GLP-1-Driven Demand and the Long-Term Growth Potential of West Pharmaceutical Services (WST)

The global GLP-1 (glucagon-like peptide-1) market has emerged as one of the most transformative sectors in healthcare, driven by the explosive demand for obesity and diabetes treatments. At the heart of this boom lies a critical but often overlooked player: West Pharmaceutical Services (WST), whose specialized components are indispensable to the injectable drug delivery systems of leading GLP-1 therapies. With Eli Lilly and Novo Nordisk-the two dominant manufacturers of GLP-1 drugs-expanding their production capacities and securing exclusive partnerships with WST, the company is uniquely positioned to capitalize on a market projected to surpass $150 billion within five years.

A Near-Monopoly in Critical Components

West Pharmaceutical Services has established a near-monopoly in the supply of elastomer components used in GLP-1 injectable pens. These small rubber parts, which seal the drug delivery mechanism, accounted for 9% of WST's quarterly sales in 2025 and contributed to a 14% surge in its stock price following stronger-than-expected earnings. The company's dominance is further underscored by its exclusive contracts with Eli Lilly and Novo Nordisk, both of which rely on WST's components to maintain supply chain stability for their flagship GLP-1 drugs, including Zepbound, Mounjaro, Wegovy, and Ozempic.

This exclusivity is not accidental. The precision engineering required for GLP-1 pens creates high barriers to entry, limiting competition and solidifying WST's role as a critical node in the supply chain. According to a Reuters report, WST's recent capacity expansions and strategic investments have enabled it to meet surging demand, prompting the company to raise its 2025 profit forecast to $7.06–$7.11 per share. With no credible competitors identified in this niche market, WST's near-monopoly status appears secure for the foreseeable future.

Capacity Expansion by Key Partners: A Tailwind for WST

Eli Lilly and Novo Nordisk have embarked on aggressive capacity expansion programs to address supply constraints and meet the soaring demand for GLP-1 therapies. These efforts directly benefit WST, as increased production of injectable drugs necessitates a proportional rise in component demand.

Eli Lilly, which now holds 57% of the U.S. GLP-1 market share, has committed $27 billion in U.S. manufacturing investments, including a $5.3 billion facility in Indiana dedicated to Zepbound and Mounjaro. Similarly, Novo Nordisk has allocated $4.1 billion for a fill-finish plant in North Carolina and acquired Catalent for $16.5 billion to bolster its production capabilities. These expansions ensure a sustained need for WST's elastomers, as both companies scale up to meet the Trump administration's mandate to reduce drug costs and expand Medicare/Medicaid access.

The administration's pricing agreements with Lilly and Novo Nordisk further reinforce this dynamic. Under these terms, Medicare beneficiaries will pay as little as $50 per month for injectable GLP-1 drugs, while oral formulations will cost $145 for starting doses. This price reduction, coupled with expanded coverage, is expected to drive mass adoption of GLP-1 therapies, creating a self-reinforcing cycle of demand for both the drugs and their critical components.

Market Trajectory: A $150 Billion+ Opportunity

The GLP-1 market is on an unprecedented growth trajectory, fueled by expanding indications, oral drug development, and policy-driven accessibility. By 2030, the global GLP-1 receptor market is projected to grow from $53.46 billion in 2024 to $156.71 billion, driven by obesity treatments, diabetes management, and emerging applications in cardiovascular care.

WST is poised to benefit from this expansion in two key ways:
1. Injectable Dominance: As the current standard for GLP-1 delivery, injectables will remain a core growth driver. With Lilly and Novo Nordisk resolving past shortages, the market is primed for sustained volume growth.
2. Oral Formulations: While oral GLP-1 drugs (e.g., Lilly's orforglipron and Novo's Wegovy pill) will require different delivery systems, the transition to oral therapies is unlikely to eliminate demand for injectable components. Instead, it will create a dual-market scenario, with WST's expertise in precision manufacturing likely to extend to new formats over time.

Strategic Positioning and Investment Appeal

West Pharmaceutical Services' strategic positioning is defined by three pillars: exclusivity in critical components, alignment with market leaders, and a scalable, high-margin business model. The company's recent performance-marked by a 14% stock price jump and a revised profit forecast-reflects its ability to translate GLP-1 demand into financial gains.

Moreover, WST's role in the supply chain is shielded by the high switching costs for pharmaceutical companies. Replacing WST's components would require costly re-engineering of drug delivery systems, making its partnerships with Lilly and Novo Nordisk effectively lock-in arrangements. This dynamic, combined with the Trump administration's focus on domestic manufacturing, further insulates WST from competitive threats.

Conclusion

As the GLP-1 market accelerates toward a $150 billion+ valuation, West Pharmaceutical Services stands out as a linchpin in the supply chain. Its near-monopoly in elastomer components, coupled with the capacity expansions and pricing agreements of its key partners, positions WST to deliver consistent, high-margin growth. For investors, the company represents a compelling opportunity to participate in the long-term success of a sector reshaping global healthcare.