Patients in the U.S are expected to dish out $10B on obesity medicines in 2027, marking an $8.1B rise or over 378% growth for the period 2023 – 2027, the latest industry report on pharma spending from the drug analytics firm IQVIA Holdings (IQV) indicates.
According to the report, 2 – 5 new weight loss drugs targeted at the gut hormones, glucagon-like peptide-1 (GLP-1) and glucose-dependent insulinotropic polypeptide (GIP), will reach the market over the forecast period.
The publication titled “The Use of Medicines in the U.S. 2023” notes that obesity was among a handful of therapeutic areas to undergo a significant shift in drug use during 2022 thanks to the introduction of novel weight loss therapies.
Novo Nordisk (NVO), the maker of FDA-approved GLP-1 receptor agonist Wegovy, dominates the U.S. market for obesity drugs, closely followed by Eli Lilly (NYSE:LLY), which is seeking a label expansion for its diabetes therapy Mounjaro for a weight loss indication before the year-end.
Amgen (NASDAQ:AMGN), Pfizer (NYSE:PFE), Altimmune (ALT), vTv Therapeutics (VTVT), Rhythm Pharmaceuticals (RYTM), and Viking Therapeutics (VKTX) are also vying to grab a piece of the weight loss market which, according to Morgan Stanley is expected to reach $54B in 2030 globally.
However, the IQVIA estimate for 2027, based on net manufacturer prices, indicates a compound annual growth rate of 35% – 38% for the forecast period assuming modest restrictions on coverage for weight loss meds.
IQVIA (IQV) points to more than 500K new prescriptions for GLP-1 agonists issued for diabetes and obesity in February 2023, a 152% rise from a year ago.
The firm argues that driven by novel GLP-1 inhibitors, obesity drug spending has accelerated over the past two years to reach an estimated ~$2.1B in 2022, up from $0.5B in 2018 at net manufacturer prices. Further upside is likely in the event of favorable payer coverage, offset by substantial off-invoice discounts and rebates.
Meanwhile, revised healthcare guidelines to recommend obesity treatments for those with lower body mass indices (BMI) could “dramatically” expand the eligible patient population, IQVIA (IQV) argues.
If there are no such changes and payers are unwilling to expand coverage, obesity drug spending could only reach $7B by 2027, with most of the expenses shouldered by patients through out-of-pocket costs partially supported by copay assistance from drugmakers.
IQVIA’s (IQV) bullish case for obesity drug spending stands at $22B in a scenario with no limitations to access.
However, despite the staggering costs, these expenses could offset the expenditure on other disease areas and prevent harmful cardiometabolic outcomes, which can, in turn, influence decision-making on weight loss drugs impacting their uptake and coverage, according to the report.
UnitedHealth (UNH) Chief Executive Andrew Witty recently cited affordability and clarity over eligible patients as some of the factors that can determine the company’s coverage decisions on weight loss meds. UNH, the leading managed care player in the Medicare Advantage market, reiterated its stand on GLP-1 agonists during the recent earnings call. “So there’s a lot still to learn, I think, as these things progress through their final phases,” Witty said.
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