Wall Street anticipates Ozempic's inclusion in Medicare drug negotiations, raising questions about the future of Big Pharma.
As the U.S. government gears up for the next round of Medicare drug price negotiations, Novo Nordisk's blockbuster diabetes drug, Ozempic, is anticipated to be among the key players in 2027. Analysts on Wall Street are already betting that this move will have significant yet manageable impacts on the pharmaceutical industry. With the recent success in negotiating prices for some Medicare-covered drugs, effective in 2026, attention now shifts to the next potential list of drugs, and Ozempic is expected to be a focal point.
The growing spotlight on Ozempic for 2027
Ozempic has rapidly become one of the most talked-about drugs in the healthcare industry, not just for its efficacy in managing diabetes but also for its potential role in weight loss. As a result, Medicare's increasing expenditure on the drug has caught the attention of government officials, who are eager to bring down costs for beneficiaries. In 2022 alone, Medicare spent over $4.6 billion on Ozempic, making it a prime candidate for future price negotiations.
The upcoming 2027 negotiations are expected to include Ozempic alongside other significant drugs like Pfizer’s cancer treatments Ibrance and Xtandi, GSK’s Trelegy Ellipta for asthma and COPD, Teva’s Austedo for Huntington’s disease, and Abbvie’s Linzess for irritable bowel syndrome. These drugs, all of which have been on the market since at least 2017, represent a substantial portion of Medicare’s spending.
Under the Inflation Reduction Act (IRA) signed by President Joe Biden, the prices of 10 popular prescription drugs will be significantly reduced by 2026. Analysts predict that the 2027 list will bring further reductions, although the financial impact on pharmaceutical companies may be less severe than initially feared.
Managing financial impact: More bark than bite?
Analysts and executives in the pharmaceutical industry are cautiously optimistic about the financial repercussions of the 2027 Medicare negotiations. Despite the initial concerns, many believe that the actual impact on drug manufacturers’ bottom lines may be more manageable than expected. The market has already priced in these potential changes, and some experts suggest that the law may have "more bark than bite," at least in its early years.
For instance, Pfizer has acknowledged that two of its cancer drugs, Ibrance and Xtandi, could be on the 2027 list. However, the company remains confident that it can navigate these changes without significant disruption. Pfizer's Chief U.S. Commercial Officer, Aamir Malik, noted that the timing of patent expirations for these drugs could help soften the blow of any price cuts.
Similarly, Teva's CEO, Richard Francis, stated that the company has already factored in potential price reductions under the IRA for Austedo and still projects growth for the drug in 2027. Novo Nordisk, the manufacturer of Ozempic, has also expressed confidence in managing the financial impact, though the exact implications for Ozempic remain to be seen.
Looking ahead, the government is expected to announce up to 15 more drugs for negotiation in 2028, including those covered by Medicare’s hospital program, known as Part B. This expansion of the negotiation process could further reshape the landscape of drug pricing in the U.S., with potential ripple effects across the global pharmaceutical market.
As the healthcare landscape continues to evolve, it’s more important than ever to stay informed about the latest developments. Whether you’re a resident or a visitor, subscribe to Calle Ocho News’ newsletter to keep up with the latest news in Miami. Discover the best places to eat, fun things to do, and must-see places to visit in Miami, Florida. Small business owners in Miami can also reach out to Calle Ocho News for advertising services and tap into our extensive network to connect with the community.
Add Comment