    [Senate Hearing 118-473]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 118-473

                          WHY IS NOVO NORDISK CHARGING
                          AMERICANS WITH DIABETES AND
                           OBESITY OUTRAGEOUSLY HIGH
                         PRICES FOR OZEMPIC AND WEGOVY?

    =======================================================================

                                    HEARING

                                     OF THE

                        COMMITTEE ON HEALTH, EDUCATION,
                              LABOR, AND PENSIONS

                              UNITED STATES SENATE

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 SECOND SESSION

                                       ON

        EXAMINING NOVO NORDISK'S HIGH PRICES FOR OZEMPIC AND WEGOVY FOR
                       PATIENTS WITH DIABETES AND OBESITY

                                   __________

                               SEPTEMBER 24, 2024

                                   __________

     Printed for the use of the Committee on Health, Education, Labor, and
                                    Pensions

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

            Available via the World Wide Web: http://www.govinfo.gov

                                   __________

                       U.S. GOVERNMENT PUBLISHING OFFICE
    57-255 PDF                  WASHINGTON : 2025

    -----------------------------------------------------------------------------------

                     BERNIE SANDERS (I), Vermont, Chairman

    PATTY MURRAY, Washington             BILL CASSIDY, M.D., Louisiana,
    ROBERT P. CASEY, JR., Pennsylvania       Ranking Member
    TAMMY BALDWIN, Wisconsin             RAND PAUL, Kentucky
    CHRISTOPHER S. MURPHY, Connecticut   SUSAN M. COLLINS, Maine
    TIM KAINE, Virginia                  LISA MURKOWSKI, Alaska
    MAGGIE HASSAN, New Hampshire         MIKE BRAUN, Indiana
    TINA SMITH, Minnesota                ROGER MARSHALL, M.D., Kansas
    BEN RAY LUJAN, New Mexico            MITT ROMNEY, Utah
    JOHN HICKENLOOPER, Colorado          TOMMY TUBERVILLE, Alabama
    ED MARKEY, Massachusetts             MARKWAYNE MULLIN, Oklahoma
                                         TED BUDD, North Carolina

                    Warren Gunnels, Majority Staff Director
                  Bill Dauster, Majority Deputy Staff Director
                    Amanda Lincoln, Minority Staff Director
               Danielle Janowski, Minority Deputy Staff Director

                               C O N T E N T S

                                  ----------

                                   STATEMENTS

                          TUESDAY, SEPTEMBER 24, 2024

                                                                       Page

                               Committee Members

    Sanders, Hon. Bernie, Chairman, Committee on Health, Education,
      Labor, and Pensions, Opening statement.........................     1
    Cassidy, Hon. Bill, Ranking Member, U.S. Senator from the State
      of Louisiana, Opening statement................................     6

                                   Witnesses

    Jørgensen, Lars Fruergaard, President and Chief Executive
      Officer, Novo Nordisk, Bagsværd, Denmark..................     8
        Prepared statement...........................................    11

                              ADDITIONAL MATERIAL

    Statements, articles, publications, letters, etc.
    Sanders, Hon. Bernie:
        CVS Health, Melissa Schulman.................................    62
        Blue Cross Blue Shield Michigan, Daniel J. Loepp.............    64
        United Health Group, Andrew Witty............................    65
        Cigna Group, Kristin Julason Damato..........................    67
        North Carolina State Health Plan, Dale R. Folwell............    69
        JAMA Network, Estimated Sustainable Cost-Based Prices for
          Diabetes Medicines.........................................    74
        Doctors for America, Undersigned by 253 Physicians & Health
          Professionals..............................................    87
        Estimating the Lives That Could be Saved by Expanded Access
          to Weight-Loss Drugs, Dr. Alison Galvani, Yale School of
          Public Health..............................................   116
        GLP-1 Patient Stories........................................   167
    Budd, Hon. Ted:
        Letter to Senator Budd from the Speaker North Carolina House
          of Representatives, Tim Moore..............................   132
    Cassidy, Hon. Bill:
        FTC Sues Pharmacy Insurance Managers, Alleging Unfair Drug
          Prices, Daniel Gilbert.....................................   165

                          WHY IS NOVO NORDISK CHARGING
                          AMERICANS WITH DIABETES AND
                           OBESITY OUTRAGEOUSLY HIGH
                         PRICES FOR OZEMPIC AND WEGOVY?

                                  ----------

                          Tuesday, September 24, 2024

                                           U.S. Senate,
           Committee on Health, Education, Labor, and Pensions,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:04 a.m., in
    room 562, Dirksen Senate Office Building, Hon. Bernard Sanders,
    Chairman of the Committee, presiding.

        Present: Senators Sanders [presiding], Casey, Baldwin,
    Kaine, Hassan, Smith, Lujan, Hickenlooper, Markey, Cassidy,
    Collins, Braun, Marshall, Romney, Tuberville, and Budd.

                      OPENING STATEMENT OF SENATOR SANDERS

        The Chair. The Health, Education, Labor, and Pensions will
    come to order. And I want to begin by thanking Mr. Lars
    Jørgensen, the CEO of Nova Nordisk, for being with us
    today for this important hearing.

        The issue that we are discussing this morning is not
    complicated. It has everything to do with the chart behind me,
    which shows that Novo Nordisk's diabetes drug Ozempic is sold
    in Canada for $155, in Denmark for $122, in France for $71, and
    in Germany for $59. In the United States, Nova Nordisk charges
    us $969, over 15 times more than they sell that product in
    Germany.

        Wegovy, Nova Nordisk weight loss drug is even more
    expensive, as the chart behind me also shows. Wegovy is sold
    for $265 in Canada, $186 in Denmark, $137 in Germany, and $92
    in the United Kingdom. In the U.S., the list price for Wegovy
    is $1,349 a month, nearly 15 times as much as it cost in the
    United Kingdom.

        What we are dealing with today is not just an issue of
    economics, it is not just an issue of corporate greed. It is a
    profound moral issue. Novo Nordisk has developed game changing
    drugs, which if made affordable, can save the lives of tens of
    thousands of Americans every year, and significantly improve
    the quality of life of millions more if made affordable. If not
    made affordable, Americans throughout this country will
    needlessly die and suffer.

        As representatives of the American people, we cannot allow
    that to happen. And let's be clear, the outrageously high cost
    of Ozempic, Wegovy, and other prescription drugs is directly
    related to the broken, dysfunctional, and cruel healthcare
    system in our Country. While the current system makes huge
    profits for large drug companies like Novo Nordisk, huge
    profits for insurance companies, and huge profits for PBMs. It
    is failing the needs of ordinary Americans.

        The United States today, we spend almost twice as much per
    capita on healthcare than the people of any other country,
    nearly $13,500 for every man, woman, and child over 17 percent
    of our GDP. Yet, despite this huge and unsustainable
    expenditure, we are the only major country on earth not to
    guarantee healthcare to all people as a human right.

        Further, despite all of that spending, our healthcare
    outcomes are not particularly good. Today, over 85 million
    Americans are uninsured or underinsured. Over 60,000 die each
    year because they don't get to a doctor when they should, and
    our life expectancy, which is actually declining in many parts
    of the country, is far below most other wealthy countries. So,
    what does all of this have to do with Mr. Jørgensen, Novo
    Nordisk, and our hearing today? A lot.

        The simple truth is that we pay by far the highest prices
    in the world for prescription drugs, and that is a major factor
    in the healthcare crisis we experience. How does that happen?
    What's the connection? First, one out of four Americans are
    unable to afford the prescription drugs that their doctors
    prescribe. Insanely, that means that millions of Americans go
    without the treatment that their doctors recommend. The result,
    some will actually die, and others will become much sicker than
    they should, and millions will unnecessarily end up in
    emergency rooms or hospitals at great expense to our healthcare
    system. How crazy is that?

        Second, one of the reasons that hospital costs--it's not
    just prescription drugs--hospital costs in this country are
    rapidly rising, has to do with the very high cost of
    prescription drugs. In my hospital in Burlington, Vermont, the
    CEO there tells me that 20 percent of his budget goes to the
    high cost of prescription drugs, and there are treatments now
    that cost hundreds of thousands of dollars a year.

        Third, a significant reason for the high cost of insurance
    policies. If you're upset out there that you're paying very
    high amounts of money for your insurance, it has to do to a
    significant degree with the high cost of prescription drugs.
    Yes, millions of Americans with decent health insurance pay
    minimal amounts for their prescription drugs. That's the good
    news. The bad news is that they're paying a fortune in
    premiums, deductibles, and copayments for the insurance that
    covers those drugs. I should also add that if you're a taxpayer
    in this country, you're paying higher taxes than you should
    because of the inflated cost that Medicare, Medicaid and other
    public health programs pay for prescription drugs.

        Now, that is the overview and why the issue that we are
    discussing today is so important. It impacts every aspect of
    our healthcare system, the Federal budget, private insurance.
    Now, let's get to the particulars with regard to Novo Nordisk,
    Ozempic, and Wegovy.

        Ozempic and Wegovy are different brand names for the same
    drug, Semaglutide. These drugs are transformative new
    treatments for diabetes and obesity that help people control
    their blood sugar and lose weight. Both are manufactured by
    Novo Nordisk, and both are on track to be some of the
    bestselling and most profitable drugs in the history of the
    pharmaceutical industry. In fact, since 2018, Nova Nordisk has
    made nearly $50 billion in sales off of these two drugs.

        Importantly, for Members of this Committee, 72 percent of
    that revenue comes from sales in the United States of America.
    In other words, the United States is Novo Nordisk cash cow for
    Ozempic and Wegovy. And given that these drugs will need to be
    taken over the course of a lifetime, it's not a one-time drug.
    You take it for your whole life. Novo Nordisk can expect to
    receive tens of billions in sales and huge profits from these
    drugs year after year after year.

        Now, why does Novo Nordisk charge the American people such
    outrageously high prices for Ozempic and Wegovy? Are they
    acting illegally by charging us some such high prices? Are they
    violating the law? No, they're not. What they're doing is
    perfectly lawful. They are simply taking advantage of the fact
    that until very recently, the United States has been the only
    major country on earth not to negotiate the cost of
    prescription drugs. In other words, Novo Nordisk, and other
    drug companies, not just Novo Nordisk, can charge us as much as
    the market can bear, and that is precisely what they are doing.

        Now, in a few minutes, Mr. Jørgensen makes his
    presentation. We look forward to hearing from him. I suspect
    that he will tell us that the healthcare system here in the
    United States is complex, and that there is a difference
    between the list price and the net price as a result of the
    rebates that PBMs receive.

        This Committee has begun to do some serious work with
    regard to PBMs. And if he says that he is correct. But even
    factoring in all of the rebates that PBMs receive, the net
    price for Ozempic is still nearly $600, over nine times as much
    as it cost in Germany. And the estimated net price of Wegovy is
    over $800, nearly four and a half times as much as it cost in
    Denmark.

        What must also be understood is that not everybody can take
    advantage of the net price of these drugs. If you are
    uninsured, you pay the fullest price. If you have a large
    deductible, you pay the full list price. If you have co-
    insurance, the percentage of the price you pay at the pharmacy
    counter is based on the list price. And let's be clear, 75
    percent of Americans, over 190 million people with insurance,
    are unable to access Wegovy through their insurance policies.

        Mr. Jørgensen may also tell us that Novo Nordisk is
    afraid that if it substantially reduced the list price for
    Ozempic and Wegovy, PBMs may limit coverage for these drugs.
    Well, Mr. Jørgensen, let me ease your concerns. I'm
    delighted to announce today that I have received commitments in
    writing from all of the major PBMs that if Novo Nordisk
    substantially reduced the list price for Ozempic and Wegovy,
    they would not limit coverage.

        In fact, all of them told me they would be able to expand
    coverage for these drugs if the list price was reduced. I ask
    unanimous consent to insert the letters I received from the
    PBMs making this commitment into the record.

        [The following information can be found on page 62 in
    Additional Material:]

        The Chair. Now, let me share with the Committee some other
    important information that we have uncovered as part of our
    investigation. Last week, I received a letter from over 250
    doctors urging us to do everything that we can to substantially
    lower the price of these drugs.

        This should come as no surprise. What these doctors are
    telling us is that if the price of Ozempic and Wegovy is not
    substantially reduced, many of their patients who have diabetes
    and obesity, especially lower income Americans, often minority
    Americans, will be unable to afford these drugs. Some of these
    patients will unnecessarily die, and others will suffer a
    significant decline in their quality of life. I ask unanimous
    consent to enter that letter into the record.

        [The following information can be found on page 87 in
    Additional Material:]

        The Chair. Earlier this year, Dr. Allison Galvani, an
    epidemiologist at Yale University, conducted a study on Wegovy.
    And what she found, and I hope Mr. Jørgensen pays
    attention to this, is that over 40,000 lives a year could be
    saved if Wegovy were made widely available and at an affordable
    price to Americans who need the drug. 40,000 lives. I ask
    anonymous consent to insert that study into the record.

        [The following information can be found on page 116 in
    Additional Material:]

        The Chair. A few months ago, Dr. Melissa Barbara, a
    healthcare economist at Yale University, conducted a study on
    the cost of manufacturing Ozempic. And what she found is that
    Ozempic can be profitably manufactured for less than $5 a
    month.

        We all know the cost of production is not the only expense
    by far for a drug company. Pharmaceutical companies spend great
    sums of money on research and development to find new
    treatments with many of these products not coming to market. We
    all understand that. But it is important to know that this drug
    can be manufactured profitably for a few dollars a month.

        We may hear from Mr. Jørgensen that Novo Nordisk spent
    $21 billion on research and development since 2018, and I take
    his word on that. What he may not tell you is that Novo Nordisk
    spent $44 billion on stock buybacks and dividends over that
    same time period. In other words, since Ozempic came onto the
    market in 2018, Novo Nordisk spent over twice as much on stock
    buybacks and dividends than it spent on research and
    development.

        Let's be clear, outrage over the high cost of Ozempic and
    other prescription drugs is not a partisan political issue, as
    I expect every person on this Committee understands. It's not a
    Democratic issue, it's not a Republican issue. I'm an
    Independent, not an Independent issue. The vast majority of the
    American people are sick and tired of paying outrageously high
    prices for prescription drugs.

        For example, Dale Folwell, the Republican Treasurer of the
    State of North Carolina, has told us that if he did not
    discontinue covering Wegovy for some 20,000 state workers in
    North Carolina, he would've been forced to double health
    insurance premiums for teachers, firefighters, and police
    officers in his state. Regardless, if this drug was needed or
    not, he would've had to double health insurance premiums in
    North Carolina. Blue Cross Blue Shield of Michigan also
    announced they would have to discontinue covering Wegovy
    because it was too expensive.

        When we talk about differing political views, I will tell
    you that Elon Musk, not one of my great political allies,
    recently posted on Twitter, and I quote, ``Solving obesity
    greatly reduces risk of other diseases, especially diabetes,
    and improves quality of life. We do need to find a way to make
    appetite inhibitors available to anyone who wants them.'' And
    Mr. Musk is right.

        Further, not only must we be concerned about lack of access
    to these drugs, we have also got to take a serious look at the
    financial implications of what happens if the prices of these
    drugs are not substantially reduced. Bottom line, if just half
    of the adults in our Country with obesity took weight loss
    drugs like Wegovy at current prices, the cost would be
    astronomical and would have a devastating financial impact on
    our Country, and on Federal, and state budgets.

        Best estimate that I have seen suggests that if half the
    adults in our Country took these weight loss drugs, it would
    cost $411 billion a year. $411 billion. And that is more than
    what Americans spent on all prescription drugs at the pharmacy
    counter in 2020 or 2022. In other words, the outrageously high
    prices of these drugs could bankrupt Medicare, and radically
    increase premiums to absolutely unaffordable rates. This does
    not have to happen. It does not have to happen.

        Over the last several months, I and my staff have been
    talking to a number of major generic pharmaceutical companies.
    These are large companies that supply hundreds of millions of
    prescriptions to many millions of Americans. And what these
    CEOs have told me is of enormous consequence. They have studied
    the matter and they have told me that they can sell a generic
    version of Ozempic, the exact same drug that Novo Nordisk is
    manufacturing to Americans for less than $100 dollars a month.
    $100 dollars a month.

        Novo Nordisk charges us $969 a month for Ozempic. These
    generics can sell it to us for less than $100 dollars. Let's be
    clear, nobody here is asking Novo Nordisk to provide charity to
    the American people. Novo Nordisk has already made billions of
    dollars in profit, off of these products, and in the coming
    years will make billions more. All we are saying, Mr.
    Jørgensen, is treat the American people the same way that
    you treat people all over the world. Stop ripping us off.

        A few months ago, President Biden and I wrote an op-ed
    which appeared in USA Today, and here's what the President and
    I said. ``If Novo Nordisk and other pharmaceutical companies
    refuse to substantially lower prescription drug prices in our
    Country and end their greed, we will do everything within our
    power to end it for them. Novo Nordisk must substantially
    reduce the price of Ozempic and Wegovy. As Americans, we must
    not rest until every person in our Country can afford the
    prescription drugs they need to lead healthy, happy, and
    productive lives.'' From the op-ed from the President and
    myself.

        That's what President Biden and I wrote a few months ago,
    and that's what I believe. Prescription drugs in this country
    must be affordable, and we must not be forced to pay far higher
    prices than people in other countries for the same exact
    product. This is especially true when we face a national
    emergency in terms of the twin epidemics of diabetes and
    obesity, which if not addressed with lower cost drugs, could
    cost us tens of thousands of lives and an unimaginable amount
    of money. Congress and the Administration have a moral
    responsibility to act now, act boldly, and to protect the
    American people.

        Senator Cassidy, you are now recognized for an opening
    statement.

                      OPENING STATEMENT OF SENATOR CASSIDY

        Senator Cassidy. Thank you, Chair Sanders. Nearly 1 in 3
    Americans live with obesity. Nearly 1 in 10 have type 2
    diabetes. I'm a physician. I'm very aware of the implications
    of that. There are so many complications. Obesity leads to more
    chronic disease than any other condition, taking lives and
    causing almost $173 billion in healthcare spending a year.

        It's almost impossible to bring down healthcare costs
    unless we effectively address obesity. Now we have GLP-1s. They
    have the promise to address both obesity and the complications
    that result. They're expensive. Now, we can argue about the net
    versus the list, but they're expensive. But let me say, without
    a profit motive, without something in return, it's unclear that
    these drugs are--any drug is going to be developed. There is a
    tension. A tension between the need to incentivize innovation
    and the ability to afford that innovation. And we are here
    struggling with that balance.

        Now, if anyone thinks going after big pharma is the silver
    bullet, that if you do that, boom, healthcare costs and drug
    costs go down, then they don't understand what happens with
    pricing a drug. There is no silver bullet. But as my friend
    Angus King says, there is silver buckshot. You do a little bit
    here and a little bit there, and it adds up. So, the drugs
    become more affordable given that we still have to preserve the
    profit incentive for the creativity, for drug companies to
    invest in order to develop the drugs that are going to
    positively affect the burden of disease in our society.

        This is a simple example I've used before. When I was in
    medical school, one of the most common surgeries was removing a
    portion of someone's stomach because of peptic ulcer disease.
    And then a drug called cimetidine came out, Tagamet. And within
    6 months, that surgery was rarely performed. Tagamet is so
    simple, it's now sold over-the-counter, but it has saved so
    many people having disabling surgery.

        Now that is an example, but now we're speaking about
    Alzheimer's, and cancer, and obesity, and the complications
    from obesity. And I think we have to be realistic. It is a
    profit motive that incentivizes creative people with capital to
    go in and find that cure. So as this Committee examines the
    affordability of GLPs, we have to also examine how do we
    preserve that incentive for the innovation that is the tension.

        How do we preserve? Because, by the way, if we stop
    developing new drugs, Alzheimer's won't be cured, cancer won't
    be cured, and better drugs to address obesity and the
    complications of the metabolic syndrome will not either.

        Back to this hearing. There are serious questions that need
    to be asked. What has contributed to the high price of Ozempic
    and Wegovy? What are American patients actually paying for
    these drugs at the pharmacy counter? Frankly, what are Germans
    actually paying? They may pay some money at the counter, but I
    suspect that the health plan is also paying something. So, what
    is the true cost relative to the true cost to us?

        By the way, I'm particularly concerned with folks with
    health savings accounts because the Chair is right, if there is
    a list price, which is really high, and they have a drug
    benefit tied to their HSA, then that begins to drain their HSA.
    And I have always been an advocate of how do we make that
    health savings account more useful? But if it's being drained
    for a high list price, it is less useful. I'm about that. So,
    what can we do to make sure that Americans have access to an
    affordable cost, and at the same time, we have adequate
    incentive so that someone out there with an incurable disease
    knows that there might be hope along the way?

        I appreciate, Mr. Jørgensen, for attending the
    hearing. I look forward to your answers. Now, it's important to
    note that while drug manufacturers play a significant role in
    determining the cost of a drug, the problem's greater. It's
    more complex than the actions of any one industry. So, we need
    to make a serious effort to navigate the network of perverse
    incentives throughout our healthcare system, including taking a
    substantive look at health insurance benefit designs, price,
    transparency, regulatory barriers, and the perverse effects of
    government discount programs have on prices that Americans pay
    at the commercial market.

        This Committee has a long history of engaging in real
    bipartisan efforts to lower the cost of healthcare. Last year,
    Chair Sanders and I worked on the PBM Reform Act to address
    misaligned incentives affecting PBMs to lower the price
    patients pay for their prescriptions. The Committee passed this
    legislation with overwhelming bipartisan support. By the way,
    we need to get this across the finish line and signed into law.
    And this is the kind of bipartisan work needed to tackle the
    high costs patients face for GLP and for all drugs.

        Thanks again for coming today, Mr. Jørgensen. I look
    forward to you explaining how to balance this tension between
    innovation and affordability.

        With that, I yield.

        The Chair. Thank you, Senator Cassidy. We will now turn to
    our witness panel. For the awareness of all Senators and the
    witness, Ranking Member Cassidy and I have reached an agreement
    where we will both have an equal amount of time to ask the
    witness questions, and all other Members will have 7 minutes to
    ask the witness questions.

        Our sole witness today is Mr. Lars Jørgensen. Mr.
    Jørgensen has been with Novo Nordisk since 1991, and was
    appointed President and CEO of the company in January, 2017.
    Mr. Jørgensen, thank you very much for being with us. You
    may proceed with your testimony.

      STATEMENT OF LARS FRUERGAARD JORGENSEN, PRESIDENT AND CHIEF
          EXECUTIVE OFFICER, NOVO NORDISK, BAGSVAERD, DENMARK

        Mr. Jorgensen. Chairman Sanders, Ranking Member Cassidy----

        The Chair. Sorry. Make sure the mic is on there.

        Mr. Jorgensen. It is on. Maybe I'll move this. Can you hear
    me now?

        The Chair. Yes. Much better.

        Mr. Jorgensen. Chairman Sanders, Ranking Member Cassidy,
    Senators, thank you for the opportunity to speak again before
    the Health, Education, Labor, and Pension Committee on behalf
    of Novo Nordisk. Last year, I was asked to testify about
    patients living with diabetes and insulin affordability. This
    year I volunteered to appear before the Committee on policy
    solutions for patients living with obesity and the challenges
    they face navigating the complex U.S. healthcare system. I
    appreciate the opportunity to engage here today.

        For decades, our public discourse about obesity and to some
    extent, too, diabetes, was based on misinformation and blame.
    These conditions were treated as a personal choice, a failure
    of willpower. No one was talking about how these are chronic
    diseases and treatable diseases.

        With the discovery of Semaglutide and the development of
    Ozempic and Wegovy, our collective understanding of these
    diseases fundamentally changed. But this shift was not a
    forgone conclusion. This was a long and winding road. It began
    more than 100 years ago when our company was formed. Novo was
    founded on the mission to not only treat but defeat diabetes to
    1 day find a cure. And it was built on the idea that our
    success must be measured by looking at more than our financial
    sustainability, but also our societal and environmental
    sustainability.

        To this day, Novo maintains its unique ownership structure
    that protects its mission. The Novo Foundation is among the top
    three largest foundations in the world, rivaling the Gates
    Foundation, and it serves as our controlling shareholder. For
    over 100 years, the foundation has supported initiatives that
    improve health and sustainability of the planet. This ensures
    that our time and resources are focused on unlocking cures for
    chronic diseases.

        Senator Cassidy. Mr. Jørgensen, can you push--pull
    that microphone a little bit closer to you?

        Mr. Jorgensen. Yes. Sorry about that. It's better now?

        Senator Cassidy. Can you work on a medicine for bad
    hearing? Okay. That be next----

        [Laughter.]

        Mr. Jorgensen. It's not really our expertise, but maybe one
    day. This ensures that our time and resources are focused on
    unlocking cures for chronic diseases, not on daily stock
    fluctuations. And our focus on this mission is how Ozempic and
    Wegovy we came about.

        In the early 1990's, Novo Nordick's scientist, Dr. Lotte
    Bjerre Knudsen, then a junior researcher in our labs set out to
    take a hormone that naturally decays in the body within
    minutes, and to make it last long enough to become a medicine
    to combat diabetes. It took years before she and her team
    evolved and solved that puzzle, and more than a decade longer
    to turn the research into Liraglutide, our pioneering once-
    daily GLP-1 medicine.

        After this discovery, many believed that innovating beyond
    Liraglutide was, at best, unnecessary, and at worst impossible,
    including most of our competitors. However, another tenacious
    team of Novo scientist refused to give in. In November, 2004,
    these scientists created 12 milligrams of Semaglutide, an even
    more potent molecule to combat diabetes. Even after that, it
    was still 14 years more in the making until Ozempic was finally
    approved. And another 4 years after that until Wegovy was
    approved.

        We didn't stop there. In 2017, we launched the largest
    clinical trial in the history of the company, enrolling more
    than 17,000 patients across 41 countries. We demonstrated
    Semaglutide dramatic reduction in mortality for those suffering
    from cardiovascular disease and living with obesity. And
    because of our commitment to health discovery, we can now say
    that Liraglutide is the only weekly GLP-1 on the market that is
    FDA approved to reduce the risk of a major adverse
    cardiovascular events, which is the No. 1 cause of death in
    America today. We are also conducting even more clinical trials
    to understand how Semaglutide may affect and treat chronic
    kidney disease, liver disease, and Alzheimer's disease.

        But we know these discoveries are only effective if
    patients can access them. So along with the scoring
    revolutionary medicines, we have committed to expanding
    manufacturing capacity. It took over 50 years to advance our
    science and manufacturing capacity for insulin production to
    meet demand. Today, we can provide insulin to nearly 30 million
    patients.

        But patients living with type 2 diabetes and obesity can't
    wait another 50 years. That is why since the beginning of last
    year, we have committed over $30 billion to expand
    manufacturing capacity. To put the $30 billion in perspective,
    this is 20 percent more than the entire U.S. Space Program, is
    also four times the amount that Congress has set aside for
    National Electrical Vehicle Charging Network.

        Our commitment includes $4 billion in new investments to
    expand our facility in North Carolina, on top of the $5 billion
    we have already invested there creating thousands of
    construction jobs and manufacturing jobs in the state. We spent
    these resources because we can't afford not to. Type 2 diabetes
    has cost U.S. approximately $413 billion every year, and
    obesity cost the U.S. $1.7 trillion, and we all know the
    physical and emotional toll these diseases make.

        You have said that our amazing medicines can't help
    patients if they can't afford them. That is true. It's also
    true that the full value of Ozempic and Wegovy can only be
    realized if patients can access them. Patients need both
    affordability and access. That's why we afford to secure public
    and private insurance coverage for patients with type 2
    diabetes and patients with obesity.

        We are pleased to say that Ozempic is covered by 99 percent
    of all commercial plans by Medicare and by Medicaid in 50
    states. And while Wegovy, it was only recently approved by the
    FDA in 2021, today, it's covered by half of the commercial
    plans, as well as over 20 state Medicaid plans, the Department
    of Veterans Affairs, the military, the Indian Health Service,
    and for all Federal employees. And hopefully soon, for seniors.

        With that said, it's clear that patients too often struggle
    to navigate the complex U.S. healthcare system. It's also clear
    that no single company alone controls such vast and complicated
    policy changes. So, what I can promise is that Novo will remain
    engaged and work with this Committee on policy solutions
    through addressing the structural issues that harm patients and
    drive up cost.

        I can also commit that we'll never stop driving chains to
    defeat serious chronic diseases like diabetes and obesity. I
    appreciate the Committee's focus on ensuring patients living
    with chronic diseases can have affordable access to the
    medications they need, and look forward to your questions.
    Thank you very much.

        [The prepared statement of Mr. Jørgensen follows:]
                   prepared statement of lars jørgensen
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        The Chair. Thank you very much, Mr. Jørgensen.

        Mr. Jørgensen, this Committee, and you and others have
    talked a lot about list prices. You make the point that we have
    a complicated system and you're certainly right.

        We talked about list prices, we've talked about rebates,
    we've talked about net prices. But at the end of the day, under
    your best-case scenario, the price you are charging Americans
    for Ozempic is still nearly $600. That's with all of the
    rebates and all of the discounts, that's over nine times as
    much as people in Germany pay for the product. And the price
    you are charging for Wegovy to Americans is over $800, nearly
    four and a half times as much as it cost in Denmark.

        Very briefly, and number of people going to be asking you
    questions, please tell me why you think it is appropriate to
    charge Americans nine times more for the same exact product
    that you sell in Germany. And by the way, correct me if I am
    wrong here, but I assume that when you sell Ozempic for $59 a
    month in Germany, you are making a profit there. Am I correct
    on that?

        Mr. Jorgensen. Senator, let me start by acknowledging and
    sharing your wish to have affordable medicines for Americans.
    And there's been a number of numbers mentioned here. And I
    think it's important to say that these are not comparable data.
    When I mentioned that it's really important for us to secure
    access to patients and affordability, we are hard at work in
    making sure that patients have access via the insurance
    schemes. And today, 80 percent of all Americans with insurance
    have access to these medicines at $25 or less for a month's
    supply. So, it's a price point at the pharmacy counter we have
    to talk about.

        The Chair. Let me just interrupt you, if I might. You are
    correct that many people pay $25 a month for Ozempic. But what
    you're forgetting to mention is that many of those people are
    paying outrageously high prices for the insurance that covers
    Ozempic and other drugs. So simply this is a pass due to the
    insurance companies. Bottom line is you are charging the
    American people substantially more for the same exact drug than
    you are charging people in other countries. And my question is
    why?

        Mr. Jorgensen. Senator, I appreciate the question. Let me
    try to explain how I see it. We launched Ozempic in 2018. We
    have had it on the market for some years. During those years,
    our price has declined by 40 percent. I mentioned that patients
    with insurance have access to the $25 or less for 80 percent of
    the cases. And if you look in this period in Medicare where
    there's broad coverage premiums have not gone up in the same
    period. The insurance companies and their PBMs, the big
    conglomerate of illegal entities, they have more than doubled,
    actually close to tripled their profit.

        The fact that we can actually secure that 99 percent of
    people with insurance have access, that there's a copay at the
    pharmacy of $25 or less without premiums going up in Medicare
    while profit goes up for, for the middlemen, I think is a
    concerning data point.

        The Chair. Well, I would simply say that most Americans
    would be surprised to learn that insurance rates are not going
    up in my state. They're going up by 14 percent. But once again,
    you are not answering my question. It's a very simple question.
    In Germany, they're paying $59 for Ozempic. In the United
    States, we pay $969. And again, even with all of the discounts,
    we are still paying very substantially more than the people of
    any other country. And you are selling--as I understand, 72
    percent of your revenue comes from the United States. That
    right, roughly?

        Mr. Jorgensen. If it's based on our accounts, you're right.
    I don't have the number from the top of my head.

        The Chair. Okay. So, you're making huge amounts of money in
    this country and you're charging us far more. And you haven't
    given me an answer as to why. Let me ask you another question.
    A recent study from Yale University has estimated, as I
    mentioned earlier, that 40,000 lives in America could be saved
    each and every year if Novo Nordisk substantially reduced the
    price of Wegovy and made it available to everyone who needs
    this drug at an affordable price. From a moral perspective,
    does it bother you knowing that keeping the price of Ozempic
    and Wegovy so high in the United States could lead to the
    preventable deaths of tens of thousands of Americans?

        Mr. Jorgensen. Senator, we are very committed to make sure
    that Americans have access at an affordable price point for our
    medicines. There's nothing we would rather see happen. We have
    just announced $30 billion investments to increase capacity to
    serve these patients. There is a market we have to operate in
    and we negotiate hard to make sure that Americans have access.
    We negotiate against the PPMs and give them significant rebate
    discounts and fees.

        The Chair. Mr. Jørgensen, you're not answering the
    question. And look, as you may know, I'm a great respecter of
    the people of Denmark. I think you have a social system, which
    is very progressive. But I'm asking you a simple question as a
    decent human being.

        What studies tell us is that because of the very high price
    of your products, 40,000 people a year may die in America and
    you have not increased production is fine. But what I am asking
    you is if you don't act, 40,000 people a year could die, is
    this acceptable to you?

        Mr. Jorgensen. Any prospects of patients not getting access
    to the medicine they need, I think, is terrifying. And we have
    to solve this challenge together. I mentioned in my opening
    that I don't think any one company can solve that alone. I wish
    there were more at the table today so we could have discussion
    about how we do that together.

        We don't decide the price for patients. That's set by the
    insurance companies. I do acknowledge that there are patients
    who have poor insurance or no insurance. And if you in the U.S.
    do not have insurance, if you have a low income, we actually
    have support programs to help those patients. I'm proud about
    those.

        But they are not a real solution because patients should
    have access to medicines via insurance. Because if you live
    with a chronic disease like type 2 diabetes, obesity, these are
    complex diseases that requires access to physicians. They're
    comorbidities you need to have treatment for. So, I strongly
    believe we need to solve this within insurance. And when you
    are in insurance, there is access to our medicine.

        The Chair. Well, Mr. Jørgensen, this Committee has
    heard from insurance companies, we've heard from PBMs, we've
    heard from everybody in the world and everyone blames everybody
    else. But you still have not answered my question. It's a very
    simple question. Why Nova Nordisk is charging Americans
    substantially higher prices for these drugs than the people in
    other countries?

        Let me get to another issue. Mr. Jørgensen, you have
    told this Committee that you are concerned that if you
    substantially lowered the list prices of Ozempic and Wegovy in
    the United States, PBMs may take these drugs off of their
    formularies and deny access to the patients who need these
    drugs. I think you used insulin as an example even.

        However, I have received commitments in writing from the
    major PBMs that if Novo Nordisk lowered its list price, they
    would not limit access to Ozempic and Wegovy, and would not
    take these drugs off of their formularies. Given this fact,
    will you commit today that Novo Nordisk will substantially
    reduce the list price of these drugs in the United States so
    that the American people are not paying higher prices, far
    higher prices for these drugs than the people in Europe and
    Canada?

        Mr. Jorgensen. Thank you, Senator, for that information.
    That's new information for me. Anything that will help patients
    get access to affordable medicine we'll be happy to look into.
    I'd just like to make a comment also that the experience as you
    also allude to yourself from insulin is one of when we had a
    discussion last year in the hearing on insulin. We actually
    lowered insulin pricing. That had a consequence.

        When we dropped some of the insulin prices, we had our
    products dropped from formulary coverage. So, less patients got
    access to those insulins. So, I have a bit of concern how this
    could play out, but anything that can help patients get access
    to the medicines they need at affordable price point, we'll be
    happy to collaborate around that.

        The Chair. All right. Are you prepared to have Novo Nordisk
    sit down with the PBMs who have made that commitment to me that
    they will not take your products off of the formulary, sit in a
    room with us and work on an agreement?

        Mr. Jorgensen. I'll be happy to. As I said, do anything
    that helps patients. And I don't know under which conditions
    such a promise comes. I haven't seen any of that.

        The Chair. Okay. I will get you the--they're in writing,
    and I'll get you the letters. All right. That's it for me right
    now. Senator Cassidy, do you want to ask?

        Senator Cassidy. I defer to Senator Collins for her 7
    minutes of questions.

        Senator Collins. Thank you very much, Senator Cassidy. Mr.
    Jørgensen, you testified that the net price of what your
    company is actually paid for Ozempic has declined by about 40
    percent since its introduction. Is that correct?

        Mr. Jorgensen. Yes, that's correct.

        Senator Collins. But the question remains, how do we get
    relief to patients at the pharmacy counter? As Senator Cassidy
    mentioned, this Committee's examined the role of the middlemen,
    the PBMs, in inflating costs. And more than a year ago in May
    2023, our Committee reported a comprehensive bill that reformed
    PBM practices. And the whole purpose of that bill was to ensure
    that consumers got relief at the pharmacy counter.

        Unfortunately, the Senate Majority Leader and the Chairman
    have not brought that bill to the Senate floor in more than a
    year. Could you give us some indication of what the impact on
    cost to consumers would be on prices if we had enacted that PBM
    reform bill?

        Mr. Jorgensen. Yes. Thank you, Senator, for that question.
    If we look at it today, PBMs and their insurance companies, or
    I think typical insurance companies that own PBMs, a number of
    legal entities set up to extract fees from the U.S. system,
    they are rewarded based on list price. So, they get a fee based
    on list price. So, the higher list price, the more fee they get
    for the same job. Which means that, in our experience, products
    that comes with a low list price get less coverage. It's less
    attractive.

        That becomes troublesome for patients because patients who
    do not have insurance or have high deductible plans are then
    asked to pay the list price. We pay on average 74 percent in
    rebates, discounts, and fees, and even more when we are into
    Medicaid 340B, ET cetera. So, if we did our business based on
    net price instead of list price, that would mean that our
    products would be much more affordable for patients. And if we
    simply paid the PBMs a small fee for the limited risk and
    contribution they make, I think patients would be significantly
    better off.

        Senator Collins. For every dollar that you sell in
    medicine, how much of that dollar goes to rebates, fees, and
    discounts that largely do not get passed on to the patient?

        Mr. Jorgensen. Yes, for every dollar we make we give 74
    cents to the PBMs insurance companies.

        Senator Collins. 74 cents of every dollar. Let me switch to
    another issue just to make sure that I understood. In your
    opening statement, you seem to say that your largest
    shareholder is a nonprofit charity foundation. Is that correct?

        Mr. Jorgensen. Yes, that's correct.

        Senator Collins. Let me turn to another issue. Recently,
    your company discontinued production of Levemir, and that is a
    popular, long-lasting basal insulin. Ironically, just yesterday
    I heard from a mother from Denmark, Maine, whose daughter takes
    Levemir and feels that it has unique benefits for her clinical
    situation. So, making a sudden switch or change in her
    medication is very much of concern to this mother, what led to
    this discontinuation?

        Mr. Jorgensen. Yes. Thank you, Senator. Any decision to
    stop supplying any medicine is a very difficult decision
    because we acknowledge that different patients have different
    needs. In the case of Levemir, we actually lowered the list
    price in the U.S. by 65 percent last year. Just realized that
    after we dropped the price of Levemir, the PBMs dropped
    coverage. So, it went from being on 90 percent of insurance
    schemes to being only on some 35 percent. So, we see a dramatic
    lowering of volumes.

        As I mentioned in my opening, we serve 30 million people
    living with type 1 diabetes in need of insulin. And it's
    difficult for us to run high volume manufacturing lines with
    small products because it prohibits us from actually serving
    all those patients. So, it was a difficult choice we had to
    make to make sure that we could sustainably supply enough
    insulin for all people with type 1 diabetes. But I do
    acknowledge that it comes with some stress for individual
    patients, unfortunately.

        Senator Collins. Well, I hope that you will be giving
    guidance to these families because for some of them, this is a
    real blow and they're very concerned about the impact. I want
    to go back to the cost issue, which is critically important.
    How does your company help individuals who are part of low-
    income families, do not have insurance, and simply cannot
    afford your drugs?

        Mr. Jorgensen. Yes. Thank you, Senator. It's important for
    us that we also try to help the most vulnerable patients. So,
    we have worked hard to make sure that's coverage in Medicaid
    for our medicines. And we also have patient support programs.

        For instance, if you live with type 2 diabetes and you are
    in need of a product like Ozempic, you can contact Novo
    Nordisk. And if you make less than 400 percent of the national
    poverty line, which as illustration is $120,000 as a household
    income, you can get free Ozempic from Novo Nordisk. And I
    believe we're the only company having such a support program.

        Senator Collins. If your household makes less than
    $120,000, you can participate in your patient assistance
    program?

        Mr. Jorgensen. Yes. And I don't think it's an ideal
    situation because, honestly, patients should have access to
    insurance. Because if you live with type 2 diabetes, you're
    also at risk of having cardiovascular disease, kidney disease.
    So, you need a range of medical support. So, I think we should
    have, as a shared objective, we really make sure that people
    have access to proper insurance. And when they have that, we
    can work with different mechanisms to make sure that when
    they're at the pharmacy counter, they can pick up our medicines
    for $25 or less in most cases. But that's difficult when you
    don't have insurance.

        Senator Collins. My time has expired. Thank you.

        The Chair. Senator Lujan.

        Senator Lujan. Thank you, Mr. Chairman. Mr. Jørgensen,
    thank you for being here, sir. In your opening statement, you
    said, ``Patients need both affordability and access.'' I very
    much appreciate you saying that. Now, Wegovy and Ozempic are
    groundbreaking drugs that are making a huge difference in
    people's lives. The ability to quiet food, noise, and
    successfully manage their weight after so many failed attempts
    is truly a life-changing innovation.

        But to make a positive difference in people's lives, they
    have to be able to afford it as well. I've heard from New
    Mexicans about unaffordability. I'll share a story that I heard
    from Bernadette. She's a mother of three in Albuquerque, New
    Mexico. In October of 2023, Bernadette was prescribed Wegovy
    for diabetes and a liver condition. Her insurance denied
    coverage of Wegovy three times. Bernadette's Wegovy
    prescription would've cost about $1,000 after a $300 discount.

        Her doctor then prescribed Ozempic. After two appeals,
    Bernadette's health insurance company approved her
    prescription. Even with health insurance, Bernadette's Ozempic
    prescription would've cost around $1,000 a month. Bernadette
    made the difficult decision to not pay $12,000 annually for
    either Wegovy or Ozempic, both prescriptions prescribed by her
    doctors. She now goes without.

        According to JAMA, the adult Hispanic population in the
    United States has 45.6 percent obesity incidents. Black and
    Hispanic people are more predisposed to having type 2 diabetes,
    a condition related to obesity. The median household income in
    New Mexico is $62,268, or $5,189 a month. The median household
    income for Hispanic families across the United States is
    $65,540, or $5,461 a month.

        Even with a 40 percent reduction in the list price, the
    cost of these drugs represent a huge part of the monthly income
    of new Mexicans and Hispanic Americans. I also heard through
    your testimony, the coupons or things of that nature that are
    included from the list price. Why don't you just sell the drug
    at the coupon price if you're willing to give people a coupon
    that can afford it instead of that list price that we see on
    that board?

        Mr. Jorgensen. Thank you, Senator, for bringing up that
    question and also addressing this, the needs of Hispanic and
    Black populations. I think that's really, really important. It
    is not our intention that anyone should pay the list price. The
    list price is the starting point for our negotiation against
    the PBMs and insurance companies in bringing coverage of our
    medicines to patients. And in particular, those you mentioned
    here in having a bigger need.

        We see that when there is insurance company coverage, there
    is a price point of the $25 I mentioned for 80 percent of
    patients. And you can say, what about the remaining 20 percent?
    The price point is $50 or less for 90 percent of the cases. And
    then there are remaining 10 percent where there are either a
    situation without insurance, or you can say low quality
    insurance where insurance schemes have high deductibles or
    certain restrictions on use of the products.

        It's important for me to say we don't set the price for
    those patients. That's a function of the insurance scheme. But
    for those who fall outside of insurance and actually including
    the income level you mentioned, we have a support program where
    we try to help them.

        Senator Lujan. Well, and Mr. Chairman, if I may, Mr.
    Jørgensen, Bernadette had insurance. Couldn't afford it.
    No. So, I appreciate the statistics and the numbers. She's a
    real person, mother of three. There's a problem here. I've not
    quite understood the notion of list prices with pharmaceutical
    companies and then the price that they're willing to sell the
    drug at so they can still make a profit. It sounds like a game
    to me and a game that I don't understand. But a game I
    certainly open a bipartisan way that we can get to the bottom
    of.

        I very much appreciate Senator Collins' line of questioning
    at the opening as well, legislation that's moved out of this
    Committee deserves to be heard on the floor. And I certainly
    hope we can get there.

        I'm going to move on. Before I do, while I appreciate very
    much that the Indian House Service and the VA include coverage
    for obesity and for other reasons of this drug, it's still
    high. It's still a high cost. And when we look at those
    programs as a whole, I'm still very concerned as to what's
    happening in that space. But I look forward to visiting with
    your team more about that into the future.

        Mr. Jørgensen because of the work that was done with
    the Inflation Reduction Act, Medicare can finally negotiate the
    price that seniors pay for prescription drugs and Medicare. In
    your written testimony, you have acknowledged that Ozempic may
    be listed in the negotiations due to its high cost. Despite
    these contentions that Medicare negotiation will resolve the
    price, Novo Nordisk has attempted to block the law when
    Medicare sought to negotiate the prices of insulins. These
    insulins, by the way, had the list prices of almost $6,000
    annually.

        Now, as we both know, the court rejected that as well. My
    question for you, Mr. Jørgensen, when you mentioned in
    your written testimony that you expect Ozempic, your diabetes
    product will be included in Medicare's list of drugs for
    negotiations, yes or no, should Ozempic be selected for
    negotiation, will you commit to not initiating legal action to
    stop it?

        Mr. Jorgensen. Senator, thank you for bringing up that
    question. So, we share the objective of making products
    accessible and affordable for patients. No doubt about that. On
    the IRA negotiation, we have had some concerns that if it's a
    real negotiation, I support that. But if it's a price setting,
    I think it'll have unintended negative consequences to access
    to patients for innovation.

        It's been described as a negotiation, but it's actually a
    setting of a maximum price. So, I don't know what price will
    end up having for our insulins. I don't know if the PBMs will
    include it on formulary at all because of that lower price and
    impact on rebating.

        I have nothing against negotiating pricing with the
    objective of improving affordability for patients. But if it's
    not a fair negotiation, but actually price setting, I think
    it'll have negative consequences on the innovation being
    brought to Americans.

        Senator Lujan. Mr. Chairman, as I close, my time has
    expired. I would remind you, Mr. Jørgensen, of those words
    that you used in your opening statement again, ``Patients need
    both affordability and access.'' I certainly hope that rings
    true. And I would encourage you to sit down with Chairman
    Sanders and the Committee staff associated with that PBM letter
    to find a place where you will lower those prices, and do the
    right thing, and send the message to everyone. Because your
    drugs will save people's lives. 40,000 more people that can't
    get them today, many in the community that don't get them
    today, and I certainly hope we can get to that place. Thank
    you, Mr. Chairman.

        The Chair. Thank you.

        Senator Cassidy.

        Senator Cassidy. I'll defer to Senator Budd.

        Senator Budd. Thank you, Ranking Member. Thank you, Chair.
    Mr. Jørgensen, thank you for being here.

        According to reports, the North Carolina State Healthcare
    Plan attempted to limit coverage of one type of obesity drug,
    the GLP-1 that we're talking about today for enrollees to avoid
    raising premiums. Now, however, CVS Caremark, the state
    healthcare plans, PBM informed them that they would lose $54
    million in discounts if coverage was limited. So, Mr.
    Jørgensen, do you know if these allegations are true?

        Mr. Jorgensen. I have to admit, I don't know all the
    details of the specifics of North Carolina, but I don't think
    we stopped paying these rebates.

        Senator Budd. I received a letter from North Carolina
    Speaker of the House, Tim Moore, and it includes data on the
    State Health Plan's Board of Trustees blaming the Inflation
    Reduction Act, not drug spending on the plan's shortfalls. So,
    I ask unanimous consent to enter the letter into the record,
    Mr. Chairman.

        The Chair. Without objection.

        [The following information can be found on page 132 in
    Additional Material:]

        Senator Budd. Thank you.

        Mr. Jørgensen, could you describe in as simple terms
    as possible how Federal programs like the 340B Drug Discount
    Program and reimbursement for prescription drugs through
    Medicare Part B actually lead to higher prices, and I would
    say, higher list prices?

        Mr. Jorgensen. Well, when we set a list price, we have to
    take into consideration what are the rebates we have to pay,
    because unless we pay rebates into the system too, when we
    negotiate against the PBMs, we're not getting access to the
    formulary. So, a high list price is more likely to lead to more
    access to patients. And on top of that comes additional
    payments we have to give when we are in Medicaid, when we are
    in 340B programs, ET cetera, where there are additional
    payments, we have to make to make products affordable.

        It leads to higher prices for those patients who then do
    not have access via insurance or some of these programs because
    they're faced with a list price. And really nobody should pay
    the list price, because that's not how we intend to do
    business. But we don't control the price set for the patients
    that's done by the insurance schemes. We only negotiate against
    the PBMs to make sure that we can move products to patients.
    But whether patients get insurance coverage and what price they
    pay, we have no impact on.

        Senator Budd. It seems like an industry with a lot of
    strange incentives. Last November The Wall Street Journal
    reported that PBMs often favor drugs with higher list prices.
    And I appreciate my colleague, Senator Collins line of
    questioning. But the favoring drugs with higher list prices is
    because PBMs are reimbursed based on a percentage of the drugs
    list price.

        As I understand it, that means PBMs are going to make more
    money if they cover the higher priced drugs. So, here's for an
    example, insulin. One type of insulin had a list price of $274,
    while an unbranded version of the same insulin had a list price
    of $25. And even though the unbranded version was $250 cheaper,
    the PBM didn't cover the cheaper version. So, and my
    understanding is only half of Americans have insurance coverage
    for that cheaper insulin.

        This is a direct result of PBMs facing or favoring the more
    expensive type of insulin. So, I understand, and I appreciate
    your statement earlier that whatever's best for patients, and I
    believe that you and the many great team members that you have
    at Novo. So, Mr. Jørgensen, are there ways to reduce these
    perverse incentives? And we're asking for suggestions here, and
    perhaps this will come in ongoing discussions with the
    Committee. But in your time here, do you have some suggestions
    to reduce these perverse incentives to deliver savings and
    value to the patients in need?

        Mr. Jorgensen. Thank you, Senator. We should really unite
    around what help patients and if you have the industry making
    big risks in R&D, making big commitments into manufacturing,
    and then we have to negotiate against PBMs and their insurance
    companies not taking much risk and yet benefiting from a
    significant deal to the list price. I think that's absurd. So,
    if we could stop linking their income to a list price, I think
    that would create an incentive that is not as absurd as it is
    today.

        I would prefer doing business on the net price where I
    compete against competitors based on what is the real price for
    our medicine and what is the value of the medicine. And these
    are medicines that are addressing societal challenges that are
    paramount. And we talk about the cost of the medicine, but it's
    really the cost of the diseases that's breaking the system.

        We have to find a way where we transact in a way where it
    becomes much more transparent. What is the real price of the
    medicine to really adopt the medicine and mitigate the societal
    cost that diabetes and obesity is putting on the U.S.
    healthcare system and economy?

        Senator Budd. As you observe, kind of outside looking in,
    what changes would you suggest that we consider to move from a
    list price scenario? So, where you could, and other companies
    and competitors even could compete on a net price scenario? And
    do you believe that would be better for patients?

        Mr. Jorgensen. Yes. If we passed on the rebates we pay to
    the PBM, and the insurance companies, and group purchasing
    organization, whatever they're called, if we pass that on to
    patients then they are faced with the net price at the pharmacy
    counter. I think that would dramatically change it to a much
    more affordable system where it's the value of the medicine for
    the patient, the prescriber that determines what products is
    being used, not who gives the highest rebate.

        Anything that opens up transparency and make it, really
    competitive in a free-market context where you compete on price
    and value of medicines, I think, would be a great benefit for
    American citizens.

        Senator Budd. Thank you, Mr. Chairman.

        The Chair. Senator Baldwin.

        Senator Baldwin. Thank you, Mr. Chairman. Thank you for
    holding this important hearing about outrageous prices that
    Americans pay for prescription drugs compared to the rest of
    the world. I remain deeply concerned that pharmaceutical
    companies continue to put profits over patients. Patients
    deserve access to affordable prescription drugs. We have taken
    meaningful steps to lower prescription drug costs. For example,
    working with Chairman Sanders and other Members of this
    Committee, we secured commitments from three companies to cap
    the cost of asthma inhalers at no more than $35 per month out
    of pocket.

        Moreover, by allowing Medicare to negotiate drug prices for
    the first time ever, 150,000 Wisconsinites will soon see
    significant savings on 10 of the most widely used and costly
    medications. Insulin is now capped at $35 per month for
    Medicare patients, and next year, out-of-pocket costs will be
    capped at $2,000. But there is much more work to be done, and
    I'm committed to working with my colleagues to find more ways
    to lower the cost of prescription drugs and hold pharmaceutical
    manufacturers accountable for outrageous prices.

        Today, I would like to begin by discussing patient access
    to medications. Mr. Jørgensen, your company was originally
    founded to provide insulin to patients with diabetes. For
    diabetic patients, the inability to access insulin can be life
    threatening. Without access to their prescribed medications,
    patients would be left to scramble to find alternatives, or
    they would be faced with rationing their supplies.

        Mr. Jørgensen, you and your company have attributed
    shortages of your products, including GLP-1 and insulin to
    manufacturing capacity. You have noted in your testimony that
    the overwhelming majority of your company's recent
    manufacturing investment is to expand production of GLP-1
    medications. However, there have been reports of looming
    discontinuation of insulin products and ongoing shortages of
    insulin products. So, is Novo Nordisk shifting manufacturing
    capacity away from insulin to prioritize manufacturing of GLP-1
    drugs?

        Mr. Jorgensen. Thank you, Senator, for raising these
    important questions. And you're right, we have 100-year history
    in diabetes. We are committed as ever to diabetes. We are one
    of very few companies who are still doing research in insulin.
    We actually have, I would, say a breakthrough insulin being
    reviewed by the FDA, and we hope to launch that in the U.S.
    market in a couple of years. So, we are as committed to insulin
    as we have always been.

        When there's been challenges in supply it's not because we
    are taking capacity away. There is a market now where insulin
    pricing is going down dramatically. I am concerned about the
    long-term supply of insulin because we have 100-year commitment
    to that, and we will keep producing insulin. But I think it's
    becoming difficult for new companies to get in. I think it's
    very difficult for biosimilar manufacturers to get into this
    market because they can simply not get on formulary.

        Right now, entry and pricing is declining still by 10, 20
    percent year over year. If this market structure continues,
    it'll be challenging to supply insulin. And this is in dire
    contrast to the public narrative around in insulin price going
    up. So, if it's dramatically going down for manufacturers,
    biosimilars are not willing to start producing insulin and cost
    goes up for patients. I think that's a good example of how this
    system is not working.

        But to answer your question, we will keep producing
    insulin. We are committed to patients in need of insulin.

        Senator Baldwin. How will your company ensure that the
    manufacturing capacity for critical insulin products remains
    stable within your company? I know you were talking a lot about
    other companies, but how will you ensure that manufacturing
    capacity within Novo Nordisk remains stable?

        Mr. Jorgensen. That's a commitment we have made a priority,
    we have made in the company. And I mentioned the
    discontinuation of Levemir as a difficult choice to make,
    because when a product is going down significantly in volume,
    it actually ends up, you can say, destroying the ability to
    produce enough on the line. Because every time you have to
    produce a different product, you lose a capacity. So, we focus
    our manufacturing to make sure that we can still supply the 30
    million people around the world who need insulin from an
    onwards.

        We continue to do research and development to make sure
    that people with type 1 diabetes, who I agree with what has
    been mentioned today, probably live the most difficult life of
    all in terms of having a lifesaving medicine they rely on each
    and every day, and they need a company they can trust for
    supplying high quality products that live up to FDA
    requirements, ET cetera. And we are committed to do that.

        Senator Baldwin. I have your commitment that
    notwithstanding the manufacturing capacity that you're creating
    for GLP-1, that you will continue to have a focus on providing
    critical insulin, you will not reduce your manufacturing
    capacity in that area?

        Mr. Jorgensen. The world market for insulin is actually
    declining, so there's less demand, but we are committed to
    supply to the patient that has been using our insulin for years
    also into the future. And we'll keep investing in innovation
    because using insulin is probably the most difficult
    pharmaceutical intervention patient does.

        Staying in range is difficult. And we have a major
    innovation in weekly insulin coming, something most physicians
    would say would be impossible to do. Yet, our committed
    researchers cracked the code and we hope we are approved for
    that in the U.S. in the coming years' time. And that will
    simplify how people who rely on insulin can dose their insulin
    and take some of the fear away.

        Senator Baldwin. Thank you.

        The Chair. Senator Cassidy.

        Senator Cassidy. I will defer to Senator Marshall.

        Senator Marshall. Thank you, Dr. Cassidy. And thank you,
    Chairman Sanders. Mr. Jørgensen, welcome and thank you for
    attending this hearing.

        Look, Novo Nordisk is not the villain in this story. Novo
    Nordisk is not the villain in this story. They're a hero. We
    should be here celebrating this miracle innovation that's
    responding to this diabetic epidemic we have in this country.
    It's a miracle drug. 38 million Americans with diabetes that
    we're helping out. This nation is spending $250, maybe $350
    billion a year treating diabetes, not to mention the loss of
    work. And here's a drug that's going to help us treat the
    problem.

        We all agree on this Committee, across the Senate, that the
    cost of healthcare is too much and that prescription drugs are
    too high, especially the out-of-pocket expenses. But we need to
    figure out who the villain is, who is the real culprit here?
    Who's making the money?

        On this particular poster, you've said it once, you've said
    it twice, everybody up here said the same thing. Whatever the
    cost is, whichever number we want to use, Novo Nordisk keeps 24
    percent of it, and the PBMs extract 74 percent. 26, and 74
    percent. So really, the PBMs are making the bank here.

        Let's talk about PBMs for a second here. The real, the real
    culprit in this room, in this story. So, these three big parent
    companies, the three big PBMs control 80, 85 percent of the
    industry. Their gross revenue last year was $800 billion. Their
    parent companies' gross revenue, $800 billion.

        This Committee's worked so hard on PBM reform. We've not
    passed our delinking bill. And I would ask the Chairman to
    consider bringing the delinking bill back to the Committee, and
    let us mark it up as well. In that linking Bill, PBMs would
    receive a flat fee for their efforts as opposed to a percentage
    of the sale. So, we go to a flat fee model number, and there
    just can't possibly be enough transparency on this issue.

        I came to Congress to save Medicare. The people of Kansas
    sent me here to save Medicare. I cannot save Medicare without a
    miracle drug for Alzheimer's. We're spending, I think, way over
    $200 billion on Alzheimer's disease. So, if we thwart the
    innovation that this type of company does, it tells people to
    stop researching drugs that are going to solve Alzheimer's.

        Mr. Jørgensen, let's talk about research and
    development for a second. How many years have you been
    researching diabetes? And then eventually, probably decades
    ago, you started going down this Ozempic path, and how many
    other rabbit holes have you-all been down?

        Mr. Jorgensen. Yes, thank you, Senator, for the question.
    We have 100-year research effort in diabetes. And the past
    three decades we have been researching the GLP-1s in starting
    in diabetes, and then in obesity. And when we started the
    obesity research efforts, everybody thought it was a stupid
    idea----

        Senator Marshall. Sorry to get through this. So, you've
    spent three decades specifically on the GLP-1 model, and I'm
    sure that there was lots of molecules that didn't work out. And
    at the end of the day, you've spent in excess of $10 billion of
    research. And then how much money are you going to spend on
    research this year, approximately?

        Mr. Jorgensen. We are spending approximately 14 percent of
    our turnover on research.

        Senator Marshall. Okay. I want to make a quick point here,
    that companies like yours benefit from the Trump tax cut, the
    research and development dollars. The tax cut on that expired.
    Is that true that doing research in this country, you benefited
    from that tax cut?

        Mr. Jorgensen. We have no, say, funding support from the
    NIH whatsoever in our research efforts. We benefit from tax
    benefits in different situations.

        Senator Marshall. The R&D, I would write the R&D off over a
    year as opposed to 5 or 10 years, would be a significant--would
    prevent you from--or decrease your reinvestment opportunities.

        Mr. Jorgensen. Yes, perhaps. I don't know the specific data
    in terms of how much we benefited from it.

        Senator Marshall. The one thing I am disappointed in your
    company, all big pharma, is the marketing that they do. I think
    that the marketing is very influential. I really think that
    Congress needs to go back and revisit that as well. I think
    that the marketing is so good. There's people on this drug that
    shouldn't be on it and are being taken advantage of. And so, I
    do think we need to go back and look at that.

        Again, instead of coming after the hero of this story, we
    need to look in a mirror. America needs to look in a mirror.
    That nutrition is a big problem in this country and lack of
    activity. The Chairman, Ranking Member, all of us have worked
    on Community Health Center Fund, the center of funding. I think
    that's where the opportunities to work on the nutrition
    problems remains.

        It's frustrating to me that Congress can spend $1 trillion
    dollars on the military. Medicare can spend $1 trillion
    dollars, but we can't spend $3 billion on primary care, $3
    billion to address the primary care needs of this country,
    which I think would have a big impact on driving down the need
    for these types of expensive drugs.

        America, I said it for 20 years as a physician, that
    America suddenly wants to drive through healthcare, and we want
    to drive through a fast-food service that gives me gives
    medicine to fix our problem rather than addressing the real
    challenges before us, which is our nutrition in this country is
    horrible. So, I think that's something we need to continue to
    work on.

        The other thing we can still work on is bringing
    competition, promoting competition to you. We'll bring this
    price down. We've passed legislation, the President signed
    legislation that helps drive biosimilars and generics to market
    more efficiently. There's several in the hopper, so to speak,
    but still, the FDA remains very inefficient. Very inefficient.
    The FDA should focus on the safety of the drugs, and then let
    the physicians and the patient decide if they're right for
    them. And that type of a model will drive down that process by
    years.

        I'll just close, one more time, emphasizing that this
    Committee needs to demand that the leader bring our PBM reform
    to the floor, but we need to include that delinking bill. There
    are other opportunities to drive this price down. Again, Novo
    Nordick is not the villain in this story.

        Thank you. I yield back.

        The Chair. Thank you.

        Senator Hassan.

        Senator Hassan. Thanks, Mr. Chair, and to you and Senator
    Cassidy for this hearing. Mr. Jørgensen, this year, Novo
    Nordic abruptly discontinued the drug Levemir. And I know
    Senator Collins raised this with you, but I want to follow-up
    on it a bit. Levemir is a critical insulin product, and one of
    the few long-acting insulins approved for use during pregnancy.

        By discontinuing Levemir in January 2024, Novo Nordisk
    interrupted the diabetes care plans of millions of Americans
    with only a few weeks' notice. Will Novo Nordisk agree to
    provide any interested company with the necessary information
    and drug formulation to make Levemir?

        Mr. Jorgensen. Senator, thank you for the question. Any
    decision to take a product off the market is a very, very
    difficult decision. And I have to explain why we had to do
    that. We last year reduced the price for Levemir. We dropped
    the price yet to find that PBMs dropped access to Levemir. So
    much less patients have access to it.

        Senator Hassan. I understand that, but my question is, now
    that you're not making it and there are still patients who need
    it, will you provide necessary information and drug formulation
    to other pharmaceutical companies that decide they want to make
    it?

        Mr. Jorgensen. We have given a year's notice. More than the
    weeks you mentioned.

        Senator Hassan. Sir, my question is a direct one, please
    answer it or tell me you're not going to.

        Mr. Jorgensen. We have collaborated and followed-up with
    all those that were brought forward as potential manufacturers,
    but we have not found anyone interested in manufacturing it.
    And if there is a company interested in manufacturing it, or
    the government wants to manufacture it, we'll be happy to
    collaborate. The reality is that the market is disappearing for
    Levemir because of how it's contracted. And I don't make a
    decision like that and an easy decision.

        Senator Hassan. I understand. And have you worked actively
    to find a manufacturer to take on Levemir? It sounds like
    you've had some conversations, but are you continuing the
    outreach, because there are some patients who really need this
    medication?

        Mr. Jorgensen. Yes. The companies we know of have not shown
    interest. All the companies that have been mentioned as
    potential partners on this, we have discussed with and none
    have come forward as being interested.

        Senator Hassan. I will follow-up with you in writing to ask
    for specific steps that you'll continue to take over the next,
    let's say, 3 months to find a manufacturer for this drug.

        Senator Hassan. I'd like to move on, if I can, because in
    response to a question from Senator Lujan about your pricing of
    Ozempic and Wegovy, you said if you drop the price of these
    obesity drugs, PBMs would take them off their formularies. But
    here's what the PBMs say. Cigna, Express Scripts, the question
    they were asked is, if Novo Nordisk lowered the list price for
    Ozempic and Wegovy tomorrow, and the net cost stayed the same
    or went down, would your PBM limit access?

        Here's what Cigna Express Scripts said. ``No. If Novo
    Nordisk lowered their list price for Ozempic and Wegovy
    tomorrow to a price that was the same or lower than current net
    cost, that change by itself would not result in less favorable
    formulary placement. To support this claim, the company
    provided an example. It did not disfavor a competing weight
    loss product, Eli Lilly's Zepbound, even as it launched at a
    list price 20 percent lower than Wegovy.

        Here's what UnitedHealth Group, Optum RX, said. ``No.
    Assuming the net price remains the same or lower, lowering the
    medicine's list price would not lead to less favorable
    formulary placement by Optum Rx, particularly for high-demand
    drugs like Ozempic and Wegovy. To be clear, lower list prices
    and lower net prices support formulary placement and access''

        CVS Caremark said something similar. It said, ``This simple
    answer is no. In fact, we can point to recent history as a
    proof point when Novo Nordisk drastically reduced the price of
    their insulin NovoLog in 2023. It did not result in a less
    favorable formulary placement with Caremark.''

        They were also asked if Ozempic and Wegovy were available
    for $100 per month or less, what impact do you expect that it
    would have on coverage and access? Cigna Express says, ``If
    Novo Nordisk lowered the price for plan sponsors to $100 or
    less per patient per month, we would expect the vast majority
    of our clients to expand coverage and access to these products
    for diabetes and weight loss assuming clinical evidence
    continues to support efficacy and safety.''

        CVS said, ``Lower list prices would open up access for
    obesity treatment.'' In particular UnitedHealth Group Optum RX
    said, ``Given the significant price differential for these
    products across borders, a decision by Novo Nordisk to align
    U.S. pricing more closely with those in other countries would
    meaningfully increase access for U.S. patients.

        With that in mind, would you please commit to lowering the
    list price of these drugs?

        Mr. Jorgensen. Senator, allow me to share a few points
    before I answer your question----

        Senator Hassan. Yes.

        Mr. Jorgensen [continuing]. Is that Okay? So, the
    experience we have is one of losing access when we lower price.
    I know you can always find specific plans that did include
    insulin with a lower price, but the broad totality is that less
    patients have access to our medicines when we have lowered the
    price. I understand that perhaps the PBMs have changed their
    mind, and I'll be happy to collaborate with them on this
    because anything that helps patients to get access and
    affordability, we are supportive of.

        The rebates that were shown, before we hand those out,
    they're not in our books. So, if we can go through a de-linking
    model or any model where we do business based on net price,
    I'll be more than happy for that. But it's not how history has
    told us.

        Senator Hassan. Well, but you've now got these companies
    publicly committing to continuing access and increasing access
    if the list prices are lowered. So, I would strongly recommend
    that with these companies on the record, they represent a huge
    amount of the covered patient population in the United States,
    that you consider strongly lowering the list price.

        Lastly, I just want to note that one way of reducing drug
    prices is encouraging the entry of generic and biosimilar
    medications, which can provide lower cost options for patients.
    So, I will follow-up with you to, I hope, get a commitment that
    Novo Nordisk will not stand in the way of other companies
    coming up with lower cost versions of these drugs if the
    companies currently have them in development.

        Senator Hassan. Thank you, Mr. Chair.

        The Chair. Well, I just want to pick up on Senator Hassan's
    important point. We have in writing, and we will certainly
    share it with you, commitments from the three major PBMs that
    if you substantially lower your list price, they would not
    limit coverage.

        Now, what I'm hearing from you is that you are prepared, if
    an audit is prepared, to sit down and work with those three
    companies. I am prepared to negotiate that work with you. Do I
    get your commitment that you will sit down do with the three
    companies to make sure that they keep that commitment?

        Mr. Jorgensen. Yes. Anything that can help patients get
    access, I'm supportive of, and that also includes collaborating
    and negotiating with anyone who can help that.

        The Chair. All right. But picking up on Senator Hassan's
    point, if in fact they keep their commitment, are you then
    prepared to substantially lower the list prices in the United
    States?

        Mr. Jorgensen. I have to understand what this entails
    because when I hear statements that PBMs would accept a low
    list price product, it needs to go all the way to patients. So,
    it means that they talk about insurance companies being their
    clients, it's actually their owners. So, it needs to get to
    insurance schemes, and it needs to get to the patients
    because----

        The Chair. I am aware of that. But I'm asking you, again,
    will you work with this Committee and the PBMs?

        Mr. Jorgensen. Yes.

        The Chair. No. 2, if in fact they keep their word, I
    understand that it's complicated, will you in fact
    substantially lower list prices in this country?

        Mr. Jorgensen. If it works in a way where patients get
    access to a more affordable medicine, and we have certainty
    that it actually happens and not like when we load list price
    prior rounds around that less people got access to our
    medicines.

        The Chair. Right. I understand that. We will be positive
    toward that. We will be in touch with you and the PBMs to work
    on this. And I want to thank Senator Hassan for that line of
    questioning.

        Senator Cassidy.

        Senator Cassidy. I'll defer to Senator Romney.

        Senator Romney. My goodness. Senator Cassidy, thank you
    very much. Appreciate that.

        Mr. Chairman and Ranking Member, appreciate the chance to
    have this witness here. Appreciate your willingness to be here.
    I don't know whether it's voluntary or not, but given the
    nature of our hearing, so which are mostly opportunities for us
    to talk and you to listen. I appreciate your willingness to be
    here.

        I guess there were a couple of models that one could have
    for developing new drugs. One was the idea of a patent, which
    we'd say we want the private sector to invest massive amounts
    of money to developing new products, new innovations. And then
    if one works, to have a patent to allow you to charge whatever
    you want to recoup a return on investment and make potentially
    enormous profit. That's one model.

        The other model is to say, no, we, the government are going
    to develop drugs, and we're going to spend our money and keep
    the price down. Sometimes we live in a fantasy land, which is
    we want you to invest and the industry generally to invest
    massive amounts of money, but then we want you to keep the
    prices low. Like, that's fantasy land. That's not real. That's
    not reality.

        You, under our system, are able to charge whatever you
    believe the market will bear and get as big a profit as you
    could possibly get. I presume that's--you have taken--you're a
    fiduciary for your shareholders. You're trying to maximize your
    profit. Is that right?

        Mr. Jorgensen. Senator, I agree with you that I'm not aware
    of any government that has developed a product. So, it's
    typically done in the private sector. And that can only happen
    if there's patent protection. I don't think we set our price in
    a way where we just look at our shareholders because we have
    also an obligation to set a price that it's available and
    affordable for patients.

        Senator Romney. Yes. There's no question long-term. Your
    profit is going to be enhanced if people believe that you are
    good guys, not bad guys. And so, there are a number of
    considerations in considering what's the best return. But there
    are a number of folks that would like you to invest a lot, but
    then to limit what you can get back and somehow ascribe
    malevolent intent if you charge a high price. It's like that's
    the system we have. There are alternative systems which is, no,
    no, we're going to limit how much you can get back in.

        I look around the world, I don't recall a lot of drugs
    coming from China, and Russia, and North Korea, and Iran. We
    don't see a lot of innovation coming from there. But yes, I
    would love a setting where you invested massive money, but then
    you gave us the products cheap. I mean, that's just not
    reality. And I mean, I wish there were a way of that to happen,
    but I don't see how that happens.

        I very greatly appreciate the innovations that have been
    made by the industry. I do wonder what the reason is for the
    differences in price between what's available here in this
    country and what's available in some other countries. And I'm
    not now just talking about Wegovy and Ozempic. And I don't know
    the pricing differences to the extent they exist around the
    world, but we in this country often talk about how products are
    much cheaper in Canada, and the UK, and France, and Germany
    than they are here. Why is that? Why are we so out of line with
    the rest of the world in terms of the pricing that comes from
    the industry, not necessarily your own company, but the
    industry at large?

        Mr. Jorgensen. Yes. I think there are Senator a number of
    differences when if you, for instance, compare U.S. and
    European market. And if you look at all the innovation that's
    made, a lot of it is made in this country. So, the economic
    activity taking place here, all of those innovative products in
    80 percent, 85 percent of the cases get to the market in the
    U.S. It's only around 40 percent in Europe.

        In Europe, there's a sanction of healthcare. There's a
    rationing of who gets access. So, the latest innovations are
    not getting to my countrymen, but they are in most cases
    getting to the U.S. So, there's a different perspective in how
    you look at innovation. And when you look at the diseases we're
    talking about here, diabetes and obesity, these are very, very
    expensive diseases. And we talk about the cost of the medicine,
    but typically in these diseases, the cost of the medicine is
    less than 10 percent of the total disease burden.

        If you look at chronic kidney disease where we have shown
    in our data that for people living with type 2 diabetes and
    start using Ozempic, you reduce the risk of developing chronic
    kidney disease by 24 percent. And actually, a quarter of all
    Medicare costs goes to people living with kidney disease.

        Using innovation is a really big opportunity for driving
    down the cost of the U.S. healthcare system. And there is a
    general openness for that type of innovation in the U.S.
    market, which is not always the case in Europe. That comes with
    a cost, but it also leads to significant benefits for the
    individual Americans, but also for the healthcare system in
    saved cost for these chronic diseases.

        Senator Romney. I would anticipate that in European
    countries that don't have access to some of the lifesaving
    products that are available here, that there would be a huge
    hue and cry on the part of the public saying why can't we have
    these products? But those that are available in both places, I
    don't understand why the price should be different. If the
    French, and the Germans, and the Canadians honor our patents,
    would the companies not be free then to charge the same price
    there that they charge here? Why charge a lower price there
    than is charged here?

        Mr. Jorgensen. Senator, that's a great question. When we
    compare the prices, it's not unable to comparison. It's
    typically different prices that's being compared, and it's
    typically the list price in the U.S. And in the U.S., there's
    not one price, there are a number of different prices.

        When we sell our products in Medicaid, in VAs, we get a
    really, really low price. We even have support programs where
    we pay for the medicine for Americans. There are no other place
    where we give products away for free. That's only in the U.S.
    When I look at the government, what the government pays for our
    insulins, that is now less than what many governments pay in
    Europe. But that's typically lost in the whole translation and
    referencing to list pricing, which is not the price we get. So,
    unfortunately, as also the Chairman said at the opening, it is
    a very complex market and very complex healthcare system that
    creates a lot of misunderstandings.

        Senator Romney. Yes. I must admit, I agree. The complexity
    of our PBM system is such that it's very hard for us to figure
    out just exactly who's getting what and why. And I happen to
    believe that one of the reasons our healthcare cost is so
    expensive, particularly as it relates to pharmaceuticals, is
    the opaque nature of our pricing in this country. Thank you,
    Mr. Jørgensen.

        The Chair. Senator Hickenlooper.

        Senator Hickenlooper. Thank you, Mr. Chair. Thank you, Mr.
    Jørgensen, for taking the time and indulging us for all
    these questions. I think there's some unique histories in the
    United States in terms of government's ability to negotiate
    prices. We don't have to go into that now, but it is a part of
    it. Certainly, we're seeing PBMs come here and they point the
    finger in one direction, and the large pharmaceutical companies
    point their finger in the other direction. I think most
    Americans hear that as a hustle, as a rigged game. And they're
    pointing, get it out of here.

        You look at diabetes diagnoses, they're expected to rise
    considerably over the coming decades. By 2030, they're saying
    55 million Americans will have type 2 diabetes. We could see a
    nearly 700 percent rise in the number of young people with type
    2 diabetes in the next 40 years.

        Obviously, this is a miracle drug, and I think by any
    measure, we should recognize that right off the bat. And I
    think the point that the lower price--offering a lower price
    insulin made the axis of that specific drug Levemir, whichever
    one it was, decrease by almost more than half. That should be
    frightening. And at some point, we might want to figure out how
    to get the PBMs representatives and the pharmaceutical
    companies here together, and let both sides in an open
    discussion suggest solutions to this because it's not
    sustainable going forward.

        One point I want to make, we have a company in Colorado
    calledHealth that's leading the way to address some of the
    issues around weight management and long-term solutions to
    patients with type 2 diabetes. And in a recent study, they
    provide coaches and help people navigate what they're eating
    and when they exercise.

        found that patients with type 2 diabetes who stopped taking
    a GLP-1 and remained on a nutrient or a nutrition therapy
    program, did not regain weight after a year and had similar
    blood sugar control as those who are still on the drug.

        Now, obviously, many patients may have an aggressive form
    of obesity, the appetites that--I don't know, you can argue
    that the appetites in people have evolved over 90 percent of
    the time in our evolutionary history. We were hunters and
    gatherers. So that's a very hard thing for many people to
    control. But for those patients who can control it, a company
    like Virta Health can really provide benefits. Are you doing
    any studies to look at that as a kind of a combined therapy or
    an alternative therapy that people can move on to that's less
    expensive?

        Mr. Jorgensen. Yes. Thank you Senator. I think you raise a
    really good point that also alludes to that patients are
    different. We probably know of people who live with say, an
    aggressive form of obesity. And no matter what they do, they
    put on weight. And most likely, they'll have to be on really
    efficacious new innovations in the future to manage their
    weight.

        But we might also get to know of patient segments where
    after efficacious treatment and perhaps with a coaching
    solution, they can change lifestyle to a degree that the
    coaching motivates them to reinforce that. And they can do
    without medicine. It's still a bit early days. And I think we
    have to acknowledge that for long we have looked at people with
    obesity, and to some degree, type 2 diabetes as a self-
    inflicted condition.

        I think we should be careful about saying that if you just
    get a coach and get this digital report, you're taking care
    of--because then I think we are letting patients down in need
    of significant help. But I believe that there'll be a market
    for such a solution and it can coexist with our products, and
    it can also help take the burden off the healthcare system over
    time. So, we don't want to move people on medicines and keep
    them on medicines they do not need. But I also note that many
    Americans will need to have help, of course, for a long time.

        Senator Hickenlooper. I raised the question. I was
    specifically trying to make sure that there are different
    groups of people, and obviously, the notion that we everyone
    can control their appetites is ridiculous. And I think we have
    disadvantaged people that have differing genetic makeup and
    physiological character. We put them in unfair positions.

        Let me go off on a different direction and talk a little
    bit about sugar, and diabetes, and then some of the other
    issues that can arise. Roughly, almost three quarters of our
    food supply in the United States now is made of what we call
    ultra processed foods. Researchers have started studying the
    possible connection between these ultra processed foods with
    higher rates of diabetes and then also dementia later in life.

        Certainly, researchers are still working to understand the
    exact connection here. So, I'm not saying this is thought or
    has been consequentially defined, but there is evidence that
    diabetes can lead to higher rate of inflammation as well as
    damaged blood vessels, which could impact cognitive functioning
    as we age.

        Can you speak on research that Novo Nordisk has done on
    testing the effectiveness of GLP-1s or GLP-like pharmaceuticals
    in reducing the risk of dementia. As the company, have you guys
    got research on this connection that would be optimistic?

        Mr. Jorgensen. Yes. Thank you, Senator. You raise a really
    good point. And our GLP-1 medicine, Semaglutide, works in an
    anti-inflammatory way, which has tremendous benefits for
    patients. It not only lowers weight, but it also reduces risk
    of cardiovascular disease because of these anti-inflammatory
    properties.

        We are now also testing it out in Alzheimer's disease where
    we hope we can show in data, end of next year, that being on
    this medicine can bring benefit for people with Alzheimer's
    disease. So, this whole cardiometabolic disease state that is
    leading to a number of comorbidities is actually also a leading
    cause of number of cancers. We aspire to show in continued
    massive investments in R&D that we can document these benefits
    and have them FDA-approved.

        Senator Hickenlooper. Great. Thank you. And I'll just end
    with in terms of the whole tenor of the discussion that Henry
    Ford was famous for coming in and actually dramatically
    reducing his prices so as to dramatically increased volume and
    dramatically succeeded in a level that nobody really imagined.
    And I think you, with a miracle drug like this, you might have
    that same potential where actually lowering the price could
    dramatically change not only the success of the pharmaceutical,
    but also the success of the business.

        The Chair. Senator Cassidy.

        Senator Cassidy. Thank you, Mr. Jørgensen, thank you
    for being here. Mr. Jørgensen, you had mentioned that--
    just to clarify for the record, that Ozempic would be available
    with a patient assistant program, a PAP, if they were insured
    but they had a high deductible. You did not mention that for
    Wegovy. So, if a patient has a high deductible and or has a
    health savings account and they're taking Wegovy for obesity,
    is there a patient assistant program for them? Is there some
    other assistance for them to be able to afford?

        Mr. Jorgensen. Yes. So first to clarify what we have on
    Ozempic. If you have an income less than 400 percent of the
    national poverty line, you can qualify for free Ozempic if you
    have a high deductible plan. Unfortunately, when you're inside
    insurance, if you actually got, say, a product for free from
    Novo Nordisk, or you bought it at, say, a cash program, the
    insurance company would not count that against your deductible.
    So, it wouldn't help you.

        Senator Cassidy. Wait a second though. If I have a high
    deductible health plan with a health savings account and say
    the drug is whatever it is, $900, and I've got a deductible of
    $2,000--let me make sure I understand this one--that your
    patient assistant program would not assist them. And you're
    saying it's because our net price is whatever it is, $600,
    would be willing to make it more affordable, but that this
    would not--the patient would not benefit. I lost you there. I
    lost you there.

        Mr. Jorgensen. Yes. So, if you instead--so when you're in
    the deductible space, we have still given the rebate to the
    PBM, but it's not shared with the patient. And if you went out
    and bought, say, a lower price product, because we also have a
    cash program, that spend would not count against your
    deductible because you have to spend that within, say,
    insurance. So, it wouldn't help the patient. And that's a
    function of insurance scheme design. That's not something we
    control.

        Senator Cassidy. No, it actually would help the patient on
    the other hand, because she'd be paying much less, but now
    she's paying $900. But I think I'm hearing from you, in the
    contractual relationship that you have with the PBM, that
    actually seems to be what is first being considered is
    contractual relationship between your company and the PBM and
    not the bottom line for the patient. Because the bottom line
    for the patient, she's paying $900 instead of nothing. Is that
    a fair statement? So, let's assume that she has less than 400
    percent of Federal poverty. So, she's less than 400 percent of
    Federal poverty and she's got a high deductible plan and/or a
    high deductible HSA. So, she would not qualify for the patient
    assistant program.

        Mr. Jorgensen. She would not, but even if she did, she
    would still have the deductible.

        Senator Cassidy. I get that, but she would use that for
    another thing. She'd use that for an Urgent Care visit as
    opposed to the drug benefit.

        Mr. Jorgensen. Yes, that's true. We feel it's not
    appropriate to have deductible plans for patients living with
    chronic diseases that on an ongoing basis needs to have access
    to the healthcare. So, when they come to the beginning----

        Senator Cassidy. That was a value judgment on the basis of
    the company for the patient. I'll just say that because
    oftentimes those policies are otherwise more affordable. Let me
    ask, if the patient is uninsured, would she qualify for this
    less than 400 percent of Federal poverty being able to get the
    patient assistant program?

        Mr. Jorgensen. Yes, for the diabetes product. We have not
    yet established it for the obesity program. We have a cash
    offering at approximately half the price that patients can use.
    We feel that right now, where we are building, say, insurance
    coverage and also negotiating access to Medicaid, that's our
    focus. And that's where we're giving priority to now in terms
    of supporting patients.

        Senator Cassidy. Let me move on. One of the tensions here
    that I mentioned is innovation versus the ability to afford.
    And I just want to echo what Marshall and Romney said. The fact
    that you-all and others are doing research on the impact of
    these drugs to prevent Alzheimer's is fantastic. I mean, this
    could possibly be part of what makes Alzheimer's less of a
    scourge. And that takes money.

        When someone says they can produce it for $5, but they're
    not going to produce the $30 billion-worth of research, that
    would find another indication for how we go forward. So, I
    think we need to acknowledge there is that, but it is my
    impression that the United States is paying for this research
    and that the other countries are not.

        I'm sure that Chairman Sanders asked, if you're making
    money in Germany, of course you're making money in Germany,
    you're making money on the margin. But I don't think I--it's my
    impression, if you will, that it's not the Germans who are
    paying for the ongoing research as to another indication.

        Now, I say that you don't have to respond to it, but I'm
    going to surmise that to be the case. The Trump administration
    proposed international reference pricing in which you took a
    market basket of developed countries; Germany, Japan, Great
    Britain, whomever, and you put them as a market basket. And the
    U.S. would pay some multiple. Now, from my mind, that would
    force your company and others to go back to the Europeans and
    say, wait a second, no longer is the United States going to pay
    full freight for the research. You also have to contribute.
    They may pay a little bit more, but nonetheless, you have to
    pay a little bit more.

        What thoughts do you have about the international reference
    pricing that was proposed by the Trump administration?

        Mr. Jorgensen. Senator, thanks for bringing that up. I
    think, again, we need to really get into what is then the price
    we're talking about, because if you----

        Senator Cassidy. Okay. Now, I will accept that you have to
    design it correctly, but I'm asking more about the concept.
    Frankly, I think the Trump administration had kind of a--there
    were some flaws with it, but if you could address those flaws,
    what about the concept that there should be a market basket,
    and if the U.S. is not going to pay for all of the R&D, maybe
    more, but not all, and that in effect, this may force the
    companies to negotiate a little bit harder with the Europeans.
    Conceptually, what do you think about that?

        Mr. Jorgensen. I think it should be fair in who pays for
    innovation. I mentioned also before that a significant of the
    innovation never is launched in Europe. So, a number of the
    breakthrough therapies only make it to Americans. So, Americans
    benefit from the----

        Senator Cassidy. I accept that. But I'm going to come back
    to the concept. Let's assume that we could imagine a way in
    which some of the flaws of the previous proposal were
    addressed. What about the concept of yes, there'll be a market
    basket of developed countries that typically are paying full
    freight. It wouldn't be the PEPFAR Program in Africa paying
    pennies on the dollar, and that the U.S. would pay some
    multiple, but it would be a lower multiple than we're currently
    paying.

        Mr. Jorgensen. We'll be happy to look at that. I think
    we'll find that the perceived multiple is much lower than we
    actually think. I just mentioned the example of insulin. Today,
    the U.S. Government pays less for insulin than typical European
    governments. Yet, we talk about insulin being more expensive in
    the U.S. than it is in Europe. That's not the case for the
    manufacturer. So, we need to decompose the complexity to get to
    what is the real price, and I'll be happy to contribute to----

        Senator Cassidy. I accept that. I also want to point out.
    There's been a lot of faith being placed in PBM saying that
    they would pass through a lower price. But I do want to point
    out on the 20th, The Washington Post had an article speaking
    about how the Federal Trade Commission has indicted the three
    largest PBMs for manipulating the price of insulin.

        One of them said rebates is our sweet drink, or something
    like that. And so, I'm hoping that they would be sincere on
    that. But I will note, and by the way, they dispute that--PBMs
    are disputing this, but there was this file by the FTC and with
    the Chairman's permission, I'll submit that for the record.

        The Chair. No objection.

        [The following information can be found on page 165 in
    Additional Material:]

        Senator Cassidy. Then, my last question before I move on,
    before I kind of let others go is--I'll stop there. I may have
    a second round, but I'll stop there.

        The Chair. Senator Kaine.

        Senator Kaine. Thank you, Mr. Chair. And I want to pick up
    right there. I am very proud of the work that this Committee
    and Congress has done on the prescription drug pricing issues,
    the Inflation Reduction Act, capping insulin, capping and then
    progressively reducing out-of-pocket costs for folks under
    Medicare Part D. Negotiated pricing, supported all of those
    things.

        The great thing about the IRA, it passed by one vote. So,
    I'd tell everybody I was the deciding vote on all of these
    matters. We were all the deciding vote, all of us who voted
    yes. And some of those provisions weren't loved by the
    pharmaceutical companies, but I've voted for them and I'm proud
    of them.

        But I have come to conclude along with a number of my
    colleagues that the focus on pharmaceutical companies is
    something I support. We're letting PBMs get away scot-free. One
    industry researches, one doesn't. One industry produces
    lifesaving treatments, one doesn't. One industry is super-duper
    profitable and another one profitable.

        The one that's the super-duper profitable is the one that's
    not doing any research and not producing any lifesaving
    innovations. One industry is under fairly intense scrutiny by
    this Committee in Congress and one isn't. And it's the one
    that's the super-duper profitable one that is not researching
    and not producing products that is getting away scot-free.

        In May 2023, we passed a great bill out of this Committee.
    I think it was actually four bills. And if I remember by
    memory, I think the votes were; 18 to 3, 18 to 3, 19 to 2, and
    20 to 1. Overwhelming bipartisan bills, finally to regulate
    PBMs. And I'm disappointed that those bills haven't gone
    anywhere.

        I turn on my TV, and I see the PBMs running all kinds of
    ads against Congress, telling Congress not to vote for this
    scary PBM reform bill. If we're going to bring prescription
    drug prices down even more, we shouldn't let up on having Mr.
    Jørgensen and other CEOs here and pressing them. But we
    got to get serious about the PBM reform piece of it.

        Mr. Jørgensen, you were here, I'm just going to go
    into this. You were here in May 2023, and I asked you a
    question about the connection between list price and formulary
    placement. And I will say, Chairman Sanders, this was the
    single best hearing I've attended in 12 years in the Senate.
    The hearing where you had both the PBMs and the pharmacy CEOs
    together. Because you're familiar with the phenomenon and
    everybody blames the party that's not in the room. We had them
    all at the same table.

        You and your two CEO colleagues testified that PBMs prefer
    the drug with a higher list price, and it's difficult, if not
    impossible, to get a formulary placement for a drug with a
    lower list price. And that's because they often make a profit
    on the discount or rebate, they can negotiate off a list price.
    And this perverse incentive artificially keeps drug prices too
    high.

        Then I followed up and asked this question to the PBM
    witnesses, and I asked about this, and as you might expect,
    they were not direct in their answer. I asked one witness, ``So
    you do not have any fee structure in your company where you
    collect a fee based on the percentage of the list price.'' The
    response I received after a long pause, ``We certainly may have
    a few in our client base.'' Everybody in the room knew that
    answer was a complete dodge. And that was over a year ago.

        Senators Marshall, Tester, and I had been working for over
    a year on a bill that would address this issue. The DRUG Act
    would delink the list price of a drug from PBM profits in favor
    of a flat fee. We had hoped that might have been included in
    the markup this Thursday. I'm sorry that it won't be, but we're
    going to continue to make it happen.

        Color me skeptical that an industry that is now giving us
    pie in the sky statements about what they're willing to do, but
    that's all, that's also buying advertisements on TV trying to
    attack Congress for doing PBM reform, color me skeptical that
    they're going to come to the table and suddenly have a
    conversion experience, and start doing the right thing.

        But I guess one evidence of whether they're doing the right
    thing is since you were here in May 2023, have PBMs changed
    their practices, or are they continuing to favor higher price
    drugs on the formulary and make it difficult to put lower price
    drugs on the formulary?

        Mr. Jorgensen. Thank you, Senator for the question. We have
    not seen a wide uptake of the insulins where we lower the
    price. They can always find special formularies where, where
    they're present, but we have reduced access to those insulins
    compared to other insulins. So, like you, I'm also a bit
    skeptical, but I'm willing to explore the opportunity of what
    we can do together all of us to benefit patients living with
    these diseases.

        Senator Kaine. I mean, as a general matter, you might think
    if the PBM saw the HELP Committee vote a bill out to the floor
    that was going to put some significant regulation on it by an
    overwhelming bipartisan margin, they would think, man, maybe we
    better improve a little bit. I've seen no evidence of
    improvement. I see ads on TV attacking Congress and telling
    them not to do PBM reform. So, I want to get the balance right
    here. I'm going to continue to vote with this Committee to
    focus on pharmaceutical companies and bring down prices. And if
    the pharmaceutical companies don't want to negotiate for
    prescription drug pricing under Medicare, I stand with those
    who think negotiation is a good idea.

        But we're letting a huge part of this problem that afflicts
    the everyday American who's trying to afford prescription
    drugs. We're letting them go scot-free, and we've got a good
    bill on the floor right now that I think with some improvement
    could do a great job. And, I hope we'll take it up, and I hope
    we'll devote the same attention and focus to the PBMs as we do
    to the pharma companies.

        With that, Mr. Chair, I yield back.

        The Chair. Senator Braun.

        Senator Braun. Thank you, Mr. Chairman. We've had so many
    discussions like this, and I wish I had a big something to hold
    up, but I want to just talk about this. It has nothing to do
    with pharma. It happens, it has everything to do with a system
    that's broken with no transparency, no competition, barriers to
    entry, and by the way, a consumer who doesn't have the tools to
    really measure what the best value is.

        This is a case in California that impacted a sophisticated,
    self-insured plan and it had a psychiatric underpinning to it.
    But how that could ever end up being $4 million, that's what
    the company paid for that case. A self-insured company that's
    going to be a lot more sophisticated than any individual would
    be. Cigna, the insurance company, got $2.5 million of what the
    company paid.

        Another multiplan, TPA, got about $700,000. The provider
    that actually provided the service, in other words, to affect
    the cure or the remedy, got $875,000. They are suing the
    insurance company because they think they didn't get paid
    enough. And who got screwed was the company and the patient
    when it was a $4 million claim. And the provider that provided
    all the services charged only 875 and they made a profit.

        That means the claim was probably 10 times the amount of
    the underlying cost of the service. That's one side of
    healthcare. Hospitals used to be about one-third of the
    healthcare dollar. Practitioners, nurses, and doctors, maybe
    independent pharmacists, throw them in there, at about one-
    third. And then pharma and insurance splitting the other third.
    So, the whole thing has gotten convoluted.

        Then we're talking today about your industry and I come
    from the world of distribution. And in any other industry,
    there's full transparency, competition. The consumer drives the
    dynamic. That's why you don't get by with all the stuff we're
    talking about. Your business is largely one of heavy fixed
    cost. Is that correct?

        Mr. Jorgensen. Yes, that's correct. And research.

        Senator Braun. Yes, which that'd be part of it. Research.
    What are your variable costs, generally, on a drug like this as
    a percentage of your--whatever you're selling it for?

        Mr. Jorgensen. That's perhaps 20 percent.

        Senator Braun. It's very low. Are you making a profit on
    your Ozempic product when you're selling it to Australia for
    $87 and you're selling it to the U.S. for 936? Are you making a
    profit at $87?

        Mr. Jorgensen. Yes, we are. And the price you mentioned in
    the U.S. is not what we get. That's the list price.

        Senator Braun. What are you getting in the U.S.? What
    price?

        Mr. Jorgensen. I mentioned that on the average for our
    products, we give 74 percent in rebates to PBMs----

        Senator Braun. That was a chart that Senator Marshall----

        Mr. Jorgensen. Yes.

        Senator Braun [continuing]. Held up that PBMs are making 74
    percent and you're getting 26. So, you've got a screwed-up
    industry, No. 1. When I've talked to other pharma folks, they
    regret that PBMs ever came into it. It would seem like since
    you make the product that you could disassemble them or do
    something that would go around it, if in fact this place won't
    do something about it. Have you ever thought of that?

        Mr. Jorgensen. It's very difficult, Senator, because they
    control what insurance is put in front of patients. So, they
    have integrated themselves with insurance companies. And we
    negotiate against the PBMs, but they're owned by the insurance
    companies. So, no matter what we do, they decide what products
    patients----

        Senator Braun. Okay. And I think we--that's kind of the
    conundrum, but you're making a profit at $87. And of the $936,
    it would be the list price, is that total being split between
    you and the PBM? I know you give big discounts to the PBM. Why
    do you give them such large discounts for them to make that
    much money?

        Mr. Jorgensen. On this, we have a high list price and give
    them rebates. We are not making it, the insurance formulary.
    So, they make a fee based on the list price. So, you mentioned
    distribution. They don't get a flat fee for the distribution
    they give.

        Senator Braun. After you give the discounts and you do
    everything, what is your revenue on Ozempic, roughly?

        Mr. Jorgensen. I don't have that number from the top of my
    head. So, on every----

        Senator Braun. That'd be something I think it ought to be
    on the top of your head because most of us would want to see
    that so you can make the case against PBMs. And that basic lack
    of transparency, that to me comes from the top, the cloaks, the
    system in general is what is impacting the future of why in our
    own Country it's 18 percent of our GDP. And from Canada to
    Europe, it's 10 to 12 percent of our GDP. Eastern Europe is 6
    to 7 percent.

        Yes, rationing is maybe going to be one of the results, but
    it should never be to where something's going to cost that much
    more here versus there when you're making a profit on it. And
    until you figure that out, everyone's going to think your
    industry's screwed up.

        Mr. Jorgensen. I'm not sure if it was a question, but I
    just want to say that since we launched a product like Ozempic
    in 2018, the price we get has gone down by 40 percent. So,
    there's a----

        Senator Braun. That's good. And it looks like Lilly has got
    something similar.

        Mr. Jorgensen. Yes.

        Senator Braun. They sense competition, and theirs is gone
    down by 40 to 50 percent. And that's what we need more of. And
    until you put it out there, expose the PBMs in terms of what
    they're getting, and you get consumers engaged in it, you're
    not going to solve the problem. You're going to end up having
    government as your business partner because when you operate
    like an unregulated utility, you're going to get government
    regulating you. And I think there's a strong interest in that
    happening.

        Unless you, hospitals, insurance take the bull by the
    horns, you're going to increasingly be in more conversations
    like this. And I want to end on this. So why should the
    Europeans and everyone else be taking advantage of the fact
    that we do the R&D? Why don't you charge them more to where
    there's at least not a 10 to 1 differential to where you share
    the costs across the world, not put it on the burden of a
    place. It's now borrowing 30 cents on every dollar for
    whatever's provided through government and to where you're,
    you're jabbing it through the private insurance side.

        Now, why is there that kind of difference? Why don't you
    charge them more in Europe?

        Mr. Jorgensen. Senator, we might also do that in the
    future, but actually the price differential you mentioned is
    not the real price differential. I think that's part of the
    problem that we are not in charging as much in the U.S. as
    you----

        Senator Braun. I think you're hiding behind your opaqueness
    and you need to promote transparency for your own good. It'd be
    easier to understand. Thank you, Mr. Chairman.

        The Chair. Thank you, Senator Braun, and thank you Mr.
    Jørgensen. Let me just make a few remarks. Senator Braun,
    and I come from different perspectives, but occasionally we
    agree that the system is broken. Senator Braun said, ``the
    industry is screwed up.'' Is that the right quote? I don't
    agree that it's screwed up. It's enormously profitable as a
    company that makes huge profits. Top 10 pharmaceutical
    companies made up $100 billion dollars in profit last--it's not
    screwed up. They're making huge amounts of money.

        I think Mr. Jørgensen, you are not quite correct when
    you talk about 79 percent rebates on Ozempic and Wegovy. That
    may be, in general. My understanding, it's a 40 percent rebate.
    I believe, I have heard that in fact the product that after all
    of the rebates from the PBMs, it's your product is about, for
    Ozempic, about $600.

        Mr. Jorgensen. Can I clarify that please? So, our price has
    gone down by 40 percent since launch and already when we
    launched it, there was a significant rebate. So, the rebate has
    gone up by 40 percent since launch on top of launch rebate.

        The Chair. All right. My understanding is that factoring
    in, and we all agree, it is a complicated and broken system. I
    would point out, and you correct me if I'm wrong, Mr.
    Jørgensen, that in your beautiful country, Denmark,
    anybody can walk into a doctor's office, go to the hospital.
    How much do they pay out-of-pocket?

        Mr. Jorgensen. In Denmark, we have a healthcare system that
    is tax paid.

        The Chair. Yes. How much does an individual pay out of--if
    I'm in the hospital 2 weeks in Denmark, how much do I pay out
    of pocket.

        Mr. Jorgensen. To go to the hospital?

        The Chair. Yes.

        Mr. Jorgensen. Zero.

        The Chair. Zero. You go to any doctor, zero. And you are
    spending a little bit more than half as much per capita as we
    are. So, they provide quality care for all of your people and
    almost half of what we do. All right? That's a simple system
    that my mind makes sense. We have a complicated system not only
    in healthcare but in prescription drugs as well.

        But the point that I want to make is that factoring in all
    of the rebates, we heard a lot about rebates, I agree with much
    of the criticism factoring in 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 estimated
    net price of Wegovy is over $800, nearly four and a half times
    as much as it costs in Denmark.

        I know Senator Romney and others said, well, how is that?
    So why is it so much less expensive in Europe? And the answer
    is obvious. In the United States of America, we are the only
    major country on Earth that does not, has not negotiated
    prices. So, you can charge us any price that you want. Other
    drug companies can charge us any price that they want, as much
    as the market will bare. And that's what you do.

        Understandably, you charge us far more than other countries
    because they negotiate and regulate prices. Now, the good news,
    and I share the concerns and the skepticism about PBMs, but we
    have, as I've mentioned to you, and we'll share with you
    statements from the three major PBMs, that they would not
    penalize Novo Nordisk in terms of formula placement if you
    substantially lowered list prices. And I look forward to
    sitting down with you, your representatives, and the three PBMs
    to make sure that happens. Senator Cassidy, your closing
    remarks?

        Senator Cassidy. Yes. Mr. Jørgensen, again, thank you
    for coming here. I'm sure it's like getting your eye and teeth
    pulled. We spoke though about those patients who have high
    deductible plans or health savings accounts, and often they
    have them because that is what is affordable and works best for
    them. And it's been my concern that it seems as if the system
    has been set up to drain those in order to subsidize other
    actors within the system, knowing that your current
    negotiations with PBMs offer no relief for them.

        I would say that if we are truly concerned about people who
    are trying to purchase insurance, trying to do the best thing
    for their family, and then they have a system which manipulates
    that process to drain their savings in order to pay for a drug
    as great as your drug is, that's wrong.

        If you look demographically, the people who have the
    greatest incidence of a high BMI, of obesity, are going to be
    folks who are probably the lowest two to three quintiles of the
    American population. Those who might be more likely to have
    that high deductible policy because that is what's more
    affordable to them.

        There's just kind of this train wreck of those who are
    trying to do the right thing by their family, by their own
    health, are the ones who have no allowance made for them in
    these negotiations between pharma and between PBMs, that is
    separate from being the profits, which I thoroughly agree to
    drive innovation. Because I'm all about that innovation, but
    I'm all about that family. So, as you-all go forward on that,
    that would be something I think would relieve tension between
    policymakers and companies such as yours and the PBMs if more
    consideration were given to them. With that, I close.

        The Chair. Thank you, Senator Cassidy. That is the end of
    our hearing today. I want to thank Mr. Jørgensen for his
    participation. For any Senators who wish to ask additional
    questions, questions for the record will be due in 10 business
    days, Tuesday, October 8th at 5 p.m.

        The Chair. I ask a unanimous consent to enter the record 10
    statements from patients, doctors, and others concerned about
    the high cost of Ozempic and Wegovy.

        [The following information can be found on page 167 in
    Additional Material:]

        The Chair. The Committee stands adjourned.

                              ADDITIONAL MATERIAL
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        [Whereupon, at 12:18 p.m., the hearing was adjourned.]

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