Finance
US Medicare price cuts manageable for most drugmakers, analysts say
Published by Global Banking and Finance Review
Posted on November 26, 2025
3 min readLast updated: January 20, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on November 26, 2025
3 min readLast updated: January 20, 2026
US Medicare price cuts are less impactful on drugmakers than feared, with forecasts already adjusted. Shares of Novo Nordisk and Teva rose following the announcement.
By Bhanvi Satija and Maggie Fick
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 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 disease were among the closely watched drugs on the list of 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.
The price cuts through the U.S. Medicare health plan 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.
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.
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 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 and GSK shares were flat on Wednesday.
GSK said when reporting third-quarter results that any impact from negotiated prices was fully factored into its outlook.
Shore Capital analyst Sean Conroy said the cuts would hit earnings by "low- to mid-hundreds" of millions of pounds or dollars.
Bernstein estimated the impact on Abbie in the range of $100 million to $250 million to sales of its mood disorder drug Vraylar and irritable bowel syndrome medicine Linzess 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; Editing by Jane Merriman, Jan Harvey and Alexander Smith)
Price cuts refer to a reduction in the selling price of a product or service, often implemented to increase sales volume or respond to market conditions.
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