The BareStory
The market for weight-loss medications is experiencing a new phase of growth, with analysts projecting it could reach $100 billion by the end of the decade. Competition is primarily between Eli Lilly and Novo Nordisk, as both companies work to increase the supply of their injectable drugs and develop oral alternatives. According to projections from McKinsey, between 25 and 50 million patients in the U.S. may be using these GLP-1 drugs by 2030.
Eli Lilly has gained a significant market position, with the company stating during a recent earnings call that it holds nearly 60% of the new prescription share for this class of injectable drugs. An analyst from TD Cowen attributed this to the efficacy and tolerability of Lilly's products. In contrast, Danish pharmaceutical company Novo Nordisk has faced declining sales and a stock price drop of nearly 40% this year, leading it to lower financial forecasts. The company appointed a new CEO, Mark Doustdar, in August and announced plans in September to cut 9,000 jobs.
Novo Nordisk has also experienced internal disruption, with its chair and six other directors resigning. An extraordinary general meeting is scheduled for November 14 to elect a new board. The company is set to release its third-quarter earnings this week. Amid these challenges, Novo Nordisk has pursued acquisitions, including a $9 billion bid for biotech group Metsera and a $5.2 billion offer for Akero Therapeutics. Analyst opinions on Novo's future are divided, with some citing competitive and pricing pressures, while others believe its growth profile is undervalued.
Market expansion is constrained by several factors, including the high cost of the drugs, which is around $1,000 per month, and inconsistent insurance coverage. Medicare does not currently cover the drugs for obesity. Additionally, both companies are taking legal action against suppliers of unauthorized compounded versions of their drugs. In August, Novo Nordisk executives said approximately one million U.S. patients were using these copycat versions. On October 17, U.S. President Donald Trump stated that the price of Novo's drug Ozempic would be "much lower" following negotiations with his administration.
How it may affect me
As a U.S. reader:
• The high cost of around $1,000 monthly and inconsistent insurance coverage may limit patient access, as Medicare currently does not cover these drugs for obesity treatment.
• Drug prices could be impacted by political negotiations, with President Trump stating that the cost of Ozempic would become "much lower" after talks with his administration.
• The use of unauthorized "copycat" drug versions by about one million U.S. patients presents potential safety issues, prompting legal action from manufacturers against their suppliers.
• Competition between drugmakers may affect the future supply and availability of treatments for the projected 25 to 50 million Americans who may use these drugs.
