The GLP-1 obesity market is forecast to be worth about $77 billion in the next decade, but the drugs are already having an outsized impact. 

Just ask folks in Novo Nordisk’s native Denmark, where the success of Ozempic and Wegovy has actually bent the trajectory of their country’s GDP and altered its monetary policy.

Nevertheless, Novo and its GLP-1 rival Eli Lilly — who largely have this tremendous market to themselves, for now — face serious questions around the supply, affordability and side effects of their medicines. 

During separate sessions at the J.P. Morgan Healthcare Conference, CEOs from each company addressed these issues and provided incremental data.

Scalability vs. scarcity 

Lilly’s obesity brand Zepbound, whose active ingredient tirzepatide was previously approved for type 2 diabetes under the name Mounjaro, is off to a solid start since being greenlit last year, noted Lilly CEO David Ricks. 

“We need to seize the moment we’re in,” said Ricks.

The Indianapolis-based drug company is focused on establishing the drug as the “marquee name” in weight-loss, he added, through both a smooth roll-out and physician/patient experience. 

Organic demand is a given. Like Novo, Lilly has potent products for obesity and weight loss, although the consensus is that Zepbound is more efficacious.

Supply constraints are the limiting factor here, as seen by the shortages that plagued both companies last year. Mounjaro, entering its second full year of U.S. availability as a type 2 diabetes treatment, endured months of widespread shortages due to its off-label weight-loss effect. 

The drug generated $1.4 billion in third-quarter sales and has access well north of 80% in commercial plans and around 80% including Part D settings, reported Ricks.

Also bit by the supply bug, Novo has been contending with scarcity of both its semaglutide-based drugs, Ozempic for type 2 diabetes and Wegovy for obesity. 

Those treatments combined for a whopping $12.5 billion in sales from January through September. With demand outstripping supply, the Danish company paused some commercial activities around Wegovy’s 2022 launch before shelving national ads last year.

“For us, it’s the first time that we have products where there’s a very significant ‘pull nature’ from the markets,” acknowledged Novo CEO Lars Jørgensen on Tuesday. “Typically when you have to scale up, you would have to invest quite aggressively in sales and distribution to drive the business. That’s different now.” 

Indeed, both companies’ own “push” efforts around who’s a proper candidate for treatment have been eclipsed by viral social media posts from diet-obsessed TikTok creators, name-dropping at the Oscars and questionable marketing by telehealth outfits trading on the drugs’ off-label weight-loss effects.

Judging by the two chief executives’ on-stage demeanor, though, they’re not exactly upset by such factors, even if they’re likely to distance themselves from them.  

“It wasn’t easy for us to control that,” noted Jørgensen, who did say Novo’s own data suggest most Wegovy prescriptions are now “well-aligned with the label,” which calls for a BMI of at least 30.

Novo, he continued, is gradually ramping up manufacturing for its addressable market, which consists of 40 million patients and is growing by 4 million patients a year. 

The company announced plans to build a $6 billion plant to manufacture active pharmaceutical ingredients (API) for GLP-1 and other products. Still, the Denmark-based facility isn’t slated to come online until 2029.

Lilly, for its part, is working to double production capacity for tirzepatide along with diabetes treatment Trulicity. The firm scaled-up its North Carolina factory last year, adding to its capacity to grow the volume of injectables. 

Lilly’s move to launch a once-monthly quick pen for some regions should help, although Ricks warned last month that supply constraints could continue this year. 

Ricks also highlighted that in the future, small-molecule orals, like orforglipron, will be key to supplying the worldwide market. Pills, far easier to make than injectables, could fulfill demand in overseas markets like China, India and Brazil.

Coverage carve-out?

GLP-1 drugs are designed to mimic incretin gut hormones that regulate blood sugar and determine when a person feels full. Despite their strong momentum, however, payer coverage lags.

The medicines typically cost around $1,200 a month, although Zepound is priced 20% less than Wegovy. Medicare and Medicaid are still bound by a 2003 law that considers obesity a lifestyle issue and thus not eligible for reimbursement. Commercial insurers usually follow the lead of the public ones.

Lobbying is well under way to change the law. However, some say that, if the GLP-1 drugs can rack up additional indications, especially for common comorbidities, the pendulum could swing.

As both drugmakers seek to convince insurers that physicians and patients should adopt a weight-centric approach to dealing with disease — and move away from A1C alone — they could actually carve out various coverages.

To that end, a healthy amount of research and development is expected this year. Among trials due to read out are tirzepatide’s Phase 3 cardiovascular outcomes trial, plus late-stage studies for the drug in NASH, sleep apnea and heart failure. 

Ricks noted that Lilly now has the most simultaneously operating Phase 3 studies in its history, with about 110,000 patients enrolled across all its clinical trials. 

Novo, for its part, is expecting readouts for semaglutide in CKD, PAD and results from its cardiovascular outcomes trial. Last year, early results from its SELECT study showed a 20% benefit on all-cause mortality.

What’s been the payer reaction?

So far, “We can have a medical discussion with payers but cannot promote [the outcomes data],” Jørgensen said.

Several other drugmakers lining up for a piece of this market are also due to see data this year, including Pfizer, Amgen, Structure Therapeutics, Viking Therapeutics and Altimmune.

Lilly’s recent move to launch a direct marketing program, LillyDirect, for its diabetes, obesity and migraine drugs could also impact access. The program enables patients to connect with a company that provides telehealth and pharmacy shipping.

Novo could soon follow suit and launch its own direct-to-consumer platform. Eliminating the middleman could obviate the need to pay rebates which, in turn, could lower the price and make it harder for other telehealth players to compete.

A matter of time 

Until now, the GLP-1 wars have largely been a contest of weight loss magnitude, but that narrative is shifting. There are deleterious effects from peak weight loss. 

Patients can lose muscle mass and, if shedding pounds too aggressively, can develop liver and gallbladder problems. Patient discontinuation has been an issue and remains a key question.

Ricks said it was still too early to determine the duration of GLP-1 usage given the length of time Mounjaro and Zepbound have been on the market. Given its supply impact and self-pay issues, Wegovy may not be the best comparator. 

In diabetes, Lilly’s CEO said that Trulicity’s duration has been more than one year. Although he intimated that patients could stay on the drug for less than 12 months, much depends on the individual.

Novo is also still trying to get a handle on this, too, Jørgensen said. With Saxenda, an earlier weight-loss brand which was marketed for diabetes under the name Victoza, the company saw relatively short persistence. 

In Novo’s Wegovy trials, patients lost 15% to 20% of their body weight, with more than one-third dropping  20%, a moment which  “redefined” what’s possible in health, the CEO recalled. 

He said his belief is that this kind of health priority reset will make patients highly motivated to stay on therapy.

“We’ll see higher stay time,” he speculated.

Nor is Jørgensen too worried about new competitors eventually coming down the pike. Each time an efficacious new GLP-1 has come to market, it’s fueled top-line growth in the category. 

“The problem is not competitors,” he said. “It’s awareness of the value of weight loss to overall health.”

For a January 2024 article on five volatile drug launches to watch for in 2024, click here.

For a February 2024 article on Novo Holdings acquires Catalent, click here.