BREAKINGVIEWS-Obesity drugs for everyone is a double-edged sword

By Aimee Donnellan

DUBLIN, May 29 (Reuters Breakingviews) - Obesity drug benefits may go far beyond their label. The treatments pioneered by Novo Nordisk NOVOb.CO and Eli Lilly LLY.N may help prevent diseases like cancer. A wider application sounds like a boon for the two drug giants, but they may not be the only beneficiaries.

Every week it appears GLP-1s, the class of drug that includes Novo Nordisk’s Ozempic and Wegovy, as well as Eli Lilly’s Zepbound and Mounjaro, show a new unexpected benefit. Last week, a study suggested Ozempic helped prevent colorectal cancer. Novo Nordisk is also testing whether the same medication can cut the risk of Alzheimer’s disease. Eli Lilly is testing whether tirzepatide, the active ingredient in Mounjaro, can slow the progression of kidney disease.

Scientists are still discovering new ways in which the GLP-1s work. Originally designed to regulate insulin production, they later emerged as powerful appetite suppressors. But they also reduce inflammation, which can be factor in obesity-related cancers and lead to cognitive decline. This raises the possibility of a much larger patient population: Roughly 15 million Americans currently take the drugs for diabetes or obesity, but that’s still only half the number of patients who use statins, an anti-cholesterol drug.

Still, to reach such a vast number of customers the obesity drug market will have to evolve. To start, the medications will have to be available in pill form, which makes them easier to transport and administer. That should happen: both Lilly and Novo Nordisk are working on new oral treatments.

Second, the drugs will need to come off patent to help bring down prices. That won’t happen in the U.S. until 2031. Currently, a dose of Ozempic has a list price of $1,349 per month in the U.S., although insurers and governments typically charge a rebate. Novo Nordisk charges $499 per month for customers who buy directly from it, implying a retail price of around $6,000 per year.

However, a massive expansion of weight loss drug uses would be needed to help Novo Nordisk and Eli Lilly offset the loss of revenue as they lose exclusivity. On average, drug prices fall by 80% when they fall off patent. In that case five times as many patients would be needed to generate the same revenue as one before patent expiry, implying some 75 million Americans would need to take GLP-1s. That would equate to more than half the U.S. population aged over 45.

Yet a much bigger pool of customers would also draw more interest from copycat drugmakers. If the drugs are widely prescribed for a range of diseases, more companies would look to get in on the act and so take market share. That would likely drive down prices further. The compound behind Viagra, for example is now made by over a dozen companies. GLP-1s may yet become the world’s most popular drug, but there will be more winners than Eli Lilly and Novo Nordisk.

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CONTEXT NEWS

GLP-1 drugs used to treat type 2 diabetes and obesity, such as Novo Nordisk's Ozempic, may modestly reduce the risk of cancers, especially colorectal cancer, according to data released on May 22 ahead of a major medical meeting.

Among more than 85,000 people with type 2 diabetes and obesity treated between 2013 and 2023 and followed for an average of nearly four years, 2,501 obesity-related cancers developed in those taking GLP-1 drugs. That is compared with 2,671 such cancers in those who were treated for diabetes with drugs from a class known as DPP-4 inhibitors.

Novo Nordisk is expected to complete the main phase of a trial evaluating the safety and efficacy of semaglutide, the compound used in its GLP-1s, to treat Alzheimer’s disease in September 2025.