With the emergence of GLP-1 RA therapies the obesity drug market has taken off and stands to be worth some USD 125.3 billion by 2033. Eli Lilly and Novo Nordisk may lead the charge, but other contenders are looking to get a piece of this lucrative market as the two frontrunners struggle with supply and reimbursement.

 

Leaders and Aspiring Competitors

Between 1975 and 2022 the global prevalence of obesity more than tripled, making it one of the world’s most pressing health issues. Pharma companies have been developing drugs for obesity and its contingent health issues for years, but weight-loss drug development saw a turning point with the advent of a new kind of therapy: glucagon-like peptide-1 receptor agonists (GLP-1 RAs).  Able to mimic the blood sugar-regulating hormone glucagon-like peptide 1 (GLP-1), these drugs help patients feel fuller for longer and lose weight.

While Novo Nordisk and Eli Lilly dominate the market with their blockbuster treatments Wegovy and Zepbound, other pharma giants are aggressively pursuing alternatives. Roche’s pill-based weight-loss drug CT-388  that came out of its USD 2.7 billion acquisition of Carmot Therapeutics has seen promising results.  Pfizer, after dropping two candidates due to adverse effects, continues to develop its once-daily danuglipron therapy and got positive readouts from an early-stage trial. AstraZeneca in turn paid some USD 2 billion for an experimental therapy from China’s Eccogene.

Biotechs have also jumped into the weight loss game with Amgen advancing its MariTide monthly injection that aims to help patients maintain a healthy weight even after treatment. Other entrants in the field include Danish biotech Zealand Pharma who in partnership with Boehringer Ingelheim is working on therapies that mimic other hunger-regulating hormones. Viking Therapeutics presented promising data from a mid-stage trial of its VK2735 earlier this year that suggested the ability to outperform both Novo and Lilly’s drugs. Other companies pushing candidates forward include Altimmune, Terns Pharmaceutical and Structure Therapeutics.

Perhaps anticipating a new wave of competing therapies, Novo and Lilly are also continuing their work on obesity and diabetes, refining their existing therapies and developing new ones.

 

Manufacturing Bottlenecks

Victims of their own success, Novo and Lilly’s weight loss therapies have seen their booming demand outstrip supply, leading to chronic ongoing shortages. Both companies have pledged huge investments to ramp up production but insufficient supply is expected to continue into 2025. To meet the demand Novo has acquired its subcontractor Catalent for USD 16.5 billion and announced a USD 4.1 billion investment to expand its manufacturing capacity with a new plant in Clayton, North Carolina. Eli Lilly on the other hand has set out an investment of USD 5.3 billion in its Indiana site and USD 1.8 billion in its manufacturing facilities in Ireland.

CDMOs are also playing their part in meeting the exploding demand. Because these therapies rely on peptides – short chains of amino acids that act as signalling molecules in the body – which mimic the hormones that regulate appetite and metabolism, peptide manufacturing is also thriving. “In recent years, the use of peptides for medicines has experienced a transformative shift, evolving from a niche sector to an independent and vital therapeutic modality,” said Thomas Meier, CEO of Swiss CDMO Bachem. “These [weight loss] therapies are seeing rapid adoption and are projected to experience substantial growth, solidifying them as a driving force within the peptide market. For Bachem, as well as the broader CDMO sector, this trend represents a significant opportunity to support and scale alongside the rising demand for peptide-based treatments.”

 

Reimbursement Challenges

The new weight-loss treatments may look like wonder drugs with their ability to reduce body fat by as much as 15 to 21 percent, but they do present problems, namely they are expensive for healthcare systems who often view obesity as a lifestyle issue. Additionally, they must continue to be taken in order to be effective.

These factors have made the road to reimbursement rocky with many countries, including Germany, France, and Denmark, reluctant to cover weight loss therapies. Novo Nordisk’s Wegovy, sold in Germany since last year, is only available to privately insured patients or those who can afford the EUR 302 out-of-pocket monthly dose fee. In France, the national insurance programme has refused coverage and recommends Wegovy only as a second-line treatment.

The UK health service recommends taking these drugs for no more than two years and will not cover them for longer, even though patients stand to regain weight once they stop taking them. In the Netherlands, a government advisory group for the country’s health insurance plan warned of “major uncertainties” about Wegovy’s long-term effects and that it could cost the country EUR 1.3 billion per year.

These concerns have not stopped the weight loss leaders from continuing to expand their markets and Eli Lilly and Novo Nordisk have both received the go ahead to launch in China while Novo has indicated that it may offer flexible pricing options to convince more countries.

 

Access Hurdles and Misuse

Shortages and elevated pricing have led to access issues for many patients. The American patient advocacy group Obesity Action Coalition (OAC), advocates for accessibility and affordability while encouraging pharmaceutical companies to increase production to meet demands. “Even though medications like Wegovy (semaglutide) and Zepbound (tirzepatide) demonstrate remarkable effectiveness, frustration exists on accessing such Food and Drug Administration (FDA)-approved treatments due to medication shortages, lack of insurance coverage and high out-of-pocket costs,” read a statement from the group.

The lack of supply has given rise to the proliferation of compounded versions of semaglutide and tirzepatide, or reformulated versions the FDA has allowed pharmacies to distribute during shortages of the brand-name products. The OAC has warned against these versions, claiming that they “are not what they are advertised to be.” The FDA has also said that “patients should be aware that some products sold as ‘semaglutide’ may not contain the same active ingredient as FDA-approved semaglutide products and may be the salt formulations.”

Another concern is arising not just from shortages, but from the hype these therapies have generated. Promoted as a easy solutions for those looking to shed a few extra pounds, black market websites and social media accounts are selling elicit “versions” of weight loss treatments to people who would not necessarily get a prescription for them from doctors. “These are powerful medications that have side-effects and complications – and can in certain circumstances, be dangerous,” said Professor Stephen Powis, the UK NHS’s national medical director, expressing concern over misuse. “They need to be used under medical supervision. They are absolutely not quick fixes for those who are otherwise healthy, who just want to lose a few pounds.”