Drugmakers Hike Prices On Over 700 Drugs, Including Ozempic

Drugmakers Hike Prices On Over 700 Drugs, Including Ozempic

Pharmaceutical companies have boosted prices for over 700 medications, including the popular Ozempic and Mounjaro drugs that treat type 2 diabetes but are also used off-label for weight loss, according to a new report on drug pricing.

An analysis by 46brooklyn Research, an Ohio-based nonprofit analytics firm, found the average increase for all brand-name drugs was about 4.5 percent, with some prices rising nearly 10 percent.

Drug manufacturers typically increase their prices at the beginning of the year. While medication costs rose at the start of 2024, the increase was at a slightly slower pace compared with the past five years when drug prices rose about 5 percent each year on average, 46brooklyn’s analysis showed.

Of note in 2024 were the price increases for Ozempic and Mounjaro. Both of these anti-diabetes drugs have become widely popular in recent years for helping people lose weight. Ozempic and Mounjaro belong to a class of medications called GLP-1 agonists and help regulate blood sugar.

The U.S. Food and Drug Administration (FDA) has not approved Ozempic for weight loss. However, the federal agency approved tirzepatide, the active ingredient in Mounjaro, as a weight loss management drug to treat people with obesity. The wide use of these drugs for diabetes and weight loss has led to a supply shortage.

Ozempic, manufactured by Novo Nordisk, rose 3.5 percent to $984.29 for a four-week supply, while Mounjaro, manufactured by Eli Lilly, rose 4.5 percent to about $1,000 for a month’s supply, the 46brooklyn data shows.
Besides Ozempic and Mounjaro, other drugs that saw price increases, according to the 46brooklyn report, included:

  • Enbrel, a medication that treats autoimmune disease, increased by 5 percent.
  • Oxycontin, a pain medication, rose 9 percent.
  • Plavix, a blood thinner, rose 4.7 percent.
  • Wellbutrin, an antidepressant, rose 9.9 percent.

What a patient ultimately pays for prescription medication may be different than what is listed in 46brooklyn’s report. The organization’s analysis is based on the wholesale acquisition cost, which is the price that drugmakers charge to wholesalers that distribute the drugs to pharmacies. Patients may be able to pay less if their insurance covers it, or they may get rebates or other discounts.

Novo Nordisk said on its website that its list price does not represent what most people pay out of pocket. As the manufacturer, Novo Nordisk said it negotiates with companies that actually pay for the medicines to ensure that their drugs stay on their “formulary,” or preferred drug list. These companies then work with health insurance companies to set prices and co-pay amounts.

Just as there were price hikes, the report also mentioned price cuts in some medications, such as:

  • Cialis, an erectile dysfunction drug, dropped 19 percent.
  • Prozac, an antidepressant. saw an 18 percent decrease.
  • Advair, a medication for Chronic Obstructive Pulmonary Disease (COPD), declined 22-60 percent, depending on the formulation.

Although only a small number of drugs had price cuts compared to hundreds of medications that saw price hikes, the decrease was nonetheless “truly remarkable from a historical perspective,” 46brooklyn noted in its report.

“This phenomenon is particularly noteworthy due to the nature of the drugs that underwent decreases, primarily comprising historically high-utilization products such as insulins, asthma/COPD inhalers, and central nervous system (CNS) drugs,” the report said.

The Downside of Rising Prescription Drug Prices

Price increases could affect healthcare costs for some employers and for people who cannot afford to pay for costly prescription drugs each month.

Ellen Kelsay, president and CEO of Business Group on Health, a nonprofit organization representing large employers, told Healthline that the high demand for GLP-1s is expected to lead to “considerable increases in healthcare costs for employers with self-funded insurance plans.

“The medications are expensive, and with over 40 percent of the U.S. population being overweight and/or struggling with obesity, the number of patients who could potentially be prescribed these medications is extremely high,” Kelsay told Healthline. “The cost of the medications, coupled with their widespread use—for the treatment of both diabetes and obesity—could create a challenging financial situation for the employer-sponsored plans as well as for patients.”

Marginalized consumers and lower-wage populations may be affected even more by high-list prices, Kelsay said, especially if they are uninsured or have health insurance that does not cover these medications.

When people cannot afford prescription medication, they look for alternative versions of medications that could be harmful.

“[High drug] prices in the U.S. drive consumers to use unregulated, untested and potentially-harmful knock-off compounded versions of these drugs, which is a real problem that we need to take very seriously in our country,” Dr. Angela Fitch, president of the Obesity Medicine Association and chief medical officer at Knownwell, a weight loss center in Boston, told Healthline.

Another twist is that employers and commercial insurance companies are more likely to cover Ozempic, Mounjaro, and other GLP-1 drugs when doctors prescribe them for treating diabetes. However, many private insurers, as well as Medicare and most state Medicaid programs, do not cover medications like these for weight loss.

As a result of the high cost of prescription drugs, many people say they have to choose between paying for their medication and paying for food and other personal expenses. More than one-third of Americans have not filled a prescription for medicine because of its cost, according to a March 2023 Economist/YouGov poll. In addition, 43 percent of the women polled and 44 percent of people with an annual family income under $50,000 are especially likely to say this, the poll said. Regardless of whether they have personally struggled to afford medication, the poll found Americans generally support the government negotiating prices with insurance companies.

Under the Inflation Reduction Act (IRA) of 2022, Medicare can now negotiate drug prices directly with drug manufacturers. The negotiations with participating drug companies started in 2023 and any negotiated prices will become effective beginning in 2026. 

In addition, drug manufacturers will also have to pay a rebate to Medicare this year if they raise their prices for certain drugs faster than the rate of inflation. In December, the Biden Administration announced that dozens of pharmaceutical companies raised the prices of certain medications faster than inflation and triggered Medicare rebates.

The administration noted in a news release that the IRA “cracks down on this exorbitant price gouging,” and as a result, seniors who take these drugs save between $1 and $2,786 per dose on their medication.

Source Links:

https://finance.yahoo.com/news/drugmakers-hike-prices-more-700-203300224.html
https://www.healthline.com/health-news/report-finds-prices-of-700-drugs-to-increase-including-ozempic-mounjaro#High-demand-for-weight-loss-drugshttps://www.novonordisk-us.com/about/perspectives/our-perspectives.html
https://today.yougov.com/health/articles/45388-americans-have-not-filled-prescription-price-poll?redirect_from=%2Ftopics%2Fhealth%2Farticles-reports%2F2023%2F03%2F10%2Famericans-have-not-filled-prescription-price-poll
https://www.whitehouse.gov/briefing-room/statements-releases/2023/12/14/fact-sheet-biden-harris-administration-announces-dozens-of-pharma-companies-raised-prices-faster-than-inflation-triggering-medicare-rebates/#:~:text=The Department of Health and,of the Inflation Reduction Act.

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