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Obesity drugs market – what are the prospects?

Following a period of indulgence, the New Year often sees us promising to mend our ways and start a new regime. “New Year, New You” is an oft-seen headline come the first weekend in January. But science may be riding to our rescue with the advent of weight-loss drugs.

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According to The World Obesity Federation, nearly 40% of the population is overweight or obese, and this is forecast to increase to 51%, or more than 4 billion people, by 2035. This would push up the global cost of obesity to more than $4 trillion a year – comparable to the impact of the Covid-19 pandemic in 2020.

Recent data from the NHS shows hospital admissions for obesity-related conditions have doubled in the last six years and are now twice those of smoking-related health issues.

We might have a new tool to help us control obesity

A rocketing trend in the pharmaceutical industry makes a solution to the health crisis closer than ever before. New blockbuster diabetes and weight-loss drugs are proving highly effective at helping people shed the extra pounds promising body-weight reductions of as much as 20%. These drugs work by mimicking a hormone produced in the gut called GLP-1, which regulates blood sugar and tells the brain when a person is full. These drugs require a prescription from a doctor and are administered by injection, typically once a week.

Which companies are leading the weight loss drug field?

Novo Nordisk currently dominates this market with several weight-loss medicines. Eli Lilly is a close second with its rebranded diabetes drug Mounjaro, which has now been approved on both sides of the Atlantic as a treatment for obesity.

Over the summer Novo Nordisk became Europe’s biggest company by stock-market value, buoyed by excitement about its groundbreaking medicines that tackle unmet medical needs in obesity. In clinical trials, its GLP-1 treatment demonstrated a significant weight loss of 17-18% per person and notable outcomes on the heart and kidneys too. Users of the drugs also showed a 20% reduction in strokes and heart attacks.

The early successes of these new wonder drugs have been extraordinary and shows no signs of stopping, thanks to high-profile cases of dramatic weight loss being widely shared on social media by influencers. But soaring demand means manufacturers are struggling to keep up supply and, so far, the drugs are only available in the US and Europe where the obesity problem is most acute.

With the global obesity drugs market predicted to grow to $77bn by 2030 from just $2.4bn in 2022, there is a significant imperative for other drugmakers to find competing solutions.

But other weight loss drug manufacturers are not far behind

Competition is heating up and the aim of these second movers is to create products with fewer side effects. The holy grail is a once-a-day pill. This would be easier and cheaper to manufacture, potentially alleviating supply constraints, and would be more convenient for users. While there is still a long way to go the hope is that in the not-so-distant future there will be an obesity drug accessible to all. Pfizer, AstraZeneca, and Roche are all aiming to release obesity treatments in the next year or so.

As well as providing a revolution in healthcare and brightening up a dull pharmaceutical sector, new drugs to treat obesity could have significant implications for individuals and for society as a whole.

Implications of lower food consumption on the food industry

Obesity drugs are already affecting people’s relationships with food. Users are consuming 20-30% fewer calories a day, but the drugs don’t seem to supress the appetite for all foods. People are eating more fruit, vegetables, and weight-loss foods, but less confectionary, baked goods, sugary drinks, alcohol, and salty snacks. And Walmart has noticed an increase in overall spending with a switch towards healthier, and generally more expensive, healthy snack options.

Whether these changes in behaviour will stick when people stop taking the drugs remains to be seen, but the prospect of people snacking less and eating fewer high-sugar and high-fat foods as these drugs become more widely available raises questions for some major household names.

Shifting attention for medical treatments for obesity from curing the effects to preventing them could also impact a host of medical device makers in the years to come.

What does this mean for individuals and for society?

Improvements in lifespans have plateaued in the past couple of years. In 1960 a man could retire at 65 and expect to live for another three years. Women were expected to live to 74. Since then, improvements in diets, lifestyles and medicine have extended average lifespans to 80 years for men and 84 years for women. These figures have remained pretty constant since 2018.

The advent of obesity drugs has the potential to reduce deaths and incapacity from more than 200 health conditions linked to obesity including heart disease, type 2 diabetes, strokes, arthritis, and some types of cancer. This will not only relieve some of the pressure on the NHS and social care programs, it could also lead to another period of increasing lifespans. There are also studies that report a link between obesity in middle life with an increased risk of developing Alzheimer’s and other forms of dementia. So as well as living longer, we might also see a reduction in the incidence of the conditions that lead to later-life care.

But living longer has financial implications. Longer retirements will need to be paid for which means individuals will have to make sure they prepare for this with greater levels of savings and investments. It also raises questions about the affordability of state pensions and the potential need for further increases in the State Pension Age.

Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.

Obesity drugs market – what are the prospects?

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