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Costly Ozempic jab, which costs up to $1,300, can be made for just $5, study claims

Ozempic insulin injection pen for diabetics next to a measuring tape
"The profit margin is immense," study author Melissa Barber told Fortune.

As the Ozempic craze reaches fever pitch, more people than ever are shelling out thousands per year on the costly weight loss jab.

Manufactured by Novo Nordisk, a company now estimated to be worth $500 billion, the semaglutide injectable costs an eye-watering $1,300 at most — but a new study claims it doesn’t have to break the bank.

The high demand for the drug, initially intended to treat type 2 diabetes, has caused a shortage of the drug, and, coupled with the hefty price tag, a slew of potentially dangerous counterfeit medications and alternative methods for extreme weight loss.

“The profit margin is immense,” study author Melissa Barber told Fortune. Natalia – stock.adobe.com
“The profit margin is immense,” study author Melissa Barber told Fortune. Natalia – stock.adobe.com

Researchers from Yale University, King’s College Hospital in London and Doctors Without Borders calculated the estimated production costs of an array of weight loss drugs for diabetes, with final tallies ringing in significantly less than the current market price.

GLP-1 drugs and other diabetes medication “can likely be manufactured for prices far below current prices, enabling wider access,” the study authors wrote.

The study, published Wednesday in the JAMA Network Open, estimated the production costs of FDA-approved insulins, glucagonlike peptide 1 (GLP-1) agonists and sodium-glucose cotransporter 2 inhibitors (SGLT2I) and calculated a cost-based price.

Those cost-based prices — or “prices that would be expected in competitive markets that afford manufacturers sustainable returns, while avoiding excessive profit margins” — were then compared to the publicly available data regarding the lowest reported prices across 13 countries last year to conduct the analysis.

While the buzzy injectable costs Americans thousands, it may not have to, researchers suggest. Wild Awake – stock.adobe.com
While the buzzy injectable costs Americans thousands, it may not have to, researchers suggest. Wild Awake – stock.adobe.com

The research team concluded that the monthly cost of GLP-1 agonists could range from 75 cents to $72.49. The once-weekly injection of semaglutide, however, was estimated between 89 cents to $4.73.

“The profit margin is immense,” study author Melissa Barber, a public health economist at Yale University, told Fortune. “There should be a conversation in policy about what is a fair price.”

Novo Nordisk, which sells Ozempic for $935.77 for the lowest dose, declined to reveal the company’s production costs for neither Ozempic nor its sister drug Wegovy, according to NBC New York. The company did, however, highlight the $5 billion spent on research and development in 2023, as the drugmaker plans to shell out billions to boost production amid the increased demand.

Out-of-pocket costs, the pharmaceutical company added, depend greatly on the patient’s insurance coverage; for some, it can cost as little as $25 for one-, two- or three-month supplies of the coveted jab for up to two years.

The researchers hope to open a conversation about the “fair price” of medications. myskin – stock.adobe.com
The researchers hope to open a conversation about the “fair price” of medications. myskin – stock.adobe.com

While trendy injectables like Ozempic were first approved to treat patients with Type 2 diabetes, the weight loss drugs quickly gained traction over the last year among beauty-chasers and celebrities desperate to shed a few pounds.

But thinness comes at a cost to both their wallets and their health, as some users reported serious adverse side effects, such as stomach paralysis or intestinal blockage.