United States: The demand for weight loss drugs is unlikely to go down in 2024, which skyrocketed in 2023, according to the health experts.
Last year, the advantage that patients could shed weight significantly outweighed drugs’ hefty prices, mixed insurance coverage, and several side effects.
Prospective Market
As the treatment has become more accessible now, its demand is unlikely to fade away any time soon. Some analysts are projecting that the weight loss drug market will be worth US$100 billion by the end of the decade, CNBC reported.
As per Goldman Sachs analysts, 15 million US adults are expected to be on obesity medication by 2030.
Supply Constraints
Dominant players like Novo Nordisk and Eli Lilly have pointed out that the supply constraints are harming their respective treatments. Novo Nordisk’s weight loss injection Wegovy, its diabetes treatment Ozempic, and Eli Lilly’s diabetes injection Mounjaro are among them.
The improvement in supply constraints is expected, but the broader issue will take more time to resolve, as per the analysts, CNBC reported.
More opportunities for the companies in the new year
The approval for expanded use of Novo Nordisk’s Wegovy in the United States and Europe could be won in the coming year. The newly approved weight loss drug Zepbound by Eli Lilly is also looking for more than a billion dollars in sales in its first year on the market.
The new data about potential health benefits of their drugs other than weight loss and diabetes management are also expected to be revealed, which may increase insurance coverage in the future.
More companies are also expected to join the weight loss market, which so far has been the ground for a two-horse race only, CNBC reported.
Pfizer’s and Amgen’s newly released data and the potential collaborations of larger companies and smaller makers of obesity drugs could change the competition scenario in the market in the coming months.
Supply-side issues are likely to persist; here’s why!
Guggenheim analyst Seamus Fernandez said Wegovy, Ozempic, and Mounjaro drugs are likely to be plagued by supply constraints, which will be “the biggest thing” that the investors will watch next year.
According to some analysts, the supply problem is likely to persist for years. However, in 2024, it is expected to be eased down as Novo Nordisk and Eli Lilly are working to expand the manufacturing capacity of their plants, as per a CNBC report.
Novo Nordisk, in November, declared investing US$6 billion in Denmark to expand its manufacturing facilities there, adding it will finish construction from the end of 2025 through 2029. The company is also planning to invest around US$2.3 billion to expand another production site in France. This indicated that the supply will increase significantly in the years to come.
CEO of Eli Lilly – David Ricks, when asked about the company’s future plan to further production buildup for Mounjaro and other drugs, he said that “it’s a problem we work on every day. So we’re not at all happy with the capacity.”
Expected collaboration in coming years
Analysts explained that the larger drugmakers used acquisitions of smaller businesses or partnerships with them to make a space for themselves in the weight loss drug market this year. More companies can enter the field using the same path next year.
Cantor Fitzgerald’s Chen said, “There are a bunch of other large-cap pharma on the list who could do this,” according to CNBC.
Swiss company Roche revealed its plan to buy the privately held US obesity drugmaker Carmot Therapeutics for US$2.7 billion. AstraZeneca signed a licensing agreement with Chinese biotech company Eccogene to develop an obesity pill.
Novo Nordisk and Eli Lilly have also captured smaller obesity drug companies this year to maintain their dominance in the market.
Novo Nordisk said it has increased its focus on “sourcing and elevating external innovation” to broaden its drug pipeline and complement its in-house products, especially for diabetes, obesity, cardiovascular disease, and rare blood disorders.
The company also said that it is interested in the “full range of business development activities,” from acquisitions to partnerships on early or late-stage products, when it comes to companies with new biological drugs, new potential treatment targets, and new mechanisms of action, or how a drug works.