Is Biden celebrating Novo Nordisk?
The Biden administration has determined that the Medicare health insurance program will cover Wegovy, Novo Nordisk's diabetes drug, for people at risk of heart attack and stroke. Another success for the Danish laboratory which however has to deal with its production capabilities. Facts, numbers and comments
The success of the Danish laboratory Novo Nordisk, which has become known for its anti-diabetes drugs Ozempic and Wegovy, seems unstoppable. After overtaking Tesla on the stock market and achieving better results than big names such as Pfizer and Moderna, it is now also receiving a big gift from the Biden administration, which has established that Medicare will cover Wegovy.
The relief, however, will only concern patients who are prescribed the drug for heart problems and not for weight loss.
MEDICARE WILL COVER WEGOVY (BUT UNDER SOME CONDITIONS)
The agency that oversees Medicare – the American health insurance program that covers about 65 million people over 65 or disabled – said yesterday that it will begin covering Novo Nordisk's Wegovy to insured heart patients as long as it is prescribed to reduce the risk of heart attack and stroke. In fact, a recent study has shown that the drug reduces these risks by 20% in overweight or obese adults who do not suffer from diabetes.
Although Wegovy has also shown results with weight loss – so much so that it has gotten out of hand for some (see Elon Musk) – Medicare prescription plans run by private insurers, known as Part D, currently cannot cover the drugs for obesity.
An aspect for which Novo Nordisk, despite welcoming the decision, has made it known that "further work is needed" so that the program also includes people who need weight management care.
THE PRICES QUESTION
Medicare's coverage of Wegovy, Reuters notes , opens the drug up to government price negotiations under Biden's Inflation Reduction Act (IRA).
For now, the Centers for Medicare and Medicaid Services (CMS) said that “negotiated prices will apply to drugs that share the same active ingredient rather than specific brands.”
Last year, the news agency recalls, Novo Nordisk told analysts it expects Medicare to negotiate the price to pay for Ozempic (already covered by Medicare), which has the same active ingredient as Wegovy, semaglutide , and will publish new prices for drugs in 2027. Now it is expected that Wegovy will also be involved in the negotiations.
WILL NOVO NORDISK BE ABLE TO KEEP UP?
However, the high demand for Wegovy has put Novo Nordisk in difficulty, which has been limiting initial doses since May 2023 to ensure a sufficient supply for patients already taking the drug. To address the shortage, it then announced the purchase of three plants from major shareholder Novo Holdings for $11 billion.
This, according to the laboratory, will increase the company's production capacity starting from 2026. At the moment, however, neither Novo Nordisk nor Eli Lilly with its Zepbound are able to keep up with the surprising demand, which according to analysts' forecasts could reach at least $100 billion per year by the end of the decade.
MEDICARE WILL LIKELY SAVE THE USA FROM OBESITY
But while Novo Nordisk dreams big and hopes that Medicare will also cover weight loss drugs – currently in the same category as treatments for baldness and erectile dysfunction, Bloomberg points out -, experts say they are skeptical about it.
They consider this “unlikely” because as a Congressional Budget Office analyst stated , “covering them at current prices would cost US health programs more than the savings achieved through drug benefits.”
Meanwhile, however, data released last September by the US Centers for Disease Control and Prevention (CDC) show that obesity is increasingly widespread in a growing number of states. In fact, if ten years ago no state had a prevalence of obesity in adults equal to or greater than 35%, in 2022 there were 22.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/biden-fa-festeggiare-novo-nordisk/ on Sun, 24 Mar 2024 14:52:49 +0000.