Ozempic and Wegovy Don’t Cost What You Think They Do

Drug companies are making billions from a new class of in-demand weight-loss treatments. But the prices are not what they seem

By Gina Kolata of The NY Times. Excerpts:

"A recent paper published by the American Enterprise Institute revealed that the net prices for the new obesity drugs are just a fraction of the published annual list prices.

And while the drugs’ prices remain out of reach for many, economists anticipate they will soon be driven down. More than a dozen companies are developing obesity drugs. As they enter the market, greater choice is expected to make prices plummet, as has happened with other expensive drugs.

“My prediction is that as competition increases, prices will decrease accordingly,” said Jalpa Doshi, professor of medicine and director of the economics evaluation unit at the University of Pennsylvania."

"Wegovy’s net price is about half of its list price, Ozempic’s is nearly two-thirds lower and Mounjaro’s net price is nearly 80 percent lower than its list price."

"even Wegovy, which so far has the market for the new obesity drugs to itself, has an unexpectedly low net price, Amitabh Chandra, a health care economist at Harvard, said.

“One might have naïvely thought that these are new medicines that are in great demand, so rebates would be small to nil,” Dr. Chandra said.

“I was shocked,” he said, “by the extent of the rebates.”"

"Competition may lead to lower prices.

That happened, for example, with drugs for hepatitis C. An effective cure for the liver disease initially cost as much as $84,000, leading to dire warnings that the cost would be comparable to “total spending in the United States on all drugs.”

The list price of the hepatitis C treatment plunged, as competitors entered the market. Pharmacy benefit managers, which negotiate with drug makers, had more leverage as companies competed. Net prices fell accordingly."