Key Points:
- U.S. plans drug price cuts, targeting Ozempic and similar drugs under a new pricing model.
- Novo Nordisk shares fell 6.3%, with Eli Lilly and Zealand Pharma also down.
- Company in talks with U.S. officials; analysts expect limited financial impact.
COPENHAGEN, Oct. 17—Novo Nordisk shares declined as much as 6.4% on Friday after the U.S. administration signaled that prices for certain weight-loss and diabetes drugs may be reduced under a proposed national pricing framework.
The policy, discussed during a White House event on fertility treatments and prescription costs, aims to narrow the gap between U.S. and international drug prices. Under the proposed “most favored nation” model, drugmakers would be required to align U.S. prices with those charged in other developed nations.
During the event, the President identified Novo Nordisk’s Ozempic as one of the drugs potentially affected by the new pricing structure. Ozempic, primarily approved for diabetes treatment, contains the same active ingredient as the company’s weight-loss drug Wegovy. “They’ll be much lower,” the President said when asked about the expected price levels.
Market reacts to policy comments
Following the announcement, Novo Nordisk shares fell to a near three-week low of 342.3 Danish crowns before stabilizing at 343 crowns, down 6.3% in mid-day trading. Shares of sector peers Eli Lilly and Zealand Pharma also declined, falling about 4% and 6%, respectively.
The Danish pharmaceutical company, one of Europe’s largest by market value, has reported significant growth this year, driven by demand for weight-management products. Wegovy and Ozempic have both contributed to record global sales amid increasing interest in obesity treatments.
A Novo Nordisk spokesperson said the company is in discussions with U.S. officials regarding the details of the proposed pricing framework. “We are engaged in dialogue with the U.S. government on how best to ensure continued patient access while supporting innovation,” the spokesperson said.
Analysts note expected adjustments
Analysts at UBS said they had already included potential U.S. price reductions in their forecasts for Novo Nordisk. “If the prices mentioned by the administration reflect the final negotiated levels, this would already be captured in our estimates,” the analysts said in a client note.
Market analysts broadly expect moderate financial effects if price adjustments are implemented gradually. They also noted that Novo Nordisk’s global market presence and diversified product portfolio could help offset any decline in U.S. revenue.
The proposed policy forms part of a broader effort to standardize drug pricing and make medications more affordable for American consumers. Officials have stated that the initiative seeks to align U.S. pharmaceutical costs with those in other advanced economies.
Novo Nordisk, headquartered in Bagsværd, Denmark, manufactures several leading diabetes and weight-loss treatments. While Ozempic is officially approved for diabetes management, it is frequently prescribed off-label in the United States for weight reduction.
By the close of European trading, Novo Nordisk shares were down 6.3%, while the broader healthcare index fell about 2%.
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