What’s next for the weight loss drug market: pills, rivals, insurance

The appetite for blockbuster weight loss and diabetes drugs is far from satisfied. 

From fresh competition to new uses, the market is quickly vaulting into a new stage of growth. But factors including insurance coverage, pricing, copycat drugs and the development of new pills will ultimately determine how far the treatments will reach.

Eli Lilly and Novo Nordisk are still the dominant players, as demand for their weekly injections shows few signs of slowing. Eli Lilly has pulled ahead in the market, saying during its third-quarter earnings call on Thursday that it gained share for the fifth consecutive quarter and that its drugs account for nearly 6 out of 10 prescriptions within the injectable obesity and diabetes class.

But both firms are focused on ramping up supply, testing new uses for their medicines and bringing the next wave of obesity drugs to patients, including more convenient pills. 

Behind them is a slate of drugmakers – from biotech upstarts to pharma giants – racing to win a slice of what some analysts expect could be a roughly $100 billion market by the end of the decade. There may be plenty of room for new entrants: McKinsey projects that 25 million to 50 million U.S. patients could use GLP-1s by 2030. 

Nearly every major pharmaceutical company has bet on obesity drugs, often through deals with smaller developers, including businesses based in China. While some experimental drugs are further along than others, all are likely years away from hitting the market, and their competitive potential will depend on future data showing their effectiveness and how well patients tolerate them.

As competition heats up, many patients are still struggling to access the drugs. Some insurers, including Medicare, don’t cover GLP-1s for obesity, which can cost roughly $1,000 per month before rebates.

Eli Lilly and Novo Nordisk have rolled out discount programs for cash-paying patients to close the gap, and more employers are offering coverage as GLP-1s prove their added health benefits like treating obstructive sleep apnea and chronic kidney disease as well as slashing cardiovascular risks.

Still, some patients continue to use cheaper, copycat versions of branded treatments – even though those alternatives are restricted in many cases. While Novo Nordisk and Eli Lilly’s drugs are no longer in shortage, both companies are cracking down on pharmacies, medspas and other suppliers that mass-produce and market cheaper compounded GLP-1s.

While new competitors and lower-cost pills could allow drugs to reach more patients, access will largely depend on how companies like Novo Nordisk and Eli Lilly choose to price their drugs in the years ahead.

Here’s what to know about the state of the booming weight loss drug market.