Ozempic, the blockbuster diabetes shot made by Novo Nordisk A/S, is “very likely” to be one of the next drugs targeted for a price cut in bargaining with the US government’s Medicare program, a company executive said.
The Inflation Reduction Act, which allows the US to directly negotiate drug prices with manufacturers for the first time, last month slashed the cost of 10 of the world’s biggest medicines by 38% to 79% for 2026. The 15 drugs targeted for the next round are expected to be named by early next year, drawing widespread speculation about which treatments will be in the government’s crosshairs.
“It is very likely that Ozempic will be part of negotiations in the coming round, and we’re ready for that,” Ulrich Otte, senior vice president of finance & operations for Novo Nordisk, said Tuesday at Cantor Global Healthcare Conference in New York.
Novo’s American depositary receipts fell as much as 3.7% on Tuesday before paring their decline.
While Ozempic is formally approved in the US to treat diabetes, it’s also one of a handful of medicines widely used for weight loss. It has a list price of $968.52 a month in the US and is covered by most Medicare plans for type 2 diabetes. Many health-care analysts have said they expected it to be in the lineup for the next round of price cuts.
Price Haggling
One million Americans are currently taking Novo’s drugs for weight loss, Otte said. The company also sells a higher dose version of Ozempic, called Wegovy, for obesity.
The cost of those drugs are higher in the US than most other countries, many of which already haggle over prices, creating political pressure as the US Centers for Medicare and Medicaid Services identifies medicines for each round of negotiations.
Read More: Why Prescription Drug Prices in the US Are So High: QuickTake
Novo Chief Executive Officer Lars Fruergaard Jørgensen will testify before a Senate committee led by Senator Bernie Sanders about the drugs’ prices next week.
The government price interventions could have a significant impact on innovation if they become “too dramatic,” Otte said, adding that it’s too early to speculate.
“We feel like we have an incredibly strong case on the health economics,” he said.
The US Centers for Medicare and Medicaid Services is slated to announce the next round of 15 retail prescription drugs that will be part of the negotiations by Feb. 1, 2025. The agency will announce the maximum fair prices for them by Nov. 30, 2025, and negotiated prices will go into effect on Jan. 1, 2027.
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