The Market For Weight Loss Medications Is Getting Big, But How Big Could It Get?
AInvestTue, Oct 24, 2023 ET
2min read
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As companies like Novo Nordisk and Eli Lilly continue to capture the attention of the market, there is growing curiosity among analysts and investors regarding the potential market size for weight-loss medications.

Citigroup, on Monday, revised its sales expectations for insulinotropic drugs, projecting sales of $71 billion by 2035, up from the previous estimate of $55 billion. However, Citigroup's outlook is considered more conservative compared to Guggenheim's forecast.

In the prior month, Guggenheim's report had suggested a potential market size ranging from $150 billion to $200 billion for these drugs.

Guggenheim analyst Seamus Fernandez's optimistic expectations are grounded in his belief that GLP-1-based insulinotropic drugs will become the most prescribed drugs in history by 2031 or even earlier. 

These drugs not only demonstrate effectiveness in controlling insulin levels and promoting weight loss but ongoing research indicates potential benefits for cardiovascular health, sleep apnea, and chronic kidney disease.

Fernandez anticipates GLP-1 sales reaching $50 billion as insulinotropic drugs become the standard treatment for diabetes patients. He also predicts an additional $140 billion in sales from obese patients.

Analyst Andrew Baum highlighted in a research report on Monday that despite the evident demand and unmet medical needs, accurately predicting the long-term benefits of insulinotropic drugs remains a challenge, particularly given the obesity rate exceeding 42%.

It is important to note that these drugs come with a hefty price tag, with Wegovy costing as much as $1,350 per month. Currently, private insurance does not guarantee coverage for individuals seeking obesity treatment, and federal health insurance plans do not include weight loss drugs in their coverage.

Nevertheless, improvements in insurance coverage and supply chain issues are expected to ameliorate over time. Many analysts anticipate that these challenges will be addressed gradually, and they foresee peak sales for these drugs reaching approximately $100 billion by 2030. Goldman Sachs recently joined this optimistic group by releasing their latest forecasts.

Analyst Chris Shibutani stated in a research report that they estimate around 15 million U.S. adults will receive treatment with anti-obesity medications for chronic weight management by 2030 (excluding patients receiving treatment for type 2 diabetes). This represents a penetration rate of approximately 13% in the U.S. adult population.

Shibutani mentioned that Eli Lilly, which is marketing Mounjaro and tirzepatide, is expected to capture a share of about $52 billion. Eli Lilly anticipates FDA approval for its obesity treatment drug by year-end. The company's product line also includes experimental next-generation insulinotropic drugs like orforglipron and retatrutide.

Novo Nordisk, currently approved to sell Wegovy (semaglutide) as a weight loss treatment, also has other anti-obesity drugs in its pipeline, such as CagriSema.

Many industry analysts foresee Novo Nordisk and Eli Lilly dominating this niche market for a significant period. While some other pharmaceutical companies hope to enter this field, they are likely to face challenges in catching up. According to Goldman Sachs' model, these two companies are projected to hold an 80% market share by 2030.


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