Breakthrough drug for weight loss irritates the price. A cure worth thousands can be made for five dollars

Novo Nordisk’s management has long refused to disclose its manufacturing costs and says it is spending heavily to ensure public access to the increasingly popular drug. The high investment in the purchase of production equipment from the Catalent company should also be related to this, writes the Bloomberg agency.

However, researchers from Yale University, London’s King’s College Hospital and the non-profit organization Doctors Without Borders concluded in their study that a monthly dose of this medicine could be produced for 4.73 US dollars. The scientists also included the profit margin that would belong to Novo Nordisk in the final calculation.

“This outrageously high amount has the potential to bankrupt the American health care system,” said US Senator Bernie Sanders in response to the new study and called on the management of the pharmaceutical company to reduce the list price of Ozempic to at least 155 US dollars (about 3,600 crowns). and thus to the level it charges in other states.

Cheaper than some insulins

The researchers in the study conclude that the production price of a monthly dose of ozempic is lower than in the case of different forms of insulin that have been available on the market for several decades. “The profit margin is huge. We should talk about what is a fair price,” commented the results of the study, economist Melissa Barberová, who participated in the study.

Novo Nordisk’s sales from the sale of Ozempic and the similar drug Wegovy exceeded 18 billion US dollars in 2023, which is roughly 414 billion crowns. Bloomberg estimates that the company’s patents related to these drugs will expire in June 2023. Meanwhile, Novo Nordisk’s shares have been growing for several months, this year alone it was already 26 percent, and it is currently the most valuable European company.

Pharmaceutical companies across the industry at least cut the prices of some forms of insulin by as much as 75 percent last year after pressure from the Biden administration. However, estimates show that the companies’ profitability from sales of these preparations did not decrease even after the price drop. The companies eliminated the discounts they offered to intermediaries.

The company defends itself with high research costs

Drug manufacturers often try to justify their fat margins by the high cost of research, which sometimes lasts several years. Last year, spending on research and development of new drugs at Novo Nordisk totaled 5 billion US dollars, and this year this sum is expected to be even higher.

In the context of the drug Ozempic, the study found that the biggest manufacturing costs are not associated with the active substance semaglutide, but with disposable pens that are used for injection. The pen is used once a week, its manufacturing cost, according to the study, is a maximum of $2.83 and it lasts for one month.

The production price of a monthly dose of semaglutide is only 0.29 dollars (about 7 crowns). The production of this substance in itself is not cheap, one kilogram costs about 70 thousand dollars (about 1.6 million crowns). At the same time, however, only a small amount of semaglutide is used in each dose.