The injectable weight loss drug Wegovy (photo by Scott Olson of Getty Images).
An imposing one 1 in 8 US adults have taken GLP-1 drugs such as Wegovy and Ozempic for weight loss and related conditions. Their popularity and effectiveness have sparked a prescription frenzy in recent years, leaving both drugs in FDA Drug Shortage List from May 2023.
But even when supply recovers, access to these drugs will remain out of reach for the majority of Americans. That’s because brand-name GLP-1 drugs range from $11,000 to $16,000 a year, prices that are out of reach for most people.
Efforts to control prices through legislation face significant obstacles, both in the divided chambers of Congress and in the courts, where determined legal challengers await. Sen. Bernie Sanders, chairman of the Senate Health Committee, hopes that pressure in the upcoming hearings will force Novo Nordisk, maker of Wegovy and Ozempic, to lower prices voluntarily. History shows that pharmaceutical companies rarely bend prices, even in the face of public scrutiny.
Fortunately, Congress can implement a simple solution to make these drugs affordable, thereby improving the nation’s economic and physical health. Before explaining the solution, we must first understand the fight against obesity in this country and the urgent need for an effective, affordable weight loss drug.
Framing the obesity epidemic
About 42% of American adults are obese, which puts them at dramatically increased risk for a host of complications: diabetes, heart disease, kidney failure, leg amputation, cancer, and serious musculoskeletal problems. The economic impact of obesity is staggering, with associated health care costs estimated at $260 billion annually.
For decades, health experts have urged Americans to exercise more, eat better and improve lifestyles, while urging lawmakers to regulate food and address the “social determinants of health” that lead to excess weight gain. Taxpayers currently spend billions on government-sponsored nutrition and exercise campaigns, school interventions and public nutrition programs. That’s on top of America’s $190 billion nutrition industry, which includes everything from weight loss apps to vitamins and supplements. Despite these extensive efforts and expenditures, obesity rates continue to rise and so do the associated consequences, contributing to so many 500,000 preventable deaths every year.
The Outsized Promise Of GLP-1 Drugs
Studies show that all GLP-1 drugs lead to significant weight loss, averaging 15% of a user’s body mass. And when obese people combine regular exercise with semaglutide, the active ingredient in Wegovy, lost an average of 34 kg.
Beyond weight loss, GLP-1 drugs have been shown to reduce the incidence of diabetes and cardiovascular eventspreventing kidney failure and potentially improving cognitive function in Alzheimer’s patients.
It is important to note that GLP-1 drugs have mild to moderate side effects. It’s not a silver bullet. But combined with lifestyle medicine programs, these drugs would greatly improve national health—if they were affordable. However, the high prices of weight loss drugs are forcing insurers and employer-sponsored plans to limit coverage, leaving many unable to access these beneficial solutions.
The current financial burden
The cost of providing GLP-1 drugs to 100% of obese Americans would be exceed $1 trillion a year, even with drug discounts. For perspective, that’s more than twice what Americans spend on all prescription drugs annually. Moreover, this number is dwarfs Projected savings of $260 billion obesity had been eliminated.
And because patients who stop taking the drug regain two-thirds of the weight they’ve lost on average, this annual net cost of trillions of dollars will be maintained indefinitely. From the perspective of the US health care system, this continued spending (estimated annual growth in total health care spending is 25%) would strain funding for other vital elements of care, including hospitals and clinicians. It would also drive premiums and out-of-pocket costs.
Understanding excessive pricing
ONE recent report from Sen. Sanders’ office highlighted the stark disparity in global pricing for GLP-1 drugs: Americans pay more than $1,300 for a 28-day supply of Wegovy, while patients pay much less in countries like Denmark ($186), the Germany ($137) and the United Kingdom ($92).
This is because almost all national governments, except the US, negotiate the price of prescription drugs, rather than allowing drug companies to charge what they think is best for their shareholders.
Responding to criticism of expensive GLP-1 drugs, Novo Nordisk says prices reflect significant R&D investment, and that they are already 40% off with discounts. To date, however, the company has not explained why Americans should bear nearly the entire financial burden or provided details of actual R&D spending. This lack of transparency raises questions about Novo Nordisk’s justifications.
The hidden truth
Contrary to what one might assume, these drugs are not expensive to produce. According to a research team that included scientists from Yale and Harvard, semaglutide can be made to less than $5 a month.
In May 2024, telehealth company Hims & Hers began selling one compound version (created by the pharmacist). of the GLP-1 drug semaglutide for $199 a month, about 85% less than the brand names Wegovy and Ozempic. This reflects a profitable, but more affordable price.
Novo Nordisk, pricing its GLP-1 drugs at five to seven times that amount, produced $18 billion in sales last year. With patent protection, these exorbitant profits will continue for at least another decade unless Congress acts.
Hims & Hers are able to sell their version of these patented weight loss drugs because Congress has authorized the compounding and sale of a patented drug when there is a drug shortage determined by the FDA. However, once the GLP-1 shortage is resolved, companies like Hims & Hers will have to stop production. This will jeopardize the health of current users and save many more Americans who are still struggling to lose weight.
A creative solution for FDA and Congress
A quick fix to address the unaffordable cost of these life-saving weight loss drugs would be for Congress to amend the Food, Drug, and Cosmetic Act and expand the FDA’s definition of “drug shortage.” While “shortage” currently refers only to inadequate supply, a more modern definition would include drugs that are unaffordable and therefore out of reach for millions of people.
This expanded definition would allow compounded versions to remain available at an affordable price, even as weight-loss drug manufacturers ramp up production. Once market competition brings the price of these drugs below $200 a month (as is the case in other nations), the compounding ban could be reinstated.
The reason manufacturers like Novo Nordisk price their GLP-1 drugs at $10,000 to $16,000 per year has nothing to do with R&D costs, overhead or manufacturing costs. The reason is simple: greed.
Such pricing strategies may be tolerable in other industries, but when the health of tens of millions of Americans is at risk, Congress has an obligation to act. Expanding the definition of “deficiency” will break the monopoly control of current manufacturers, improve public health, save lives, and incentivize GLP-1 manufacturers to lower prices. The time for legislative action is now.
