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The weight loss drug market isn’t going anywhere. In fact, GLP-1 use is about to get bigger.
A new report by financial research companies Morningstar and PitchBook projected that the GLP-1 market will hit $200 billion by 2031 and that 16 new obesity drugs could emerge within the next five years.
Karen Andersen, an equity strategist at Morningstar and an author of the report, estimated that the current market is about $50 billion. Pharma companies like Roche, Amgen, Pfizer, and AstraZeneca are among the contenders expected to release additional obesity drugs in the next three to four years.
Still, the analysts predicted that Ozempic, Wegovy, and Rybelsus (semaglutide) maker Novo Nordisk and Eli Lilly, which developed Zepbound and Mounjaro (tirzepatide), will maintain two-thirds of the market by 2031 due to their “first-mover advantages.” Other competitors are expected to take a combined $70 billion of the GLP-1 market, the study read.
“The significance of GLP-1s in the broader healthcare market is hard to overstate—but we think the stock market has somehow managed to do it,” Andersen said in an emailed statement. “We see Novo Nordisk and Eli Lilly as overvalued despite assuming that a quarter of US adults with obesity will be on GLP-1 therapies by 2031, leading to a GLP-1 market north of $200 billion in 2031, before generic semaglutide (Wegovy/Ozempic/Rybelsus) launches.”
Competition rises. As competitors rush to create new weight loss drugs, other companies are compounding existing medications, including Hims and Hers, a healthcare company known for its telehealth services, and digital health startup Noom.
Compounding is a practice in which pharmacy companies can make and sell a drug—often at a lower cost—for patients with specific medical needs. Under an FDA policy, these companies can sometimes produce and dispense compounded drugs with fewer regulations and restrictions in times of shortages.
But Lilly and Novo Nordisk have both taken legal action against companies and compounding pharmacies, like Wells Pharmacy and Brooksville Pharmaceuticals, that claim to sell compounded versions of their branded products.
“Compounded products do not have the same safety, quality, and effectiveness assurances as FDA-approved drugs, and adulterated and misbranded injectable compounded drugs may expose patients to significant health risks,” Jason Brett, executive director of medical affairs at Novo, said in a press release.
In the report, the analysts predicted that Lilly and Novo will lower the prices of their products 10+% by 2027 in order to stay competitive and gain more health insurance coverage.
These weight loss drugs can treat diabetes and also help with heart failure and heart, liver, and kidney diseases, Andersen noted. Wegovy and Zepbound are FDA approved for weight loss, and Wegovy additionally received approval from the agency to treat cardiovascular conditions in patients with overweight or obesity in March.
“Given the overlap in these conditions, however, these new indications aren’t completely additive to sales,” she added.