annual sales of obesity medicines could hit $80bn, making them one of pharma’s biggest classes of drugs. No wonder enthusiasm for the makers of these drugs, Novo Nordisk and Eli Lilly, is at fever pitch. Since the start of 2023 Novo, maker of Wegovy (and its sibling Ozempic), has seen its market capitalisation soar by 87% to $560bn, making it Europe’s most valuable company.
Meanwhile the market value of Lilly, maker of Zepbound (and its sibling Mounjaro), has more than doubled to $740bn. One of these drugmakers could be the first to attain a market value of a trillion dollars, joining an elite club mostly made up of tech firms. Add in the limited volumes and high prices for these drugs today, and you might think that this nascent industry is on course to be a price-gouging duopoly.
In fact, the market will soon look drastically different from what you see now. Right now the drugs are in short supply. Shortages of their active ingredients, like semaglutide for Wegovy, and of the skinny “pens" used to inject the medicine, are a constraint on production.
And with a list price of almost $16,000 a year, these treatments are not cheap. Although a few users may be able to afford the cost themselves, most will need help from insurers or health services—many of which have yet to be convinced that the benefits are worth the drugs’ eye-watering prices. Access will be an even bigger problem in much of the emerging world, which is projected to experience the largest increases in obesity as incomes rise and diets change.
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