JPMorgan views Medicare price cuts as inline with expectations

JPMorgan views the Centers for Medicare and Medicaid Services’ announced negotiated maximum fair prices in Medicare for the 15 drugs selected for 2027 Inflation Reduction Act price negotiations as implying 35%-40% net price cuts for the products included. This is roughly inline with JPMorgan’s assumption for modestly greater cuts versus the previous cycle of 20%-25%, and in-line with Q3 commentary from Novo Nordisk (NVO), Teva (TEVA) and AbbVie (ABBV), the analyst tells investors in a research note. The firm says the focus of this round of negotiations centered on Novo’s semaglutide and Teva’s Austedo. As it relates to Eli Lilly (LLY), the firm does not see any read-through from the semaglutide maximum fair price at this point given that Lilly’s recent deal with the Trump administration provides for known Zepbound and Mounjaro prices in Medicare.