The pharmaceutical giant, Novo Nordisk, is carefully assessing the potential effects of Medicare pricing on its operations. Despite this concern, Novo Nordisk remains relatively optimistic as Medicare is not its primary market in the US.
Up until the beginning of 2025, only two of Novo Nordisk’s products, Ozempic and Rybelsus for diabetes, were covered by Medicare Part D due to regulations restricting coverage for weight loss medications. However, with recent FDA approvals for Wegovy, offering cardiovascular benefits, along with Ozempic providing benefits for kidney disease, the potential patient base for Novo Nordisk has significantly expanded for both current and future years.
President of Novo Nordisk, Inc. in the US, Dave Moore, emphasized during an earnings call that it is too early to predict the impact of these negotiations on future revenues. He highlighted that their largest revenue driver for GLP-1s comes from the commercial market, including employers and cash payments, rather than Medicare.
Moore stated, “It’s too early to speculate on potential impact [of drug price negotiations]. As we’ve stated in the past, we oppose government price setting, like we have from the beginning.” He noted that the US channel mix across their portfolio consists of 50% commercial, 30% Medicare, 10% Medicaid, and 10% other.
Looking towards the future, Novo Nordisk is already focusing on its pipeline and next-generation drugs to address long-term challenges such as Medicare negotiations expected to take effect in 2027 and the patent cliff for semaglutide in 2032. The company is actively developing drugs like CagriSema and amycretin, currently in mid- to late-stage trials, which could potentially enter the market in the coming years.
Despite facing headwinds in terms of decreasing profits from GLP-1 products, Novo Nordisk is also grappling with the growing gap between gross and net sales, mainly due to rebates provided to pharmacy benefit managers (PBMs). CFO Karsten Munk Knudsen highlighted significant adjustments between gross and net sales in the US, with a substantial spread of 69%.
Jørgensen, in an interview with Yahoo Finance, emphasized that pricing in the US is not significantly different from Europe when considering rebates. He mentioned that Novo Nordisk typically offers around 70% of rebates on average, resulting in a lower net amount received compared to the listed price.
Despite these challenges, Novo Nordisk reported that approximately 60% of its total revenues in the previous year, amounting to $40.5 billion, came from its blockbuster GLP-1 products. Notably, Wegovy experienced a remarkable growth of 150% compared to the previous year.
Anjalee Khemlani, the senior health reporter at Yahoo Finance, covers a range of topics including pharma, insurance, care
