold proposal to eliminate medical debt offers a window into the approach that informs the entire progressive economic agenda the Democratic nominee for President unveiled August 16.
In addition to the proposals for re-instating and expanding the child tax credit with a baby bonus for new parents, federal support for affordable housing construction and a subsidy down payment for first time home buyers, much of the new focus and attacks have centered on what the Washington Post labeled the “first ever” ban on price gouging for groceries and food.
What makes that idea especially noteworthy is its correlation to the medical debt plan and caps on prescription drug costs and rent increases. A central cause of those inflated costs goes well beyond the usual claims of supply chain bottlenecks, government spending on social programs, and the disruption of the pandemic. In every case, there is a direct link to monopolization and big corporations exploiting those factors to jack up charges to extract higher, often record, profits, well beyond their own costs to produce or provide them.
Unpacking the crisis and main source of medical debt as well as for health care costs overall, including for prescription drugs, provides the tell.
For over two decades California Nurses Association/National Nurses United researchers have studied how hospitals inflate charges over their costs. Overall, the conclusion has been that hospital profit taking, augmented by corporate mergers, is a clear driver of medical debt.
A 2020 NNU study found that some hospitals had hiked their charges by as much as 18 times over their costs, exploding profits by 411 percent over the prior two decades. NNU’s forthcoming update on hospital charges will show that some hospitals by 2022/2023 were now setting charges at almost 24 times over their costs, doubling their charges over the past 20 years. Further, the biggest for-profit hospital chains set the highest prices and make the most profits from them. Among the 100 top hospitals with the highest charges, hospital giant HCA had six hospitals alone with a combined profit of almost $400 million for that fiscal year.
Big Pharma is the gold medal winner in profiteering which is why drug costs have become such a national scandal. The U.S. Senate Health, Education, Labor, and Pensions (HELP) Committee, chaired by Sen. Bernie Sanders, issued a Majority Staff Report in February documenting how three of the biggest pharmaceutical giants, Johnson & Johnson (J&J), Merck, and Bristol Myers Squibb (BMS), have prioritized profits over patient need, collectively piling up $112 billion in profits in 2022 through “unethical pricing strategies, relentless price hikes, manipulative patent tactics, and extensive lobbying efforts.”
That lobbying blocked years of efforts to allow Medicare to use its bulk purchasing power to negotiate lower drug prices, as most other industrial countries have achieved. It’s why President Biden’s Inflation Reduction Act to permit Medicare to bargain lower prices for 10 of the highest cost drugs that treat heart disease, cancer, diabetes, and blood clots was such a dramatic success. The White House this week announced it will save millions of Medicare recipients $1.5 billion in the first year of the program.
There’s a similar story of predatory corporate practices on grocery and housing prices. No they’re not just set by market supply and demand. “Is Harris right on the economics?” asked political economist Robert Kuttner on Friday in response to the announcement of Harris' plan.
"A detailed study by Groundwork Collaborative found that corporate concentration and increased profits accounted for more than half of the inflation felt by consumers in 2022 and 2023," Kuttner wrote. "First, it vividly connects with the issue of inflation where ordinary people feel it… Second, the plan reframes the issue … to how corporate concentration opportunistically drives price hikes…Third, the approach recasts the struggle as ordinary people vs. predatory corporations.”
“Today, everywhere consumers turn, whether they are shopping for groceries at the local Kroger or for plane tickets online, they are being gouged,” wrote David Dayan and Lindsay Owens in the lead to a major American Prospect series in June. “Landlords are quietly utilizing new software to band together and raise rents.”
In the “40 years from 1979 to 2019, nonfinancial corporate profits cumulatively drove about 11.4 percent of price growth. From April to September of last year,” Dayan and Owens continued, “that number was 53 percent.” Factors include corporate concentration, high-tech pricing practices, utilizing “technological innovations such as cloud computing, artificial intelligence, and surveillance targeting” of consumers to collect extensive personal information.
Jarod Facundo described a panoply of corporate grocery pricing practices including dominance of shelf space by the biggest chains, surge pricing, repackaging goods without changing prices, and tech driven personalizing pricing “for each shopping cart” that have been “the path to higher margins,” increased costs, and, of course, bigger profits.
Food company profit increases since inflation peaked, notes former labor secretary Robert Reich, include Cal-Maine, the largest U.S. producer and distributor of fresh shell eggs, whose profits soared 471 percent. Monopolization has also driven food inflation, Reich says: Just four companies control 85 percent of beef processing, 80 percent of corn seed distribution, 77 percent of fertilizer production, and 69 percent of grocery sales.
In an investigative report in October, 2022, ProPublica’s Heather Vogell described how Texas-based RealPage’s software facilitated price inflation on rental units. “Property managers across the United States have gushed about how the company’s algorithm boosts profits,” she wrote. “The nation’s largest property management company, Greystar, used the software to price tens of thousands of apartments.”
In the American Prospect, Luke Goldstein also zeroed in on the effect of RealPage’s practices to “maximize profits” in rental markets. “Clients accept the RealPage recommendations over 80 percent of the time, and the company includes provisions in its contracts to ensure rent hikes. It heavily pushes adoption to new clients of an ‘auto-accept’ feature that forces price increases automatically.”
Corporate price gouging has not gone unnoticed by the Biden administration, as Dayen and Owens note, citing the work of its agencies to aggressively target algorithmic price-fixing, corporate mergers and other practices, such as junk fees and corporate care interest rates that spark inflation.
Harris has been a voice on those initiatives as well, which have contributed to her economic proposals today. The proposals will face considerable assault from corporate lobbyists and the politicians they influence, of course, which will require a lot of political organizing to support.
Among those praising her initiative was Sen. Sanders, as staff writer Jake Johnson reported Friday for Common Dreams. Sanders called the Harris plan “an important step forward in making our country a fairer and more just society. I look forward to working with Vice President Harris when she becomes president to implement her economic agenda, and more, within her first 100 days in office."