USA – Obesity rates in the United States have witnessed a relentless ascent for well over a decade, presenting a lucrative market for major drug developers keen on addressing this escalating health concern.

Novo Nordisk, a global healthcare company, recently reported a substantial surge in profits and revenue, largely attributed to the success of Wegovy, an injectable treatment for weight loss that gained approval from the Food and Drug Administration in 2021.

The first three quarters of 2023 saw a remarkable 174% increase in obesity care sales for Novo Nordisk, primarily fueled by the U.S. market.

The demand for Wegovy, an enhanced version of the diabetes treatment Ozempic, has been substantial enough to prompt ongoing supply restrictions while the company endeavors to ramp up production.

Joining the race, Eli Lilly secured regulatory approval for Zepbound, a novel iteration of the diabetes drug Mounjaro, entering the competitive weight-loss treatment market.

Notably, Lilly strategically priced Zepbound at approximately a 20% discount compared to Novo Nordisk’s Wegovy, aiming to entice employers to include weight-loss drugs in their insurance benefit plans.

Recent data from the Centers for Disease Control reveals that approximately one-third of U.S. adults were classified as obese in 2021, marking a significant increase from a quarter of the adult population in 2011. Experts project that by 2030, half of all U.S. adults could be grappling with obesity.

Jeff Jonas, a portfolio manager at Gabelli Funds, anticipates that achieving coverage in Medicare and Medicaid may necessitate legislative changes at both state and federal levels.

He emphasizes the potential revolutionary impact of these drugs but notes that it might take years for them to reach their full market potential.

Goldman Sachs forecasts sharp revenue growth in the anti-obesity medications sector as rising obesity rates drive demand.

The global market for such medications reached US$6 billion this year and is projected to surge to US$100 billion by 2030.

Novartis and Eli Lilly’s injectable treatments could face future competition, with Pfizer developing danuglipron, a potential oral medication for obesity. Additionally, biotechnology giant Amgen is in the process of developing its own obesity treatment.

The potential success of these medications may disrupt the medical device market by leading to a decline in weight-loss surgeries.

Even major retailers like Walmart have reportedly observed a decline in food purchases by customers picking up prescriptions for weight-loss drugs.

Nick Anderson, a portfolio manager at Thornburg Investment Management, characterizes the current market sentiment as “shoot first, ask questions later” when it comes to weight-loss drugs. He emphasizes the evident efficacy of these drugs and the exceptionally strong demand for them.

Companies involved in obesity treatments are strategically emphasizing the overall health benefits of their products to garner more traction for insurance coverage.

Increased insurance coverage could ultimately pave the way for more accessible and affordable weight-loss management, marking a crucial step in combating the obesity epidemic.

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