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The President of the United States, Joe Biden, and Sen. Bernie Sanders, the Senate Chairman of the Health, Education, Labor, and Pensions Committee, have long been vocal about the exorbitant prices the pharmaceutical industry charges for prescription drugs in the U.S.
Americans pay the highest prices globally for essential medications, with 1 in 4 unable to afford the prescriptions their doctors recommend, the USA Today highlighted.
The argument that high domestic prices subsidize fair prices abroad is unacceptable, Biden said.
Significant strides have been made recently to address these issues. The Inflation Reduction Act passed without a single Republican vote, has capped insulin costs at $35 per month for seniors with diabetes.
Starting in January, no senior will pay more than $2,000 annually for prescription drugs, the report added.
Additionally, Medicare will now negotiate with pharmaceutical companies to lower the prices of the most expensive medications.
These policies have widespread public support, with more than 60% of Republicans in agreement. Collaborative efforts have also led to reducing inhaler costs from $645 to $35 for millions of Americans with asthma and chronic obstructive pulmonary disease.
The proposed legislation aims to expand the number of drugs eligible for price negotiation to at least 50 per year.
The U.S. government must continue to challenge Big Pharma, and drug companies must cease overcharging Americans, Biden said.
For example, Novo Nordisk A/S (NYSE:NVO) charges excessively for its blockbuster obesity drugs, Ozempic and Wegovy, despite manufacturing costs being less than $5 per month.
Eli Lilly And Co (NYSE:LLY) also charges over $1,000 per month for Mounjaro, a drug for diabetes and weight loss.
The disparity in drug prices between the U.S. and other countries like Canada, Germany, and Denmark is stark.
A Yale University study found that Ozempic and Wegovy could be profitably manufactured for significantly less than their current prices.
The potential costs of widespread use of weight loss drugs like Wegovy could exceed what Americans currently spend on all prescription drugs.
Pharmaceutical companies must balance profit with social responsibility, said Biden.
Last year, the top 10 pharmaceutical companies made over $110 billion in profits. In 2023, Novo Nordisk’s profits exceeded $12 billion, partly due to high prices for medications like Ozempic.
Pharmaceutical companies argue that opaque discounting mechanisms and high prices are necessary for innovation. However, fair prices for consumers are balanced with rewarding innovation.
If companies like Novo Nordisk do not reduce drug prices, legislative measures will be taken to enforce price reductions, Biden said.
Ensuring affordable prescription drugs for all Americans is a moral and fiscal responsibility.
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Price Action: LLY shares are down 1.79% at $897.88, and NVO stock is down 2.04% at $142.47 at the last check on Tuesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo by Tobias Arhelger via Shutterstock
