Novo Nordisk Not Overly Concerned About Medicare Price Negotiations for GLP-1 Drugs
Novo Nordisk CEO Lars Jørgensen expresses confidence in the company's ability to manage the impact of Medicare price negotiations on its GLP-1 drugs. Despite the company's opposition to government price setting, Jørgensen believes the drug prices are comparable to those in Europe.
Europe vs. US Pricing
Jørgensen highlights that while the list prices of Novo Nordisk's GLP-1 drugs in the US appear higher, the actual prices after discounts and rebates are comparable to those in Europe. The CEO states that Novo Nordisk offers significant rebates, resulting in a 69% spread between gross and net sales.
Medicare Coverage
Medicare Part D coverage has been limited to Ozempic and Rybelsus for diabetes until 2025. However, the FDA approvals for Wegovy's cardiovascular benefits and Ozempic's kidney disease benefits are expected to increase the number of Medicare-covered patients in the future.
Commercial Market
Novo Nordisk's GLP-1 revenue is primarily driven by the commercial market, which accounts for 50% of the company's US sales. The commercial market has remained stable, with over 80% of patients paying less than $25 for a prescription.
Pipeline and Rebates
Despite the upcoming Medicare negotiations and patent expiration, Novo Nordisk is focusing on its pipeline and next-generation drugs like CagriSema and amycretin. Additionally, the company is addressing the issue of pharmacy benefit manager (PBM) rebates, which have been eroding profits.