Inflation-Busting Price Hikes For Ozempic, Mounjaro And Others: Are Drugmakers Profiteering?

Diabetes treatments such as Ozempic and Mounjaro became the blockbuster drugs of 2023 thanks to their popularity as weight-loss remedies. Prices for a month’s supply of these drugs were high then, and in 2024 their manufacturers have raised them higher still.

According to data by 46brooklyn Research, commissioned by the Wall Street Journal, the price for Novo Nordisk‘s NVO Ozempic was increased at the start of the year by 3.5% to nearly $970 for a month’s supply.

Meanwhile, the price of a month’s treatment of Eli Lilly‘s LLY Mounjaro increased by 4.5% to around $1,070, according to the data.

The manufacturers told the WSJ that price increases consider factors such as market conditions and inflation, as well as the drug’s value, efficacy and safety.

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Nearly 800 Products Up In Price

It would be unfair to single out just two of the headline-making drugs of 2023, as research shows hundreds of brand-name drugs by multiple manufacturers have been increased in price already in 2024 — some by as much as 10% or higher, while the median increase is 4.5%.

Headline consumer price inflation stood at 3.4% in December, so can drugmakers be accused of profiteering?

Steve Morgan, an economist and professor of health policy at the University of British Columbia, has been researching policies to promote universal access to affordably priced medicines around the world for many years.

“Rising prices are a primary concern for health system managers because medicines are increasingly being priced at levels that appear unfair,” he said, writing in the British Medical Journal in 2020.

Drugmakers argue that prices for current medicines reflect the rising costs of research, development and testing of new treatments — and that newly-approved drugs must be priced accordingly to recoup these development costs.

But Morgan argues these costs are not disclosed by pharmaceuticals companies — nor do they acknowledge the role of public health funding by governments and the tax deductions granted for medical research and development costs.

“To maximize health benefits for populations and provide an incentive for valued innovations, health systems require policies to ensure that pharmaceutical prices never exceed comparative value for money, that returns for research investment are reasonable, and that price competition occurs as early as possible and is sustained,” he added.

Discounted Prices

Among the other drugs up in price in January, included common treatments for the world’s biggest killer — heart disease.

Eliquis is a common blood thinning drug used in the treatment of heart disease, and was developed jointly by Bristol-Myers Squibb Co. BMY and Pfizer Inc. PFE. It was approved in the U.S. in 2012 and is on the World Health Organization‘s list of essential medicines.

The WSJ-commissioned data showed that Eliquis, sold by both Pfizer and Bristol-Myers Squibb, took a list price increase of 6% to $594 for a month’s supply.

List prices, however, don’t necessarily reflect the actual price paid for such treatments. Drug companies offer national health systems substantial discounts for purchasing their products, while individual patients are often covered by insurance and only pay a fraction of the list price.

And in an election year, rising costs of medical treatment could become an even thornier issue as candidates from both parties take their stand on key public interest battlegrounds.

Indeed, the WSJ research suggested pharma companies may have moderated their price increases this year in response to expected political pressure. Last year the U.S. government started to penalise drugmakers that imposed price increases above the inflation rate.

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