Novo Nordisk Not Concerned About Medicare Price Negotiations for GLP-1 Drugs
Lars Jørgensen, CEO of Novo Nordisk (NVO), remains optimistic despite upcoming Medicare price negotiations for GLP-1 drugs. The company believes the prices are competitive with those in Europe and has prior experience with price negotiations.
Inclusion of GLP-1 Drugs in Negotiations
Medicare now covers semaglutide drugs, including Wegovy, Ozempic, and Rybelsus, for diabetes and cardiovascular benefits. Novo Nordisk anticipated this inclusion and is confident in managing the negotiations.
Limited Medicare Market Impact
Medicare is not Novo Nordisk's primary US market. The commercial market (employers and cash payments) accounts for 50% of GLP-1 revenue, compared to 30% for Medicare. The inclusion of additional indications and increasing patient populations may impact future Medicare revenue, but it's too early to determine the extent.
Pricing Considerations
Novo Nordisk emphasizes that despite higher list prices, actual pricing after rebates is comparable to those in Europe. The company provides approximately 70% rebates to PBMs. As a result, Novo Nordisk only receives $404.70 for a $1,349 list price of Wegovy.
Pipeline and Next-Generation Drugs
To mitigate potential challenges, Novo Nordisk is focusing on its pipeline, including CagriSema and amycretin. These drugs may enter the market within the next few years.
GLP-1 Drug Headwinds
Medicare negotiations and patent expirations pose challenges to GLP-1 drugs. However, Novo Nordisk's strong performance and upcoming pipeline developments position it well to navigate these challenges.