What’s subsequent for the burden loss drug market: drugs, rivals, insurance coverage

The urge for food for blockbuster weight reduction and diabetes medicine is much from glad. 

From contemporary competitors to new makes use of, the market is rapidly vaulting into a brand new stage of development. However elements together with insurance coverage protection, pricing, copycat medicine and the event of new drugs will finally decide how far the therapies will attain.

Eli Lilly and Novo Nordisk are nonetheless the dominant gamers, as demand for his or her weekly injections exhibits few indicators of slowing. Eli Lilly has pulled forward available in the market, saying throughout its third-quarter earnings name on Thursday that it gained share for the fifth consecutive quarter and that its medicine account for practically 6 out of 10 prescriptions inside the injectable weight problems and diabetes class.

However each companies are targeted on ramping up provide, testing new makes use of for his or her medicines and bringing the subsequent wave of weight problems medicine to sufferers, together with extra handy drugs. 

Behind them is a slate of drugmakers – from biotech upstarts to pharma giants – racing to win a slice of what some analysts count on may very well be a roughly $100 billion market by the top of the last decade. There could also be loads of room for brand new entrants: McKinsey initiatives that 25 million to 50 million U.S. sufferers might use GLP-1s by 2030. 

Practically each main pharmaceutical firm has wager on weight problems medicine, typically by way of offers with smaller builders, together with companies based mostly in China. Whereas some experimental medicine are additional alongside than others, all are probably years away from hitting the market, and their aggressive potential will depend upon future information displaying their effectiveness and the way properly sufferers tolerate them.

As competitors heats up, many sufferers are nonetheless struggling to entry the medicine. Some insurers, together with Medicare, do not cowl GLP-1s for weight problems, which may value roughly $1,000 per 30 days earlier than rebates.

Eli Lilly and Novo Nordisk have rolled out low cost packages for cash-paying sufferers to shut the hole, and extra employers are providing protection as GLP-1s show their added well being advantages like treating obstructive sleep apnea and continual kidney illness in addition to slashing cardiovascular dangers.

Nonetheless, some sufferers proceed to make use of cheaper, copycat variations of branded therapies – despite the fact that these options are restricted in lots of instances. Whereas Novo Nordisk and Eli Lilly’s medicine are now not in scarcity, each corporations are cracking down on pharmacies, medspas and different suppliers that mass-produce and market cheaper compounded GLP-1s.

Whereas new rivals and lower-cost drugs might permit medicine to succeed in extra sufferers, entry will largely depend upon how corporations like Novo Nordisk and Eli Lilly select to cost their medicine within the years forward.

This is what to know in regards to the state of the booming weight reduction drug market. 

Eli Lilly has taken the lead within the injectable GLP-1 market. As soon as the frontrunner, Novo Nordisk misplaced floor, significantly within the U.S., after provide chain points, Eli Lilly’s emergence and the unfold of compounded choices.

Eli Lilly eclipsed its Danish rival for the primary time in Could, when it secured 53% of the market through the first quarter. In August, Eli Lilly stated its share rose to 57% through the second quarter.  

TD Cowen analyst Michael Nedelcovych stated that is largely as a result of Eli Lilly’s injections are superior to Novo Nordisk’s medicine by way of security and efficacy. Eli Lilly’s diabetes drug Mounjaro is considered as a greater therapy than Novo Nordisk’s Ozempic, he famous. Actual-world information and a head-to-head scientific trial have proven that Eli Lilly’s weight problems injection Zepbound results in extra weight reduction than Novo Nordisk’s Wegovy.

“It is higher efficacy, and at the very least anecdotally in real-world practices, it is higher tolerability,” Nedelcovych stated. “In our enterprise, that is often all that is required for share beneficial properties, and I believe we’re seeing that play out in a short time.” 

Buyers have unloaded Novo Nordisk’s inventory, which has fallen nearly 40% this 12 months. Novo Nordisk minimize its revenue and gross sales forecast in July, saying compounded medicine had minimize into Wegovy’s market. The corporate had already lowered its 2025 outlook in Could.

As competitors mounts, information on Novo Nordisk’s experimental medicines additionally underwhelmed Wall Avenue and raised issues in regards to the development of its drug portfolio past Wegovy and Ozempic. 

In a observe in September, BMO Capital Markets analyst Evan Seigerman stated the corporate raised expectations too excessive for its next-generation weight problems drug CagriSema, was sluggish to launch direct-to-consumer gross sales of its standard medicine and had a “tepid preliminary response” to compounders promoting copycat therapies. 

What’s extra, Medicare is negotiating the worth of Novo Nordisk’s semaglutide – the energetic ingredient in Ozempic, Wegovy and the corporate’s diabetes tablet Rybelsus – efficient in 2027, which might additional minimize into income. Eli Lilly’s tirzepatide, the energetic ingredient in Mounjaro and Zepbound, probably will not be topic to cost discussions till the top of the last decade. 

Novo Nordisk is betting its new CEO, Mike Doustdar, will assist it regain its footing. He took the helm in late July after the board ousted former prime government Lars Fruergaard Jorgensen. 

Doustdar is not losing any time to make adjustments: Novo Nordisk in September introduced plans to chop round 9,000 roles, or roughly 11.5% of its world workforce.

There may be nonetheless turbulence on the pharmaceutical big. On Tuesday, Novo Nordisk stated a number of board members will step down after clashing with the controlling shareholder, the Novo Nordisk Basis, on the make-up of the board.

Novo Nordisk nonetheless faces one other main problem: the persistence of cheaper, compounded variations of semaglutide. 

The corporate for now “is unquestionably rather more weak” to competitors from copycats than Eli Lilly is, largely as a result of most of them include or declare to be semaglutide, stated Cowen’s Nedelcovych. He added that Novo Nordisk is “already on its again foot” available in the market, so it may well’t afford to lose extra share.

Sufferers flocked to compounded GLP-1s when branded injections have been in brief provide during the last two years, or not lined by their insurance coverage.

Compounding is a apply the place pharmacies combine components of a drug to create a specialised model tailor-made to a affected person’s particular wants, resembling these with allergy symptoms to sure components. When a branded drug is in brief provide, pharmacies are allowed to make bigger portions of compounded variations to assist fill the hole.

However Novo Nordisk and Eli Lilly have each invested billions to extend manufacturing capability for his or her injections, which has already began to repay. 

The FDA declared an finish to the shortages of tirzepatide and semaglutide during the last 12 months. These choices legally barred compounding pharmacies from making and promoting copycats of these medicine by deadlines that handed earlier this 12 months, besides in uncommon instances the place it is medically mandatory. 

Novo Nordisk in June stated some mass, so-called 503B compounding pharmacies have scaled again manufacturing, however accused others — together with these tied to Hims & Hers — of constant to promote the medicine beneath the “false guise” of personalization. In August, Novo Nordisk executives famous that round 1 million U.S. sufferers are taking compounded GLP-1s.

The difficulty additionally plagues Eli Lilly. Whereas the FDA regulates 503B pharmacies, most 503A websites fall beneath state oversight. Nedelcovych likened shutting them right down to “a case of whack-a-mole.” Eli Lilly and Novo Nordisk’s lawsuits in opposition to telehealth corporations, pharmacies and others since 2023 have consumed time and sources, with blended authorized outcomes.

The FDA additionally would not seem like taking an aggressive stance on compounded GLP-1s: The company in September revealed a “inexperienced listing” of imported GLP-1 drug components deemed protected to let into the nation. 

Restricted insurance coverage protection for GLP-1s is obstructing out sufferers who cannot afford their roughly $1,000 month-to-month value tags. That entry hole has grow to be a political and company flashpoint, with strain mounting on employers and the federal government to broaden protection.

Many well being plans, together with Medicare, cowl GLP-1s for the therapy of diabetes however not weight problems. Medicaid protection of weight problems medicine is sparse and varies by state, in accordance with well being coverage analysis group KFF. 

Protection for GLP-1s for weight problems has ticked up barely: A Could survey of greater than 300 corporations by the Worldwide Basis of Worker Profit Plans, or IFEBP, discovered that 36% offered protection for GLP-1s for each weight reduction and diabetes, up from 34% in 2024. 

Nonetheless, many employers and well being plans stay hesitant as a consequence of excessive prices. In 2025, weight-loss GLP-1s accounted for a median of 10.5% of complete annual claims amongst employers, up from 8.9% in 2024 and 6.9% in 2023, IFEBP discovered.

“If employers weren’t already on board earlier than, they’re nonetheless ready,” stated Julie Stich, vp of content material at IFEBP. “The price subject continues to be a serious, main subject for them.”

Some plans are involved that sufferers will not keep on the medicine long run as a consequence of gastrointestinal negative effects, resembling nausea and vomiting, and will regain the burden they misplaced, stated John Crable, senior vp of Company Synergies, a nationwide insurance coverage and worker advantages brokerage and consultancy. Employers, which may expertise excessive turnover, are additionally hesitant to cowl pricey medicine for staff who could go away the corporate inside a couple of years, Crable added.

Crable added that new direct-to-consumer packages from Eli Lilly and Novo Nordisk — which let sufferers pay money for therapies at lower than half their month-to-month listing value — might also discourage employer protection.

Sew stated employers even have questions on how oral weight problems medicine, which may very well be accessible as quickly as 2025, might have an effect on demand and prices.

However she stated protection might nonetheless develop, particularly as GLP-1s acquire new approvals for extra continual situations. Wegovy is cleared for decreasing cardiovascular danger and fatty liver illness, whereas Zepbound is authorised for sleep apnea.

Novo Nordisk can also be testing semaglutide in Alzheimer’s, with preliminary late-stage trial outcomes anticipated this 12 months. If that examine exhibits that GLP-1s cut back the danger of cognitive decline, “it might give a giant enhance” to Novo Nordisk and Eli Lilly as a result of it might encourage sufferers to remain on them longer, stated Leerink Companions analyst David Risinger.

“You are paying for the GLP-1 drug with the hope that weight problems or these different situations will enhance, in order that health-care prices for these particular person staff will get higher as you progress ahead,” Stich stated.

Some plans have additionally launched value controls, like BMI thresholds, to handle spending.

Stich added that broader Medicare protection might ultimately drive non-public insurers to comply with go well with. The Trump administration plans to pilot protection of weight reduction medicine beneath Medicare and Medicaid, which might broaden entry to hundreds of thousands of older Individuals, the Washington Publish reported in August.

Whereas Novo Nordisk already sells an oral GLP-1 for diabetes, the corporate and Eli Lilly might quickly convey drugs particularly for weight reduction to sufferers.

Some consultants and analysts imagine they may essentially shift the market, serving to extra sufferers entry therapy and assuaging the availability shortfalls of present injections. However others elevate questions on how a lot of a task drugs will play within the house provided that some seem like much less efficient than injections and produce better negative effects.

Novo Nordisk’s 25-milligram oral semaglutide might win approval for weight problems by the top of the 12 months, which might make it the primary needle-free various for weight reduction in the marketplace. The each day tablet seems to be barely more practical than a competing oral GLP-1 from Eli Lilly known as orforglipron, based mostly on information from separate section three trials. 

Nonetheless, Eli Lilly’s tablet might have a couple of notable benefits. Each medicine work by mimicking the GLP-1 intestine hormone to suppress urge for food and regulate blood sugar. However whereas Novo Nordisk’s tablet is a peptide treatment, orforglipron is a small-molecule drug.

Which means Eli Lilly’s therapy is absorbed extra simply within the physique and would not require dietary restrictions like Novo Nordisk’s does. Some analysts say orforglipron may even be simpler to fabricate at scale than Novo Nordisk’s, which is essential as demand for weight problems and diabetes injections outpaces provide. In August, Eli Lilly CEO David Ricks advised CNBC the firm hopes to launch its tablet globally “this time subsequent 12 months.” 

In an August observe, Goldman Sachs analysts forecast each day oral drugs will seize 24% share — or round $22 billion — of the 2030 world weight reduction drug market, which they count on to be value $95 billion. 

The Goldman analysts stated they count on Eli Lilly’s tablet to have a 60% share — or roughly $13.6 billion — of the marketplace for each day oral therapies in 2030. They count on Novo Nordisk’s oral semaglutide to have a 21% share — or round $4 billion — of that section. The remaining 19% slice will go to different rising drugs, the analysts stated.

TD Cowen’s Nedelcovych stated he has been “treading type of cautiously” in his outlook for oral weight reduction medicine. He stated that is partly as a result of doctor consultants and different consultants imagine injections, that are more practical and simpler to tolerate than drugs, will dominate the marketplace for the foreseeable future. 

Nedelcovych stated the comfort of a once-daily tablet will not be sufficient to persuade sufferers to modify, since a few of them “actually do not thoughts” taking an injection as soon as per week. Nedelcovych added that really fizzling out injections and switching to drugs as a upkeep routine “additionally would not appear to make a ton of sense, once we ask physicians about it.” 

He stated if drugs are much less efficient at selling weight reduction, it raises issues that sufferers who initially lose vital weight on an injection might acquire some again after switching to an oral drug.  A section three examine from Eli Lilly, which is finding out orforglipron’s capability to keep up weight reduction, will convey extra readability on that subject. 

Firms have stated that drugs might attain sufferers who do not take injections as a result of they’re afraid of needles. However Nedelcovych stated the “destiny of oral weight reduction therapies might actually revolve” round one other class of individuals: sufferers who may gain advantage from weight reduction therapies however do not take injections as a result of they imagine they’re meant for these with critical illnesses.

“They’re actually simply invisible to {the marketplace} proper now,” he stated. “However they may have completely different views about an oral remedy, which may very well be thought of extra like a vitamin so they’d be extra amenable to taking that.” 

The query prime of thoughts for well being consultants is how corporations will value the drugs. 

“If it wasn’t for the truth that they are often made extra cheaply, I would not care” about drugs, stated Dr. Caroline Apovian, co-director of the Heart for Weight Administration and Wellness at Brigham and Ladies’s Hospital.

The direct-to-consumer platforms from Eli Lilly and Novo Nordisk supply Zepbound and Wegovy for roughly $500 a month. She stated much less efficient drugs with extra negative effects must be priced decrease than that if corporations need health-care suppliers to prescribe them first over injections. 

It is nonetheless unclear who would be the subsequent viable participant to enter the burden loss drug house. Many experimental medicine from different corporations could not attain sufferers till the top of the last decade. 

Nonetheless, some drugmakers have made strides during the last 12 months and a half, inking offers with weight problems biotechs or releasing promising information on experimental therapies. A number of corporations try to drive innovation with new medicine that promote weight reduction in another way, are taken much less ceaselessly or protect muscle mass, amongst different adjustments. 

Some traders are wanting to see a drug that promotes much more weight reduction than Wegovy and Zepbound, which has hit these corporations’ shares when their therapies do not meet lofty expectations in scientific trials. However some well being consultants say many sufferers needn’t lose greater than 20% of their weight. 

“I’m not even on the lookout for better weight reduction anymore. What’s fallacious with 16% and 22% weight reduction? Nothing, proper?” stated Apovian, referring to the degrees of weight reduction seen with some present and experimental medicine. 

Apovian stated she is on the lookout for therapies that focus on new intestine hormones, which might tackle sufferers who could not drop a few pounds on GLP-1s. She pointed to medicine concentrating on amylin analogs – an rising type of weight reduction therapy that mimics a hormone co-secreted with insulin within the pancreas to suppress urge for food and cut back meals consumption.

A number of drugmakers, together with Novo Nordisk and Eli Lilly, are betting on amylin analogs as a part of the subsequent wave of weight problems therapies

Different consultants have stated that a super competitor would promote weight reduction whereas being simpler to tolerate than present injections. That is as a result of many individuals discontinue these injections – and will not expertise the complete well being advantages – as a consequence of gastrointestinal negative effects resembling nausea and vomiting. 

With out late-stage trial information on any of the brand new rivals, it is too early to say who will be capable to tackle that subject.

Some medicine are a lot nearer to answering that query than others. 

For instance, Amgen in March stated it has began two essential late-stage trials for its experimental weight reduction injection MariTide, which is designed to be taken month-to-month and even much less ceaselessly and promotes weight reduction in another way from rivals. 

In a mid-stage examine, sufferers with weight problems taking MariTide misplaced as much as 16.2% of their weight in a single 12 months when analyzing all members no matter discontinuations, or as much as 19.9% when solely analyzing those that stayed on the therapy. However sufferers skilled a excessive price of negative effects and discontinuations within the trial. 

These outcomes assist the corporate’s resolution to make use of a slower dosing schedule over eight weeks to make the drug extra tolerable in section three research. 

Some pharmaceutical corporations have turned to China for his or her weight problems bets. For instance, Merck in December snagged the rights to an early-stage experimental GLP-1 tablet from Chinese language drugmaker Hansoh Pharma, in a deal value as much as $2 billion. 

That acquisition and different smaller gamers raised questions in regards to the destiny of public U.S.-based weight problems biotechs resembling Viking Therapeutics, which have been as soon as seen as sizzling takeover targets. Some analysts argue that their experimental medicine, most of that are nonetheless in mid-stage improvement, haven’t differentiated themselves sufficient from present therapies. 

“Except and till these molecules present that they honestly are differentiated in section three, I do not suppose there’s actually a cause for given pharma to put out a big transaction to achieve entry to it,” stated TD Cowen’s Nedelcovych. 

He stated the “clearest path ahead” for U.S.-based weight problems biotechs is probably going inking partnerships with bigger companies to develop and commercialize their medicine.

However Nedelcovych famous that “there actually aren’t too many massive pharmas who aren’t already spoken for at this level.”