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Ozempic, the blockbuster diabetes treatment by Novo Nordisk (NVO), is ‘very likely’ to see its price cut as part of the second round of Medicare drug price negotiation in 2025, an executive from the Danish pharma giant said on Tuesday.
Bloomberg reported that Ulrich Otte, Novo Nordisk senior vice president of finance & operations, made the comment at the Cantor Global Healthcare Conference in New York.
“It is very likely that Ozempic will be part of negotiations in the coming round, and we’re ready for that,” Otte said, according to the outlet.
The company’s stock dipped over 3% during midday trading on Tuesday.
“We can’t speculate on which Novo Nordisk medicines will be selected for future negotiations with [the] Centers for Medicare and Medicaid Services (CMS),” a Novo Nordisk spokesperson told Quartz in an emailed statement. “We have opposed government price setting through the Inflation Reduction Act (IRA) and have serious concerns about how the law is being implemented.”
The IRA, which was passed by Congress in 2022, allowed for CMS to negotiate the price for brand name drugs that make up the most of Medicare’s prescription drug spending.
The U.S. Department of Health and Human Services (HHS) announced in August the lowered prices of the first 10 prescription drugs that underwent Medicare negotiations.
The selected drugs accounted for $56.2 billion in total Medicare spending in 2023, according to HHS. The negotiations resulted in price discounts ranging from 38% to 79%.
CMS is set to select 15 more drugs for price negotiations by February 2025.
Otte’s comments come as several prominent government officials have already called for price cuts of the popular diabetes medication.
In a July op-ed, President Joe Biden and Sen. Bernie Sanders criticized the high prices Novo Nordisk and other pharmaceutical companies charge Americans for weight loss and diabetes drugs known as GLP-1 treatments. Novo Nordisk produces the the popular Ozempic and Wegovy brands, and Eli Lilly (LLY) is the maker of Mounjaro and Zepbound.
Novo Nordisk CEO Lars Fruergaard Jørgensen agreed to testify in September before the Senate’s health committee to address the pharma giant’s high U.S. prices. Jørgensen agreed to testify just days after after Sanders, chairman of Committee on Health, Education, Labor, and Pensions (HELP), called a vote to subpoena a Novo Nordisk executive.
In April, the HELP committee launched an investigation into the high prices the company charges for its blockbuster drugs. At the time, the senator also warned that the drugs could potentially bankrupt Medicare and Medicaid. He cited researchers from Vanderbilt University and the University of Chicago that said it could cost more than $150 billion a year for Medicare to cover Wegovy and other weight loss drugs.
In June, the committee’s investigation found that the net cost of Ozempic in the U.S. is about $600 a month (its retail price is $968.52), well above the drug’s price in other countries. Ozempic in Germany costs just $59 for a month’s supply.
