Novo Nordisk launches cash payment discounts, Ozempic's monthly fee in the U.S. drops from $1,000 to $499

Novo Nordisk announced a significant reduction in the price of Ozempic, targeting patients who pay out of pocket for the medication. Previously, this diabetes injection had become a "typical representative" of the high drug price issue in the United States.

According to a statement released by Novo Nordisk on Monday, patients can now purchase Ozempic through its out-of-pocket pharmacy platform NovoCare for $499 per month, about half of the market price in the U.S. Additionally, Novo Nordisk has partnered with the drug discount platform GoodRx, leveraging GoodRx's channels and technology to make the reduced-price Ozempic and Wegovy available nationwide at the same price of $499 per month.

After the announcement, Novo Nordisk's stock rose over 6% during early trading on Monday. In fact, on Monday, Wegovy received approval from the U.S. Food and Drug Administration (FDA) for the treatment of a severe liver disease, which had already begun to boost Novo Nordisk's stock price.

This price reduction is specifically aimed at patients without insurance or whose insurance does not cover Ozempic, with the goal of improving the "accessibility" of the medication. Unlike weight loss drugs, Ozempic, as a diabetes treatment, is widely covered by insurance in the U.S., and patients rarely need to pay the full price. Dave Moore, head of Novo Nordisk's U.S. operations, stated in a statement:

"While Ozempic is well-covered by insurance in the U.S., we cannot forget that there are still some patients who need to pay out of pocket for this important medication. We believe that even if only one patient turns to potentially unsafe, unapproved generic alternatives due to price issues, that is already too many."

Ozempic was originally a medication for treating type 2 diabetes, but due to its significant weight loss side effects, it has become extremely popular in the U.S., being used off-label by more and more people. Its price has also become a typical target for political and media criticism regarding "high drug prices in the U.S."

Former President Trump has been pressuring several pharmaceutical companies, including Novo Nordisk, to lower prices through letters. The Biden administration had previously attempted to push for a reduction in Ozempic's price but was unsuccessful. Last year, the former CEO of Novo Nordisk was even summoned by Congress to testify about why its drug prices in the U.S. are much higher than in other countries.

However, Novo Nordisk stated that this price reduction is unrelated to its negotiations with the U.S. government.

Interestingly, just a week before Novo Nordisk announced the price cut, its main competitor Eli Lilly had just raised the listed price of its weight loss drug in the UK by as much as 170%.

Another important background for this price reduction is that due to supply shortages, many patients have begun using cheaper "generic version injectables," which has created competitive pressure for both Eli Lilly and Novo Nordisk.