Investing.com — Shares of Novo Nordisk (NYSE:) fell on Wednesday after Bloomberg reported that Novo Nordisk’s diabetes drug Ozempic will “very likely” be among the next drugs targeted for a price cut in negotiations with the U.S. government’s Medicare program.
At 4:55 am (0855 GMT), Novo Nordisk (CSE:) was trading 1.7% lower at DKK 888.4.
This comes after the Inflation Reduction Act, which gives the US government the authority to negotiate drug prices with manufacturers, potentially leading to significant cost savings. Ozempic, currently approved for the treatment of diabetes but widely used for weight loss, has become a major source of revenue for Novo Nordisk.
The drug’s U.S. list price is $968.52 per month, and it is covered by most Medicare plans for type 2 diabetes.
Ulrich Otte, Novo Nordisk’s Senior Vice President of Finance & Operations, confirmed at the Cantor Global Healthcare Conference in New York that it is “highly likely” that Ozempic will be part of the next round of Medicare price negotiations.
Otte stated that the company is preparing for this eventuality, but warned that dramatic price reductions could impact the industry’s ability to innovate.
The US Centers for Medicare and Medicaid Services (CMS) is expected to release the list of 15 drugs targeted for the next round of negotiations in early 2025, with the new prices taking effect in 2027.
Novo Nordisk CEO Lars Fruergaard Jørgensen will also testify before a Senate committee next week as political pressure mounts over the high costs of life-saving drugs in the US, the report said.
Otte’s statement comes amid broader market concerns about the impact of the Inflation Reduction Act, which recently cut prices for ten key drugs by 38% to 79%, effective 2026.
