By Josh Nathan-Kazis

Medicare will soon start paying lower prices for Novo Nordisk's weight- loss drug Wegovy and its Type 2 diabetes treatment Ozempic, the federal agency that manages the program said Friday.

The announcement confirms the long-anticipated inclusion of the blockbuster Novo medicines among 15 additional drugs whose prices Medicare will be allowed to negotiate with drugmakers.

The negotiations will happen this year, though the prices won't go into effect until 2027.

Analysts and investors had understood that Ozempic and Wegovy would appear on the negotiation list. Novo's American depositary receipt was down 4.1% early Friday, but the dip seemed likely in response to an unrelated announcement about data from a continuing trial of Wegovy.

The negotiations are enabled by the Inflation Reduction Act, which President Joe Biden signed in 2022, and which for the first time allowed Medicare to haggle over prices with drugmakers. The Centers for Medicare and Medicaid Services negotiated lower prices for 10 drugs last year to go into effect in 2026.

The new list includes Ozempic, Wegovy, and another Novo drug called Rybelsus. All three are different brand names under which Novo sells the medicine semaglutide.

Other drugs on the new list include a GSK asthma inhaler called Trelegy Ellipta, and Pfizer cancer drugs Xtandi and Ibrance.

Eligibility for the list is based on how long the medicines have been on the market, and how much the Medicare Part D prescription drug benefit spends on them, among other factors.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

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January 17, 2025 08:45 ET (13:45 GMT)

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