TL/DR –
President Trump has stated that the price of diabetes drug Ozempic could potentially decrease to $150 a month, causing shares of the drug’s manufacturers, Novo Nordisk and Eli Lilly, to drop. Ozempic, which costs roughly $1,000 for a monthly supply, has been selected for price negotiation under the Inflation Reduction Act (IRA), a plan pushed forward by former president Joe Biden to cut drug costs. However, it’s been noted that the discussed price cuts may not significantly impact Novo’s business as those with insurance already pay far less than the list price for the drug.
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President Donald Trump has announced that the cost of the widely used diabetes drug, Ozempic, could be reduced to as low as $150 per month. This announcement led to a decline in the stock values of both Novo Nordisk A/S and Eli Lilly & Co., the companies that manufacture Ozempic and similar treatments respectively.
Trump’s statements regarding the anticipated price reduction of the drug, which he referred to as “the fat loss drug,” were made during a press conference at the Oval Office. He declared, “Those are going to be $150 out of pocket.” Currently, a month’s supply of Ozempic is priced around $1,000 in the US.
Following his remarks, Novo’s shares plummeted by as much as 5.6% in early Copenhagen trading, marking the highest drop since August. Over the past year, the company has suffered a 58% decline in share value, largely due to concerns about its competitive stance in the weight-loss market. Eli Lilly’s shares were also negatively affected, falling by as much as 5.3% in late New York trading.
The President’s comments were made during an event that highlighted the administration’s recent deal with Merck KGaA. This agreement with the German pharmaceutical company involved reducing prices for fertility treatments in exchange for a reprieve on impending pharmaceutical tariffs. Similar agreements with Pfizer Inc. and AstraZeneca Plc have also been announced, and investors are now anticipating similar moves with the manufacturers of other major weight-loss drugs.
In response to Trump’s remarks, Mehmet Oz, head of the Centers for Medicare and Medicaid Services, clarified that negotiations concerning weight-loss drug prices are still ongoing, stating, “We haven’t negotiated those yet.” Despite this, the President’s comments indicate a tough stance in the ongoing talks, according to Evan Seigerman, an analyst for BMO Capital Markets.
Despite the President’s statement, the negotiated reduction in price might not significantly impact Novo’s business. Segierman noted that insured individuals already pay as little as $25 a month for the drug, and the net price of Ozempic after rebates for insurers is likely around 60%-70% lower than the list price.
Trump previously sent letters to 17 of the largest pharmaceutical companies demanding they reduce their drug prices. Among the drugs selected for price negotiations under the Inflation Reduction Act were Novo’s Ozempic and its sister drug Wegovy. “We’re going to be rolling those out over time,” said Oz. He also clarified that negotiations for the GLP-1 category of drugs, which includes Ozempic, are yet to commence.
When queried about the timeline of these negotiations, Trump stated that prices would decrease “pretty fast.” Oz confirmed that negotiations with the pharmaceutical companies are ongoing and will continue until satisfactory results are achieved. He also commented that discussions on lower prices for Ozempic and Wegovy under a plan initiated by Former President Joe Biden are already underway as part of the Inflation Reduction Act. The deadline for these negotiations has been set as Nov. 1, with the reduced prices taking effect in 2027.
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