Investing.com -- Shares of Novo Nordisk (NYSE:NVO) fell on Wednesday after Bloomberg reported that Ozempic, Novo Nordisk’s diabetes drug, is ”very likely” to be one of the next drugs targeted for a price cut in bargaining with the US government’s Medicare program.
At 4:55 am (0855 GMT), Novo Nordisk (CSE:NOVOb) was trading 1.7% lower at DKK 888.4.
This comes after the Inflation Reduction Act, which empowers the U.S. government to negotiate drug prices with manufacturers, potentially leading to significant reductions in costs. Ozempic, currently approved for treating diabetes but widely used for weight loss, has become a key revenue driver 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 "very likely" Ozempic will be part of the next round of Medicare price negotiations.
Otte stated that the company is preparing for this possibility but warned that dramatic price cuts could impact the industry's capacity for innovation.
The U.S. Centers for Medicare and Medicaid Services (CMS) is expected to release the list of 15 drugs targeted for the next round of negotiations by early 2025, with new pricing set to take effect in 2027.
Novo Nordisk CEO Lars Fruergaard Jørgensen is also slated to testify before a Senate committee next week, as political pressure grows over the high costs of life-saving medications in the U.S, the report added.
Otte’s statement comes amid broader market concerns over the impact of the Inflation Reduction Act, which recently slashed prices for 10 major medications by 38% to 79%, effective in 2026.