Competition will make weight-loss drugs better, cheaper and bigger

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Subscribe to enjoy similar stories. Among the many newcomers to the business of weight-loss drugs is Hims & Hers, an American e-pharmacy better known for hawking remedies for erectile dysfunction and hair loss. Since May it has offered its own version of Wegovy, a blockbuster slimming jab, thanks to a quirk in American law that lets pharmacies replicate some brand-name drugs when there are shortages.

Analysts expect that the company will pocket around $145m from its weight-loss drug this year. Over the past two years rocketing sales of Wegovy and its main rival, Zepbound, have propelled the combined market value of Novo Nordisk and Eli Lilly, the drugmakers behind them, from $560bn to $1.3trn. The GLP-1 hormone that forms the basis of both drugs has proven highly effective at helping users shed pounds, so much so that their makers have struggled to keep up with demand.

What is more, researchers are now discovering that the benefits of these drugs extend far beyond weight loss, just as prices are set to fall and more convenient forms are under development. Bloomberg Intelligence, a research firm, forecasts that global spending on weight-loss drugs will surge from $15bn this year to $94bn by 2030 (see chart 1). With hundreds of challengers eyeing a vast market of potential users, obesity drugs are shaping up to be one of the biggest and fiercest battlegrounds in the history of pharmaceuticals.

So far health insurers and governments have been reluctant to cover the cost of using GLP-1s for weight loss (a smaller dose is prescribed for diabetes). In America, the largest market by far for the drugs, Wegovy can cost up to $17,500 a year for those paying out of pocket. Only half of privately insured patients are covered for it.