Novo Nordisk accepts U.S. Medicare price deal for obesity drugs

[New Nordisk]
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Novo Nordisk (NVO [https://seekingalpha.com/symbol/NVO]) said Wednesday it has agreed to the U.S. Inflation Reduction Act’s (IRA) negotiated maximum fair prices for semaglutide, the active ingredient in its popular drugs Ozempic and Wegovy, effective January 2027.

These drugs are part of the second batch of 15 medicines selected under President Biden’s 2022 IRA program, which allows Medicare to negotiate prices for some of the costliest treatments for seniors and people with disabilities

“While maintaining all legal challenges and rights, Novo Nordisk accepted the US Inflation Reduction Act’s Maximum Fair Price (MFP) for Ozempic, Rybelsus and Wegovy in Medicare Part D, effective as of January 2027," the Danish drugmaker said.

The announcement, made alongside Novo’s quarterly earnings release, follows reports that Novo and U.S. rival Eli Lilly (LLY [https://seekingalpha.com/symbol/LLY]) were expected to finalize agreements with the Trump administration this week to lower prices on their weight-loss drugs in exchange for Medicare coverage.

Novo did not reveal the negotiated price but noted that, if implemented this year, it would have had a negative “low single-digit” impact on global sales. "The estimated direct impact of a semaglutide MFP in Medicare Part D, had it been introduced 1 January 2025, would have been a negative low single-digit impact on global sales growth for the full year 2025,” Novo Nordisk said.

JPMorgan analysts estimated the hit could be about DKK 6 billion (~$937 million), calling it “better than feared” and potentially enough to offset the impact of the company’s guidance downgrade.

Q3 RESULTS

Novo Nordisk’s Q3 sales rose 5% in Danish kroner and 11% at constant exchange rates compared with the same period last year. Wegovy sales climbed 18% year-over-year to DKK 20.35 billion, slightly below analysts’ expectations of DKK 20.9 billion.

Operating profit declined 30% in Danish kroner and 21% at constant exchange rates, weighed down by one-off restructuring costs of about DKK 9B (US$1.38B) tied to Novo Nordisk’s company-wide transformation and the acquisition of three former Catalent manufacturing sites.

Net profit dropped 27% to DKK 20,006M (~US$3B), while adjusted net profit rose 5% to DKK 29,179M. Diluted EPS fell 26% to DKK 4.50 ($0.69). Analysts had expected normalized EPS of $0.66 for the quarter.

Novo Nordisk (NVO [https://seekingalpha.com/symbol/NVO]) now expects 2025 sales to grow by up to 11% and operating profit by as much as 7% at constant exchange rates, down from its earlier forecast of up to 14% revenue growth and a 10% profit increase. CEO Mike Doustdar, who took the helm in August, said the narrowed guidance was due to "lower growth expectations for our GLP-1 treatments."

Shares of Novo Nordisk (NVO [https://seekingalpha.com/symbol/NVO]) were up 0.9% at press time, while rival Eli Lilly (LLY [https://seekingalpha.com/symbol/LLY]), which last week raised its outlook for full-year 2025 amid solid demand for its widely popular weight-loss and diabetes drugs, rose 1.7% premarket.

MORE ON NOVO NORDISK

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* Novo Nordisk: Desperate Move [https://seekingalpha.com/article/4836823-novo-nordisk-desperate-move]
* Novo: Risks Revisited And Potential Metsera Deal [https://seekingalpha.com/article/4835853-novo-risks-revisited-and-potential-metsera-deal]
* Novo Nordisk reports Q3 results [https://seekingalpha.com/news/4515414-novo-nordisk-reports-q3-results]
* Novo Nordisk cuts 2025 forecast again, cites slower sales of Wegovy and Ozempic [https://seekingalpha.com/news/4515402-novo-nordisk-cuts-2025-forecast-again-cites-slower-sales-of-wegovy-and-ozempic]