Drug pricing has emerged as a key topic to watch for pharmaceutical companies and investors in 2025. As President Donald Trump pushes to lower drug prices for Americans, the sector is facing increased price pressure from legislation known as the Biden-era Inflation Reduction Act.
The IRA, voted into law in 2022, allows the Centers for Medicare and Medicaid Services (CMS) to negotiate the prices of a number of drugs each year for patients in Medicare, the federal health insurance program for seniors. It is now making waves in the Atlantic as well.
While these changes are certainly taking place in the US, pharmaceutical companies around the world are finding themselves increasingly exposed to the American market.
A number of European companies have announced large US investments to appease Trump and his aggressive tariff agenda, while AstraZeneca moving towards Another direct listing on the NYSE to tap into the deep pockets of US capital markets. Meanwhile, Novo Nordisk cited a failure to deal with changes in the US market as part of the latest reason. Leadership change.
CMS late on Tuesday night announced Newly negotiated prices for 15 blockbuster drugs from 2027, incl Novo Nordisk Mega bestseller Ozampic which will see a 71% discount off its list price.
Among other European pharma giants, AstraZeneca Cancer drug Calquence will face a 40% discount, while GSKLung disease drugs Trelegy and Breo with 73% and 83% discount respectively.
Overall, the discount is between 38% and 85%, with an estimated savings of $8.5 billion, which is 36% less than recent annualized costs.
“Whether through the inflation-reduction legislation or President Trump’s Most Favored Nation policy, this is what looks like a serious, fair and disciplined negotiation,” CMS Deputy Administrator Chris Klomp said in a statement.
A GSK spokesperson said they were pleased with the agreement. “We strongly believe in the value of both Trelegy and Breo and remain committed to working with CMS.”
Novo, on the other hand, was serious. “We continue to have serious concerns about the impact of the inflation reduction legislation on patients and oppose government price setting,” a spokesperson said in emailed comments to CNBC. “We have seen that government price setting has not reduced out-of-pocket costs for patients and may lead to lost coverage for drugs and higher insurance premiums,” they added.
main market
The US is a key market for most large-cap pharma companies, largely because of the significantly higher prices of branded drugs. In the first nine months of 2025, 56% of Novo’s total sales originated in the US, while AstraZeneca accounted for 42% of product sales in the US and GSK about 52%, during the same period.
A 2024 report by RAND found that prescription drug prices are nearly three times higher in the US than in other wealthy countries.
“The (IRA price) cut was a little higher than last year, which I think people expected,” Barclays analyst Emily Field told CNBC. “It doesn’t seem like there were any surprises,” she added.
Muted stocks also suggested the outcome of the talks was largely expected. AstraZeneca and GSK were up less than 1% in afternoon trading.
Novo shares, however, ended the day 4.7% higher. Semaglutide, sold as Ozempic for diabetes and Vegovi for weight loss, will cost $274 for Medicare patients starting in 2027, down from the previous list price of $959. That said, Medicare plans already get big discounts on companies’ list prices, but those rates aren’t usually disclosed.
CMS is scheduled to publish its list of 15 drugs selected for negotiation for 2028 by February 1, 2026.
Trump’s priority
IRA price negotiations, however, are not a major concern for companies, Field said, given how it is becoming a better understood and predictable process. “People are more concerned that MFN could go in different directions… if they decide to do something different,” she said.
Trump has made reining in US drug spending a priority and signed an agreement in May Executive Order To implement so-called most favored nation pricing, meaning US prices would be tied to lower prices paid abroad.
Lower prices in the U.S. could have a dramatic impact on companies’ top and bottom lines, but companies are finding ways to mitigate the impact by voluntarily agreeing with the Trump administration to lower some prices, as well as invest in U.S. manufacturing to avoid tariffs.
Novo, AstraZeneca and GSK share the year to date.
Trump made the announcement earlier this month deals Novo will join forces with rival Eli Lilly in 2026 to lower the price of weight-loss drugs for Medicare and Medicaid beneficiaries, as well as to offer discounts directly to consumers through the TrumpRx.gov website. Under the agreement, starting doses of Novo’s Wegovi and Lilly’s Zepbound will be $350 per month and trend up to $245 per month over two years.
BMO analysts noted that lower prices will hurt sales, while volume gains from opening up wider access to obesity drugs could offset those headwinds.
last weekNovo also announced that it is lowering the price of Ozempic and Vegovi from $499 to $349 per month for patients paying out of pocket following pressure from Trump.
AstraZeneca and other companies, including those based in the US Pfizer It has also announced a deal with the Trump administration to lower drug prices.