Crypto News: One Compound Replenishes Decades of R&D

Hi, it's Bob in New York. I've been writing about drug costs for years, and Ozempic and Wegovy turn out to be in a unique category. Before we get to that …

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When I started writing about drug costs more than two decades ago, $25,000 a year was considered a high price. Since then everything's gone up. Cancer drugs now routinely cost $200,000 a year. Injections for immune diseases like psoriasis and rheumatoid arthritis can top $80,000 annually. And exotic gene therapies for rare diseases can hit $3 million for a one-time treatment.

Drugmakers justify the prices by citing their considerable research budgets. Novo Nordisk is no exception. It says it spent over $10 billion developing Ozempic and similar drugs over three decades, and that its investment in obesity medicines only turned profitable in the last two years. Wegovy, the high-dose obesity version of Ozempic, wasn't approved in the US until 2021.

In the pantheon of lofty brand-name drug prices, Ozempic and Wegovy are in the middle. The monthly list prices of $968.52 for Ozempic and $1,349.02 for Wegovy aren't close to the highest out there. On the other hand, few drugs have been sold at prices like this for such a broad group of patients. More than 40% of Americans have obesity, making them potentially eligible for treatment.

To figure out whether Novo really needs to charge so much in the US to pay for all its research, my colleague Tanaz Meghjani and I dug into Novo's companywide R&D spending for the past three decades. Our findings suggest that Ozempic has more than covered its cost.

Novo's cumulative sales of Ozempic and Wegovy are so high — on track to hit $65 billion by the end of the year — that they will soon surpass the drugmaker's entire companywide research budget for the past three decades, after adjusting for inflation.

That undercuts the company's key pricing argument.

Certainly, the list price seems higher than some all-time mass market blockbusters from the past. Pfizer's Lipitor, the best-selling drug in the world for years, cost about $150 a month around the time it lost patent protection in 2011, or about $215 in today's dollars, according to 3 Axis Advisors.

Novo Nordisk's CEO Lars Fruergaard Jorgensen is set to be grilled today over Ozempic's price in front of a Senate committee led by Vermont Senator Bernie Sanders. Based on Jorgensen's written testimony, he will likely blame the middlemen in the US's overly complicated pricing system.

Expect fireworks. — Robert Langreth

The benefits of apples are detailed in the New York Times, while WTVO warns against drinking their juice in unpasteurized cider.

Women in pain are often dismissed by their doctors and failed by the American health-care system, The Hill reports.

Americans would pay $200,000 for one more year of good health, according to Fortune.

Health questions? Have a tip that we should investigate? Contact us at AskPrognosis@bloomberg.net.

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