Drug pricing has emerged as an important topic for pharmaceutical companies and investors to focus on in 2025. As President Donald Trump pushes to lower drug prices for Americans, the sector faces further price pressure from a Biden-era law called the Inflation Control Act.
The IRA, passed into law in 2022, will allow the Centers for Medicare and Medicaid Services (CMS) to negotiate the prices of many drugs each year for patients in Medicare, the federal government’s health insurance program for seniors. It’s now sending ripples across the Atlantic.
While these changes are steadily occurring in the United States, pharmaceutical companies around the world are becoming increasingly exposed to the U.S. market.
While a number of European companies have announced big U.S. investments to appease Trump and his aggressive tariff policies, AstraZeneca is moving toward a direct listing on the New York Stock Exchange to tap into the deeper funds of the U.S. capital market. Novo Nordisk, meanwhile, cited a failure to adapt to changes in the U.S. market as part of the reason for recent management changes.
Late Tuesday, CMS announced newly negotiated prices for 15 blockbuster drugs starting in 2027. novo nordisk Get 71% off list price on the best-selling Ozempic.
Among Europe’s major pharmaceutical companies, AstraZeneca’s The anti-cancer drug Calquence will receive a 40% discount. GSK‘s lung disease drugs Trelegy and Breo are being offered at 73% and 83% off, respectively.
Overall, discounts ranged from 38% to 85%, with estimated savings of approximately $8.5 billion, 36% less than recent annual spending.
“Whether it’s through the Inflation Control Act or President Trump’s Most Favored Nation policy, this is what serious, fair and disciplined negotiations look like,” CMS Deputy Secretary Chris Klomp said in a statement.
A GSK spokesperson said the company was 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 impact of the Inflation Control Act on patients and continue to oppose the government’s pricing policy,” a spokesperson told CNBC in an emailed comment. “We have seen that government pricing is not leading to lower out-of-pocket costs for patients, potentially leading to loss of drug coverage and higher premiums,” they added.
major market
The United States is an important market for most large pharmaceutical companies, primarily because of significantly higher prices for branded drugs. During the first nine months of 2025, 56% of Novo’s total sales were generated in the United States. Meanwhile, during the same period, AstraZeneca accounted for 42% of its product sales in the United States, and GSK accounted for approximately 52%.
RAND’s 2024 report found that prescription drug prices in the United States are nearly three times higher than in other wealthy countries.
“The reduction (in IRA prices) was a little higher than last year, but I think people were expecting that,” Barclays analyst Emily Field told CNBC. “There didn’t seem to be any surprises,” she added.
The slump in stock prices also showed that the outcome of the negotiations was largely expected. AstraZeneca and GSK each rose less than 1% in afternoon trading.
However, Novo shares closed 4.7% higher. Semaglutide, sold as Ozempic as a diabetes drug and Wegovy as a weight loss drug, will be available for Medicare patients starting in 2027, dropping to $274 from its previous list price of $959. That being said, Medicare plans already receive significant discounts from companies’ list prices, but those rates are typically not disclosed.
CMS plans to publish a list of 15 drugs selected for negotiation in 2028 by February 1, 2026.
President Trump’s priorities
But Field said IRA price negotiation is not a primary concern for companies, noting that IRA price negotiation is becoming a more understood and predictable process. “What people are more concerned about is the possible future direction of MFN if they decide to do something different,” she said.
President Trump has made it a priority to contain U.S. drug costs, and in May he signed an executive order implementing so-called most-favoured nation prices. This means that US prices are linked to lower prices paid overseas.
Lower prices in the U.S. can have a dramatic impact on companies’ revenues and profits, but companies are looking for ways to mitigate the impact by striking deals with the Trump administration to voluntarily reduce certain prices or pledging to invest in U.S. manufacturing to avoid tariffs.
Novo, AstraZeneca and GSK shares year-to-date.
Earlier this month, President Trump announced a deal with Novo and rival Eli Lilly to lower the price of weight-loss drugs for Medicare and Medicaid recipients in 2026 and offer them at discounted prices directly to consumers through the TrumpRx.gov website. Under the agreement, starting doses of Novo’s Wegovy and Lilly’s Zepbound will cost $350 per month, trending down to $245 per month over two years.
Analysts at BMO said the price cuts would hurt sales, but higher volumes from opening up broader access to obesity drugs could offset the headwinds.
Last week, under pressure from President Trump, Novo announced it would lower the price of Ozempic and Wegoby from $499 to $349 per month for patients who pay out of pocket.
AstraZeneca and other US-based companies pfizer It also announced an agreement with the Trump administration to lower drug prices.
