Drug pricing has emerged as a key topic to watch for pharmaceutical companies and investors in 2025. As President Donald Trump pushes for lower medicine prices for Americans, the sector is facing additional pricing pressure from a Biden-era law called the Inflation Reduction Act.
The IRA, voted into law in 2022, allows the Centers for Medicare & Medicaid Services (CMS) to negotiate prices for a number of drugs each year for patients in Medicare, the federal health insurance program for seniors. It’s now making waves also across the Atlantic.
While these changes are taking place firmly in the U.S., pharmaceutical companies across the globe are finding themselves increasingly exposed to the American market.
A number of European companies have announced sizeable U.S. investments to placate Trump and his aggressive tariff agenda, while AstraZeneca is moving toward another direct listing on the NYSE to tap into the deeper pockets of U.S. capital markets. Meanwhile, Novo Nordisk has cited a failure to deal with changes in the U.S. market as part of the reason for recent leadership changes.
Late Tuesday, the CMS announced newly negotiated prices for 15 blockbuster drugs from 2027, including Novo Nordisk’s mega bestseller Ozempic which will see a 71% discount to its list price.
Among other European pharma giants, AstraZeneca’s cancer drug Calquence will face a 40% discount, while GSK‘s lung disease medicines Trelegy and Breo with 73% and 83% discount, respectively.
Overall, discounts ranged between 38% and 85%, with estimated savings of about $8.5 billion, 36% lower than recent annual spending.
“Whether through the Inflation Reduction Act or President Trump’s Most Favored Nation policy, this is what serious, fair, and disciplined negotiation looks like,” said CMS Deputy Administrator Chris Klomp 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 critical. “We continue to have serious concerns about the Inflation Reduction Act’s impact on patients and remain opposed to government price setting,” a spokesperson told CNBC in emailed comments. “We have seen that government price setting has not translated to lower out-of-pocket costs for patients and can lead to a loss of coverage for medications and higher insurance premiums,” they added.
A key market
The U.S. is a key market for most large-cap pharma companies, mostly due to the significantly higher prices for branded medicines. In the first nine months of 2025, 56% of Novo’s total sales originated in the U.S. Meanwhile, AstraZeneca logged 42% of product sales in the U.S. and GSK some 52%, over the same period.
Prescription drug prices are about three times higher in the U.S. compared to other wealthy countries, a 2024 report by RAND found.
“The [IRA price] cuts were a little higher than last year, which I think people were expecting,” Barclays analyst Emily Field told CNBC. “It doesn’t seem like there was any surprises at all,” she added.
Muted shares also indicated that the outcome of the negotiations was largely expected. AstraZeneca and GSK rose less than 1% each in afternoon trading.
Novo shares however, ended the day 4.7% higher. Semaglutide, sold as Ozempic for diabetes and Wegovy for weight loss, will from 2027 be priced at $274 for Medicare patients, down from a previous list price of $959. That said, Medicare plans already get large discounts on companies’ list prices, but those rates aren’t typically disclosed.
CMS is due to publish its list of 15 drugs selected for negotiations for 2028 by February 1, 2026.
A Trump priority
The IRA price negotiations are, however, not the main concern for companies, Field said, noting how it’s becoming a better-understood and predictable process. “What people are much more worried about is further directions that MFN could go… if they decide to do something different,” she said.
Trump has made it a priority to rein in U.S. drug costs and in May, signed an executive order to implement so-called Most Favored Nation pricing, meaning U.S. prices would be tied to lower ones paid abroad.
Lower prices in the U.S. could have a dramatic effect on companies’ top and bottom lines, but companies are finding ways to mitigate the impact by making deals with the Trump administration to voluntarily lower certain prices, as well as pledge investments in U.S. manufacturing to avoid tariffs.
Novo, AstraZeneca and GSK shares year to date.
Earlier this month, Trump announced deals with Novo and rival Eli Lilly to slash prices of weight loss drugs for Medicare and Medicaid beneficiaries in 2026, as well as offering them directly to consumers at a discount through the TrumpRx.gov website. Under the agreement, starting doses of Novo’s Wegovy and Lilly’s Zepbound will be $350 per month and trend down to $245 per month over a two years.
While reduced pricing will hit sales, volume gains from opening up broad access for obesity drugs could offset that headwind, BMO analysts noted.
Last week, Novo also announced it is lowering prices of Ozempic and Wegovy to $349 per month from $499 for patients paying out-of-pocket, following pressure from Trump.
Other companies including AstraZeneca and U.S.-based Pfizer have also announced deals with the Trump administration to cut drug prices.
