Cost of Making Ozempic Is Lower Than What Consumers Pay

A new analysis found that drug companies could offer diabetes management drugs, including semaglutide-based medications like Ozempic, and insulin, at a significantly lower cost and still make a profit.

A recent poll suggests that Americans are interested in taking highly popular GLP-1 receptor agonists (GLP-1) weight loss/diabetes management drugs like Ozempic but can't afford the high cost. Moreover, 83% of respondents felt that drug manufacturers are driving the high cost to boost profits.

In addition, not all health insurance policies cover these medications. Without insurance, Ozempic can cost up to $1,400 per month.

Insulin prices are also concerning. Though the Inflation Reduction Act capped prices of some insulin products at around $35 per month, a 2023 study found that insulin manufacturers use regulatory exclusivity and patents to prevent other pharmaceutical companies from producing generic versions, which would drive the costs down.

Now, a new analysis of current drug prices in 13 countries published in JAMA Network Open has revealed that the manufacturing costs of insulin products and medications like Ozempic are drastically lower than what consumers pay.

Specifically, estimated cost-based prices for GLP-1s like Ozempic were $0.75 to $72.49 per month, which is far lower than the approximately $1,000 per month people pay for Ozempic without insurance.

Moreover, the analysis showed that the estimated cost-based prices of sodium-glucose cotransporter 2 inhibitors (SGLT2Is), such as Jardiance, were $1.30 to $3.45 per month. The estimated cost of a one-month supply of Jardiance is currently around $653.

According to the study, reusable insulin pen devices could cost as little as $96 (human insulin) or $111 (insulin analogs) per year. In addition, twice-daily injections of mixed human insulin could cost $61 per year.

The study authors say that pharmaceutical prices and manufacturing costs are kept secret, and drug manufacturers do not publish these costs. Moreover, three pharmaceutical firms, Novo Nordisk, Eli Lilly, and Sanofi, control over 90% of the global insulin market and 83% of the low and middle-income country (LMIC) market. These companies are considered "the Big 3."

The researchers point out that at least 40 companies manufacture or market insulin globally. However, many of these firms operate under licensing or supply agreements with the Big 3.

Moreover, the SGLT2Is and GLP-1s analyzed in the study are protected by patents in the United States and Canada and are not available in generic form in these countries or the United Kingdom.

Concern over the Big 3's involvement in high drug prices sparked a lawsuit filed by the state of California, alleging the companies engage in excessive pricing and unfair business practices.

The study's authors say that due to the rapid rise in the number of people with diabetes and the need to mitigate risk factors for the disease, such as obesity, strategies are urgently needed to reduce insulin and GLP-1 prices to increase access to these treatments worldwide. These strategies could include opening the door for manufacturers to produce generic versions and the development of biosimilar drugs.