JPMorgan said the implied net impact aligns with recent commentary from Novo Nordisk, Teva and AbbVie during earnings season.
- CMS’ newly released maximum fair prices include list-price reductions of 38% to 85% for 15 widely used medicines beginning in 2027.
- JPMorgan said the implied net impact aligns with recent commentary from Novo Nordisk, Teva and AbbVie during earnings season.
- CMS estimated the 2027 pricing will generate $12 billion in Medicare savings based on last year’s spending.
JPMorgan Chase & Co. said the newly released maximum fair prices for the 15 drugs picked for the 2027 Inflation Reduction Act negotiations imply net cuts of roughly 35% to 40%, putting Novo Nordisk’s semaglutide and Teva’s Austedo in the spotlight.
Despite the brokerage’s view, Novo Nordisk’s U.S.-listed shares rose 3.5% to $48.71 on Wednesday and edged up 0.1% after hours, while Teva gained 5.3% to $26.32 and held steady in late trading.
Analyst Take
JPMorgan said its estimated 35% to 40% net price impact in 2027 aligns with commentary from Novo Nordisk, Teva and AbbVie during recent third quarter (Q3) earnings calls. The firm noted that Eli Lilly is unaffected by this round of semaglutide pricing, given its existing agreement with the Trump administration that already defines Medicare rates for Zepbound and Mounjaro. Novo Nordisk said it continues to oppose government-driven price-setting under the Inflation Reduction Act and voiced concerns about how the law is being implemented, according to a Bloomberg report.
CMS Unveils Some Of The Biggest Price Drops
On Wednesday, the U.S. government disclosed sweeping price reductions for Medicare beneficiaries, including a 71% discount off the list prices of Novo Nordisk’s Ozempic and Wegovy. Other major therapies also saw steep cuts, such as Pfizer’s Ibrance by 50% and GSK’s Trelegy Ellipta by 73%. CMS said cuts across all 15 selected drugs range from 38% to 85% compared with 2024 list prices and could generate $12 billion in savings based on last year’s Medicare spending.
Novo Nordisk’s Semaglutide Under Federal Scrutiny
Novo Nordisk’s semaglutide portfolio sits at the center of this year’s Medicare negotiations, reflecting recent challenges of the drugmaker’s GLP-1 franchise. Ozempic and Wegovy helped transform Novo into Europe’s most valuable public company after patients discovered the diabetes shot’s powerful effect on weight loss. However, its momentum has slowed amid intense competition from Eli Lilly’s newer tirzepatide-based treatments and a flood of cheaper compounded copies that surged during earlier supply shortages.
Novo has cut U.S. out-of-pocket prices for Ozempic and Wegovy, teamed up with partners and launched its own NovoCare platform to regain market share. The company is now betting on pipeline upgrades, including a higher-dose Wegovy shot and an oral version of semaglutide, as it navigates federal price pressure and a shift toward aggressively negotiated Medicare rates.
Teva’s Austedo Faces Its Own Negotiation Spotlight
Teva’s Austedo, used for involuntary movement disorders, is also a key focus in the 2027 pricing cycle, with JPMorgan identifying it as one of the most exposed branded therapies. Austedo has been a major growth driver for Teva, helping push branded-drug revenue up 33% in Q3 as the company beat estimates. Teva has also restarted the sale process for its active ingredients business after earlier talks fell through due to geopolitical dynamics around sourcing outside China and India. The company has already negotiated a new price for Austedo with the Centers for Medicare and Medicaid Services under the Inflation Reduction Act, with the updated rate set to take effect in 2027.
A Pivotal Year For Drug Pricing Policy
The 2027 negotiation marks the second pricing cycle under the Inflation Reduction Act and covers drugs used by roughly 5.3 million Medicare beneficiaries in 2024. CMS’ announcement comes as the Trump administration expands a broader cost-containment agenda, including moves to lower Medicaid prices, align U.S. launch prices with those in peer markets, and expand direct-to-patient discount programs.
Stocktwits Draws Bullish Mood For Novo Nordisk
On Stocktwits, retail sentiment for Novo Nordisk was ‘bullish’ on ‘high’ message volume, while Teva saw ‘neutral’ sentiment on ‘normal’ activity.
While Novo Nordisk’s U.S.-listed stock has declined 42% so far in 2025, Teva’s stock has risen 19% over the same period.
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