New weight loss drugs work, but who pays?

After decades of failure, weight-loss drugs seem finally poised to become the newest blockbuster category of big pharma. Bloomberg Intelligence estimates that the market for obesity drugs in the U.S. alone will be $12 billion in 2028. Morgan Stanley Research recently made a much more optimistic prediction, predicting that global sales of obesity drugs could reach $54 billion by 2030.

The enthusiasm is well-deserved. These latest drugs provide deeper and more sustained weight loss than all the drugs that preceded them, and there are many people they can help: According to the U.S. Government Accountability Office, from 2013 to 2016, only 3 percent of people eligible for obesity medication took them.

But these lofty sales goals will only be achieved if medicine can overcome the structural barriers to their use.

The new drugs are usually injections once a week that mimic the gut hormones that regulate satiety. This approach seems to address safety and efficacy concerns in this area. Data on Novo Nordisk's Wegovy, approved in June 2021, and Eli Lilly & Co.'s Mounjaro, expected to be approved next year, suggest that these drugs could help people lose an average of 15-20% of their body weight. We have only sketchy data on AMG 133, Amgen's early-stage weight loss drug, but it has already generated increased interest from investors because they hope it could provide as much or potentially more weight loss as Munjaro when taken once a month. Amgen said this week that people taking the high-dose drug lost an average of about 14.5 percent of their body weight in about three months of the phase 1 study. Full data from that study will be released at a conference early next month.

Such results would make the new drugs 2-3 times more effective than the old diet drugs, which also had a range of side effects, from unpleasant (stool incontinence) to downright dangerous (increased risk of heart attacks or cancer).

People are eager to try new treatments. At last week's obesity conference, experts in the field shared stories of long waits for new patients seeking appointments with weight-loss specialists. The Massachusetts General Hospital Weight Loss Center, for example, has more than 4,000 people on the waiting list, said Fatima Cody Stanford, an obesity physician.

"Demand exceeds workforce capacity," says Robert Kushner, who specializes in obesity treatment at Northwestern Medical Center.

Pharmaceutical companies are also having trouble meeting demand. Lilly is having trouble securing supplies of the drug Mounjaro, even though it is currently approved only for the treatment of diabetes. When the drug receives Food and Drug Administration approval as a treatment for obesity in the second half of 2023, at least one analyst thinks it could quickly become one of the best-selling drugs in industry history. And although Novo Nordisk's Wegovy has been on the market for more than a year, it has been in constant short supply, first because of unexpectedly high demand and then because of manufacturing problems.

Novo expects the supply problem to be resolved by the end of this year, a situation that may finally answer key market questions. For example, the magnitude of demand will become clearer; it is currently complicated by the fact that people are switching to diabetes treatments that use the same ingredients as the weight-loss drugs. And when supply becomes stable, it will be easier to determine how long people will stick with these injections once a week, which will affect how big a blockbuster drug becomes.

But all this enthusiasm assumes that there will be some fundamental problems resolved in this area that may hold back widespread use of these weight-loss drugs.

One of the main problems? Primary care physicians are reluctant to prescribe these drugs. One problem is that today's physicians are generally not trained in obesity management, and some still hold the outdated view that this disease is solely a lifestyle problem, not a medical problem. Until this group becomes more comfortable using these therapies, "I fear that all these advances will remain on the shelf," says Kushner, who consults for Novo Nordisk and led the phase 3 study of the drug Wegovy.

Affordability is also a huge problem. The Wegovy drug costs more than $1,600 per month, and insurance coverage has been uneven. Disparate laws dictate access to weight-loss drugs across the country, making them more affordable in some states than in others. In Massachusetts, for example, private insurers pay for obesity drugs, but Stanford says getting Medicaid to cover drugs for her patients has been difficult. Meanwhile, in Pennsylvania, a bill that would allow drug coverage for state Medicaid recipients has moved closer to passage after years of stalling. And the Medicare program currently eliminates coverage for obesity drugs entirely.

Also worth considering: The story about the long-term safety of this new generation of drugs is still being written. Past experience with weight loss has shown that side effects can appear once the drugs are on the market. This concern is compounded by the fact that the drugs could potentially be used in situations where there is no evidence of efficacy or safety - namely, in people who are not considered medically obese but would like help in shedding pounds.

The demand for these drugs is undeniable. But to meet it-and therefore to achieve high sales projections-will require structural changes in how these drugs are prescribed and insured.

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