From TikTok to Wall Street to regulatory agencies, interest surrounding drugs to treat obesity continues to build. Diabetes injectables — in particular, Eli Lilly’s tirzepatide and Novo Nordisk’s Wegovy and Ozempic — have garnered the most attention over the past year as potential therapeutic options for weight loss. While more needs to be known about side effects, as well as addressing access and cost, the market is immense, with some estimates pegging the global market for obesity drugs at $13 billion US by 2029, a 24% compound annual growth rate from 2022.
But focusing solely on drug delivery misses the mark. Treating obesity is highly complex and several challenges could hinder opportunities to get effective medications to patients. Oliver Wyman has identified five strategic imperatives for pharmaceutical companies to embrace if they plan to compete in this space.
Understanding the Challenges
Obesity as a serious medical condition: While there is consensus among medical groups and public health organizations that obesity is a chronic condition, opinions vary on its root causes and the best course of treatment. For instance, should adjusting lifestyle factors take precedence over medical options? As a result, Wegovy or tirzepatide might be seen more compelling to treat severe or comorbid obesity, but less so for milder levels.
Obesity can’t be addressed the same way for all: How to address obesity is highly complex, given the heterogeneity in its etiological factors, the interlinking biological pathways involved, and the variety of surrounding psycho-social circumstances. Drugs based on a single target can produce significant weight loss but not for everyone. Some historical drugs with dual targets have shown some efficacy, drugs in the pipeline with dual mechanisms are thought to be promising, and other mechanisms are being investigated. In the future, new drug targets and combinations targeting multiple biological systems will hopefully help cater to more patients.
Coverage and reimbursement are challenging: Coverage and reimbursement of obesity drugs have historically been limited across the world. The hurdle remains for innovative drugs because payer systems cannot absorb the cost of novel treatments chronically used by a potentially large population. Additionally, the Institute for Clinical and Economic Review concluded that there’s low long-term value for the money associated with some of these drugs. Payers are likely to restrict access to obesity drugs for some time, using tools such as prior authorization based on strict eligibility criteria, covering cheaper options, or high co-payment from patients.
Capturing the Opportunity
To optimize clinical and commercial success, we recommend that pharmaceutical companies embrace these five strategic tactics:
1. Deploy an integrated and personalized approach to care
Pharmaceutical companies should complement their drug offerings with an integrated, multi-channel program of engaging with patients and participating in a supportive ecosystem. The goal is to help patients to make healthy lifestyle choices, promote treatment adherence, and facilitate meaningful interactions with their care team from diagnosis to management of obesity-related morbidities. Taking these steps can enhance the drug’s therapeutic value and overall health benefit.
Partnerships with providers of diagnostics, digital therapeutics, and telehealth will inevitably become part of the strategy. For example, Novo Nordisk is partnering with companies such as Noom and Kry. Further collaborations will explode and artificial intelligence-enabled tools will further develop along with evidence-based approaches. Pharmaceutical companies should take notice of two powerful emerging approaches: the use of phenotype-guided prescribing of obesity drugs through vendors like Phenomix Sciences, which can double weight loss. And the use of digital therapeutics, validated by a robust regulatory process and prescribed by physicians. Companies will need to consider how to co-exist with these options, for example, the digital therapeutic being a companion or an initial step in the treatment pathway.
Building a supportive care delivery system for obesity patients
2. Align with health policies and the healthcare system
Tackling obesity is increasingly a top priority for policymakers across the globe. Programs take various forms, from regulatory and fiscal measures to educational campaigns and promoting physical activity. But more needs to be done to create awareness around the interconnectedness of therapeutic interventions and lifestyle.
Pharmaceutical companies have a unique opportunity — and responsibility — to partner with policymakers, public health organizations, and healthcare professionals. Actionable goals include fostering constructive attitudes towards obesity, collaborating to create adequate access and care pathways, and promoting appropriate use of obesity drugs. The mid-and long-term payback would be significant, including bolstering the industry’s reputation as a transformative social partner and stimulating appropriate demand for treatment, which will also free up funding due to lower obesity-driven utilization.
3. Offer an affordable solution
Given the widespread hurdles to reimbursement and coverage, pharmaceutical companies can reduce risk to payers through responsible pricing and adopting value-based contracts. They could also consider finance-based solutions such as agreed drug volume over time to manage the impact on budgets. Future competition from innovative entrants, generic GLP-1s, or non-pharmacological approaches will be an additional stimulus for affordable anti-obesity drugs.
4. Communicate responsibly with stakeholders
Appropriate engagement with consumers and healthcare professionals is essential. It involves communicating with them to fight prejudices and misinformation about obesity, set realistic expectations about achievable weight loss, and reinforce public efforts around prevention and healthy habits.
Balanced use of social media is key, especially in light of the increasing impact of influencers and the emerging scrutiny by public authorities in this domain. These media can be powerful channels if well used wisely; at the same time, they have contributed to the exploding demand for Ozempic for off-label use in weight control, to the detriment of people needing it to manage their diabetes, triggering a wave of criticism and alerting health authorities.
5. Be clear about the market segment
Strategic choices about where to enter the market can be based on various dimensions:
- highest risk for obesity, affording a higher price based on a reasonably moderate volume, greater unmet need, more convincing health and economic benefits, and more controllable utilization
- a wider patient population, but asking a truly affordable price that allows optimal reimbursement by public payers and private insurers
- rare forms of obesity, allowing for successful reimbursement at a high price
- self-pay segments. As an example, LeaderMed is targeting wealthy Chinese patients self-paying to reduce their weight
There’s considerable commercial opportunity in the anti-obesity market, but for those the be fully realized depends on how well pharmaceutical companies, clinicians, and health authorities work together to foster access to integrated care. The industry can contribute to a holistic approach where drug treatment is a useful component, but not the only one, or even the main element. What we will see in the obesity space will be a rich source of learning for other underfunded epidemics, such as dementia, that share similarities around potential breakthrough therapies emerging, stigma, and the high need for integrated care.