By Bhanvi Satija, Maggie Fick and Patrick Wingrove
LONDON (Reuters) -U.S. Medicare price cuts of up to 85% will have a lesser impact on drugmakers than initially feared, with most of the hit already reflected in forecasts, Wall Street analysts said.
Shares of Danish drugmaker Novo Nordisk and Israel-based Teva Pharmaceuticals rose 5% and 3% respectively after the U.S. government published negotiated prices late on Tuesday.
Novo’s top-selling drug semaglutide, sold as Ozempic for diabetes and Wegovy for weight loss, as well as Teva’s Austedo for Hungtington’s disease were among the 15 drugs on the latest list of medicines for the negotiated prices, which will take effect in 2027.
The announcement and recent White House deals offer clarity on pricing for popular GLP-1 drugs such as Wegovy and Eli Lilly’s Zepbound, which have drawn scrutiny over their costs.
The negotiated price for Novo’s semaglutide is “the final cloud to clear on the drawn-out, but positively resolved GLP-1 pricing debate,” said Bernstein analyst Christian Moore.
Goldman Sachs analyst Matt Dellatorre said in a note that Austedo’s 38% cut came in lower than the 45% or so reduction expected. The drug was reduced by just over $700 for a month’s supply compared to one estimate for its net price.
AbbVie’s respective list price cuts of 75% and 44% for its irritable bowel syndrome treatment Linzess and Vraylar for bipolar disorder may have been deeper than expected, said Guggenheim analyst Vamil Divan. AbbVie’s shares were down nearly 2% in afternoon trading.
The price cuts through the U.S. Medicare health plan for Americans age 65 and older come as President Donald Trump’s administration pushes the drug industry to advocate for other wealthy nations, particularly in Europe, to pay more for prescription medicines. The U.S. pays by far the most for prescription drugs.
Goldman Sachs said a key question for the first half of 2026 will be whether lower Medicare prices boost Wegovy volumes.
William Blair analysts noted the $274 monthly price for Novo’s semaglutide broadly aligns with recent government deals, but said uncertainty remains over insurance coverage expansion.
Two analysts said they are now watching for how Medicare plans will manage access to the first batch of 10 negotiated drugs announced last year, when new prices roll out for them in January 2026, and for the February 1 reveal of the next batch of 15 prescription and hospital-administered drugs to be negotiated for 2028.
FACTORED INTO NOVO, ASTRAZENECA AND GSK FORECASTS
Bernstein analysts said that five of the 15 targeted medicines will become generic by 2027, limiting their exposure to price cuts. The lower prices could even keep patients on the branded therapies longer, boosting volumes, they said.
Analysts agreed that the reductions had been factored into financial estimates for Novo, AstraZeneca and GSK.
Earlier this month, Novo said it expected a low single-digit impact to global sales if the price cuts were implemented this year. Analysts said that would imply roughly a 6 billion Danish crown ($931 million) sales hit.
AstraZeneca shares closed up slightly, while GSK shares gained about 1% on Wednesday.
GSK, when reporting third-quarter results, said any impact from negotiated prices was fully factored into its outlook.
Bernstein estimated the impact to AbbVie in the range of $100 million to $250 million for Vraylar and Linzess sales as well as for Amgen’s psoriasis drug Otezla.
($1 = 6.4404 Danish crowns)
(Reporting by Bhanvi Satija and Maggie Fick in London, Stine Jacobsen in Copenhagen, Mariam Sunny and Mrinalika Roy in Bengaluru, Patrick Wingrove in New York and Deena Beasley in Los Angeles; Editing by Alexander Smith and Bill Berkrot)
