While Congress debates the high cost of brand-name diabetes and weight loss drugs, Atlanta doctors are selling lower-cost alternatives made by compounding pharmacies.
During a Senate committee hearing on Tuesday, Sen. Bernie Sanders, I-Vt., grilled the CEO of Novo Nordisk, the maker of the popular drugs Wegovy and Ozempic, insisting that their prices were exorbitant compared to what people in Europe pay for the drugs.
There now are multiple drugs on the market that are approved by the U.S. Food and Drug Administration for diabetes treatment and weight loss. Among them are Wegovy and Ozempic. Wegovy, which is approved for weight loss, contains the same main ingredient — semaglutide — as Ozempic, which is approved to treat diabetes.
Known as GLP-1 drugs, they are typically taken as weekly self-injections and are effective for blood glucose control and weight loss. The drugs slow down digestion, curb hunger and help manage blood sugar levels. They can also result in people losing as much as 20% or more of their body weight.
Because Wegovy and Ozempic are in short supply, compounding pharmacies in the U.S. have permission to produce the drugs in order to ease shortages. But the FDA said it has received adverse event reports after patients used compounded semaglutide. And Novo Nordisk has taken legal action against spas and weight loss clinics around the U.S. over product purity concerns.
According to Sanders, Novo Nordisk charges Americans with Type 2 diabetes $969 a month for Ozempic, while this same exact drug can be purchased much cheaper in several European Union countries — $59 in Germany, $71 in France and $122 in Denmark. Sanders also mentioned the drug costs $155 in Canada, which is in North America and not in the EU.
That drug prices between EU countries and the U.S. vary isn’t news, but the disparity might be explained by differences in the way health care systems in Europe negotiate discounts with drugmakers, said Martin Schonger, an economist at the Lucerne School of Business in Lucerne, Switzerland.
Medicare — one of the largest health care insurance systems in the world — only gained permission to negotiate prices with drug companies as part of the Inflation Reduction Act in 2022. Weight loss drugs were not included in the first 10 drugs that Medicare’s governing body negotiated with manufacturers, but that looks likely to change in the coming months.
Drugmakers often try to recoup their investments via higher prices in the U.S. because the U.S. is richer per capita than Europe, Schonger said.
The U.S. per capita income was $81,695 in 2023, according to the World Bank. It was $52,745 in Germany, $44,460 in France and $38,373 in Italy, the EU’s three most populous countries.
U.S. consumers subsidize new drug development for the rest of the world because the U.S. accounts for 45% of global pharmaceutical sales, he said.
“The development of a new drug costs billions of dollars, and most drugs that are developed never see the light of the day,” Schonger said. “So if a company develops five drugs at a cost of $10 billion per drug and four fail, they still have to find a way to come up with $50 billion.”
Moreover, Novo Nordisk said demand for its name brand drugs has outstripped supply. Just as in the U.S., Schonger said some pharmacies in Europe continue to experience shortages of the drugs.
Though the weight loss drugs are pricey, they might still save the U.S. money compared to the cost of treating obese Americans for diabetes, heart disease and other obesity-related illnesses. A Yale University study cited by Sanders estimated that 43,000 lives a year could be saved if Wegovy were made widely available at an affordable price to Americans who need the drug.
But the drugs have side effects, and doctors have told The Atlanta Journal-Constitution it might not be practical to put 30% of Americans on the drugs indefinitely.
Atlantans find a supply in compounding pharmacies
Several Atlanta doctors are working with compounding pharmacies to create injectable forms of semaglutide, the active ingredient in Wegovy and Ozempic.
Though semaglutide was invented by Novo Nordisk scientists and is covered by patent protections until 2026, the FDA allows compounding pharmacies to produce on-patent drugs in certain circumstances when a drug is in short supply.
And the oversight body monitors compounding pharmacies to protect patients from unsafe, ineffective and poor-quality drugs while also preserving access to lawfully marketed compounded products, according to the FDA’s website.
Dr. Alex Roig offers patients in metro Atlanta semaglutide injectables made by a compounding pharmacy at a cost of $274 per month with a three-month commitment.
He said the treatments are highly effective, but the goal is to wean patients off the weight loss injectables after they have developed healthier eating and exercise habits.
It’s a sentiment shared by TeAnna Williams, a practice manager on Howell Mill Road, where a three-month supply of semaglutide costs $900 compared to $650 for a 28-day supply of Wegovy without insurance.
“We’ve seen some tremendous results,” Williams said. “Though we have, of course, had people come back in after gaining the weight back.”
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