America’s Obesity and Spending Epidemic

The United States spends more on prescription drugs than any other country in the world. It has drastically expanded its net spending on prescription drugs over time, with a 764% increase from $47 billion in 1992 to $406 billion in 2022. And this value is projected to increase. The introduction of breakthrough weight-loss drugs, also known as GLP-1 antagonists, such as Novo Nordisk’s Ozempic and Wegovy, has the potential to virtually double prescription drug spending in the United States. Compared to other high-income countries, the United States ranks first in obesity prevalence. This statistic can be further explained by the 42% of American adults who are obese. 

The cost of supplying just half of these adults with drugs like Ozempic and Wegovy, at the current drug prices, is projected to cost $411 billion a year, according to the Senate Health, Education, Labor, and Pensions (HELP) Committee. The most comparable class of drugs with this large of an audience were statins (cholesterol medication) over forty years ago. No drug has come close to statin’s level of popularity and relevance until weight-loss drugs. 

The National Weight-Loss Drug Phenomenon

Despite their high costs, the country has become consumed by these drugs and their effects. The megahit popularity of Ozempic and Wegovy has taken over the news, social media, and daily conversations. These drugs along with Eli Lilly and Company’s Mounajaro and Zepbound have become household names as they alter the landscape of treating obesity. Oprah Winfrey, a long-time spokesperson for weight loss, has come out in strong support for the usage of GLP-1 antagonists. Some have gone as far as comparing these drugs to be as “omnipresent … as Taylor Swift or the iPhone” in our generation. This excitement stems from the proven results from randomized clinical trials that showed patients lost up to 15% of their body weight from these drugs. 

In an interview with Today, a woman named Sabrazsia Gardner describes Wegovy’s drastic impact on her eating habits. She explains how it changed the way she thought about food and completely altered her cravings and eating habits for the better. After taking Wegovy, she says, “I eat because I’m supposed to. You eat to live, not live to eat.” Gardner was able to finally achieve the weight loss she struggled with for years and also experienced a significant shift in her daily life that used to be dictated by her eating habits. The change in hunger described by Gardner can be attributed to the science behind these weight-loss drugs. Semaglutide, the active ingredient in Wegovy and Ozempic, curbs hunger signals – also called “food noise” –  in the brain. Additionally, it allows people to feel full faster by “slow[ing] down stomach emptying.”

International Comparisons and Domestic Impact

Unfortunately, this revolutionary weight loss technology is largely unavailable in the United States and is likely to decrease in availability due to one main factor: cost. According to the Peterson-KFF Health System Tracker, Ozempic and Wegovy cost $936 and $1,349 for a one-month supply, respectively. To add perspective, Ozempic costs 10x less in the United Kingdom ($93/one-month supply), and Wegovy costs 4x less in Germany ($326/for one-month supply). It is also important to note that a recent study published in JAMA found these drugs could be produced for under $5/one-month supply. This study only adds insult to injury to the bankrupting prices of these drugs in the United States.

In North Carolina, the State Health Plan was forced to end coverage of these weight-loss drugs, effective April 2024, to avoid doubling its premiums for state beneficiaries. Similarly, West Virginia’s Public Employees Insurance Agency was forced to cancel its pilot program that included the coverage of weight-loss drugs. While this decision was necessary due to the adverse financial consequences of covering these drugs, its psychological and medical impacts were deeply distressing. West Virginia ranks “among the poorest states in the country, with the highest rates of obesity, at 41%.” Physicians and patients alike were infuriated by this decision. Without insurance covering or at least partially covering the cost of these drugs, they are essentially inaccessible. One physician gloomily remarks, “[these drugs] may as well have never been created.” West Virginians were given a glimpse of a new obesity landscape only to have it ripped from their grasp. 

Congressional Response to Cost

In response to the growing scrutiny of the excessively high costs of Ozempic and Wegovy and the resulting backlash in states like North Carolina and West Virginia, Senator Bernie Sanders (I-VT), Chairman of the Senate HELP Committee announced that the CEO of Novo Nordisk, Lars Jørdgensen, would testify in front of the HELP Committee in September 2024 on the high costs Americans pay for Ozempic and Wegovy. In his press release, Senator Sanders, a long-time critic of “Big Pharma,” stated that “the American people are sick and tired of paying, by far, the highest prices in the world for prescription drugs.” The deep frustration of Senator Sanders and the American people is blatantly clear in this statement. Researchers from the Majority Staff of HELP found that the high price of these drugs “have the potential to bankrupt our entire health care system.” 

In response to this planned hearing, Novo Nordisk stated that CEO Jørdgensen “[looks] forward to discussing solutions that ensure access and affordability for all patients within the complex US healthcare system.” While this statement is promising, its language is interesting. The description of the United States healthcare system as “complex” alludes to the larger issues regarding prescription drug pricing in the United States compared to countries of similar socioeconomic status. 

A Possible Explanation to the Cost Crisis

Although the costs of weight-loss drugs are undoubtedly steep in the United States, it is necessary to acknowledge the different organization of the United States healthcare system compared to countries with lower drug costs. It is the particular structuring within the United States that has unfortunately, but also inevitably, led to unaffordable drug prices for Americans. One of the chief reasons for the high costs of weight-loss drugs and all prescription drugs in the United States is the lack of one primary entity (e.g. the government) designated to negotiate with pharmaceutical companies. 

While the Inflation Reduction Act of 2022 has altered this reality with the introduction of Medicare negotiating 10 drugs, the free market still largely dictates the cost of drugs. Drug companies often find that the United States is the buyer where they can make the most money since costs are kept lower in other countries due to regulated markets. As a result, “Americans are essentially subsidizing the cost of drugs for the rest of the world.”

Another factor that contributes to the costs of these drugs in the United States is the high demand. The United States spent 5x more money on weight-loss drugs than the second largest buyer (Europe, Middle East, and Africa). In a healthcare system driven by the market, the current consumer necessity is unforgiving to Americans’ pockets. Pharmaceutical companies capitalize off the needs of the United States at the expense of Americans.

Looking Forward

Healthcare in the United States is a contentious and costly issue. Throughout the summer of 2024, Congress has regularly discussed the need to address various economic problems within the current system, ranging from healthcare cost transparency to medical debt. And now soon joining the discussion: prescription drug prices. Legislators on both sides of the aisle collectively agree the cost of United States healthcare has become out of control. While there are undoubtedly disagreements on how to approach this financial dilemma, it is clear that there is widespread interest in finding solutions. As healthcare continues to remain a front-and-center topic, there is plausible hope for new improvements to accessibility and affordability.

Suggestions for Further Reading

1. Sanders targets ‘unacceptable’ price of weight-loss drugs Ozempic and Wegovy
2. Senate Committee Investigates Ozempic and Wegovy Costs
3. America’s weight-loss drug boom, explained
4. In States That Won’t Pay for Obesity Drugs, ‘They May as Well Have Never Been Created’
5. Steep Ozempic, Wegovy prices face fresh scrutiny from officials
6. The Federal Perspective on Coverage of Medications to Treat Obesity: Considerations From the Congressional Budget Office
7. How Weight Loss Drugs Could Bankrupt American Health Care
8. How Does Ozempic Work?
9. Estimated Sustainable Cost-Based Prices for Diabetes Medicines
10. Six Reasons Drug Prices Are So High in the U.S.