The damage to the national economy is huge: Cawley et al. estimated that the direct treatment costs of obesity in the US at $260 billion in 2016, which accounted for just under 10 percent of total «personal healthcare expenditure» at the time. In addition, there are indirect, but hardly quantifiable effects from the reduced productivity of the workforce. In the EU, it is estimated that direct healthcare costs associated with obesity already account for 7 percent of total healthcare expenditure.
New medicines make pounds tumble
The pharmaceutical industry is responding to health-threatening weight gain and its secondary diseases with medicines. A new class of drugs, the so-called GLP-1 active ingredients, is now available. GLP-1 stands for Glucagon-like Peptide-1. This is a natural intestinal hormone that tells the brain «I am full» after food intake. Resourceful pharmaceutical companies have now artificially extended the longevity of this intestinal hormone. The feeling of fullness therefore last longer, the calorie intake falls and thus there is also a drop in the body weight. The first two drugs for the treatment of obesity are Novo Nordisk's Wegovy, which has already been approved and whose diabetes version is marketed in Switzerland under the brand name «Ozempic», and Eli Lilly's diabetes drug Mounjaro, which is also expected to be approved soon in the USA for the treatment of obesity. Based on various studies, these medications are expected to cause weight loss of 12 to 22 percent over a period of 68 and 72 weeks, respectively, depending on the dose and baseline patient weight. In this context, we would like to point out that risks and side effects should be discussed with a physician.
Market with attractive growth rates
The growth of the market for the treatment of overweight and obesity is huge. We see a realistic opportunity for the global market for GLP-1 obesity and overweight drugs to grow from an estimated USD 10 billion currently to over USD 100 billion per year.
Wegovy from Novo Nordisk and Mounjaro from Eli Lilly could become the highest-revenue drugs in the world. We see risks for Novo Nordisk and Eli Lilly mainly in the emergence of new competitors with perhaps more effective products.
Be aware of potential stumbling blocks
Nevertheless, it takes time to tap into this attractive market. For example, questions from health insurance companies regarding financing have not yet been conclusively answered, and further production capacities need to be built up. We will therefore follow developments closely. Not least because these medicines, ideally in combination with more exercise and a healthy diet, can make a lasting contribution to reducing healthcare costs.
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