Investing.com -- Shares of Novo Nordisk (NYSE:NVO) fell 3.6% on Friday after the U.S. Department of Health and Human Services (HHS) announced that Ozempic and Wegovy are among 15 medications selected for Medicare price negotiations under the Inflation Reduction Act.
The stock price decline extends the sell-off, with Novo Nordisk down over 24% already in 2025 and over 39% in the last six months.
The HHS announcement marks the second cycle of negotiations aimed at lowering costs for some of the most expensive prescription drugs.
The negotiations will take place this year, with the new prices set to take effect in 2027. The 15 drugs accounted for approximately $41 billion in total gross covered prescription drug costs under Medicare Part D between November 2023 and October 2024.
“Today’s announcement is pivotal,” said HHS Secretary Xavier Becerra. “The Inflation Reduction Act is lowering prices for people on Medicare. HHS will continue negotiating in the best interest of people with Medicare to have access to innovative, life-saving treatments at lower costs.”
The Medicare Drug Price Negotiation Program aims to improve access to costly drugs while saving billions of dollars.
CMS Administrator Chiquita Brooks-LaSure highlighted the importance of this initiative, stating, “The next cycle of negotiations will continue to strengthen Medicare for generations to come.”
Novo Nordisk's Ozempic and Wegovy have been major growth drivers for the company, and their inclusion in the negotiations could pressure future revenues.