Why the Obesity Drug Revolution Is a Work in Progress

A new class of weight-loss drugs known as GLP-1s are proving to be game changers for people with obesity. They’re also minting billions for pharmaceutical companies, especially the companies that developed them, Eli Lilly & Co. and Novo Nordisk A/S. Yet the interest in these miracle drugs has presented some challenges. Not only are insurance companies sometimes balking at paying for the medications, which can cost as much as $16,000 a year, but ongoing shortages have created opportunities for lower-priced copycats. It also remains unclear whether pharma companies can actually deliver on the promise of even better weight-loss drugs — part of the premise behind their high stock prices. Another unknown variable is Robert F. Kennedy Jr., President-elect Donald Trump’s nominee to head the US Department of Health and Human Services, who has expressed reservations about the pharma industry — and its new wonder drug category.

What’s happening with the supply of GLP-1s?

The two main GLP-1 obesity drugs currently on the market are Novo’s Wegovy and Lilly’s Zepbound, which are both taken as weekly injections. (Wegovy contains the same drug that’s in Ozempic, which is approved by the US Food and Drug Administration to treat diabetes, but at a slightly higher dose, while Zepbound contains the same medicine as Lilly’s diabetes drug Mounjaro.) The two companies have struggled to meet demand since introducing the drugs.

So how have millions of Americans gotten the drugs, especially when insurance doesn’t always cover them? Through a legal provision that’s infuriated Lilly and Novo, which have been investing billions of dollars in manufacturing to increase supply. Whenever a drug is in shortage or otherwise not “commercially available,” the FDA allows compounders — a type of licensed pharmacy — to make and sell their own off-brand copycats. These compounded versions, available through telehealth companies such as Hims & Hers Health Inc. that widely advertise them on social media, cost a fraction of the brand-name versions and are generating as much as $1 billion a year for compounding pharmacies.

Compounders have sued the FDA, which has flip-flopped on whether Lilly’s drugs Mounjaro and Zepbound are still in shortage; a ruling that they are would, in effect, prohibit compounders from making copies. In December, the FDA said the drugs were no longer in shortage — meaning compounders have 60 to 90 days to stop making copycats of Lilly’s drugs — but litigation is ongoing. As of Dec. 31, Novo’s drugs remain in shortage, according to the FDA.

What’s happening with insurance coverage?

Many patients can’t get or have lost coverage by insurers who refuse to cover the expensive drugs, leaving consumers to pay out of pocket or just buy the copycat versions, which are typically cheaper. About 44 percent of large employers cover the drugs for weight loss, but nearly all restrict coverage to those who meet certain narrow criteria, according to Mercer’s National Survey of Employer-Sponsored Health Plans.

Medicare, the government health plan for Americans age 65 and over, does not cover drugs for weight loss. However, President Joe Biden’s administration recently proposed a rule that would require the US government to cover obesity drugs for millions of Americans on Medicare. The Trump administration will be able to finalise or block the proposed rule.

It’s unclear where Trump stands on the issue. Kennedy, his pick to lead HHS, which oversees the FDA and the Centers for Medicare and Medicaid Services, has criticised the use of drugs for weight loss. In a September post on X, he argued that America should focus instead on “fixing our food system and addressing the obesity crisis at its root.” On the other hand, Trump’s close adviser Elon Musk has championed making GLP-1s “super low cost to the public” and claims to have taken such drugs himself.

Which GLP-1 is most effective?

Both obesity drugs on the market cause weight loss by mimicking an appetite-controlling gut hormone called GLP-1, which is released after eating and makes people feel full. Zepbound also targets a second related gut hormone called GIP, which helps lower blood sugar and may boost metabolism.

Zepbound beat Wegovy in a head-to-head trial sponsored by Lilly. Of 751 patients with obesity, those on Zepbound lost 20.2 percent of their weight over 72 weeks, while those on Wegovy lost just 13.7 percent of their weight, according to the company’s announcement in early December.

Both drugs have other benefits that extend beyond weight loss. Wegovy is the only GLP-1 drug proven to prevent heart attacks and other cardiovascular events in people with heart disease and obesity. In December, Zepbound also became the first drug approved to treat sleep apnea.

Could future drugs improve upon these results?

Potential profits have lured a growing number of drugmakers to try to develop their own weight-loss treatments. Meanwhile, frontrunners Lilly and Novo are racing to develop treatments that outperform their current blockbusters before their patents run out. However, it’s unclear how much drug companies will be able to improve upon Zepbound’s efficacy, if at all.

Novo is testing a next-generation drug called CagriSema that company executives have repeatedly suggested could produce even more weight loss than Zepbound. CagriSema combines a GLP-1 with another compound, called cagrilintide, which mimics a hormone called amylin.

Both the old and the new medicines suppress the appetite, though drugmakers describe the effects of amylin-imitating drugs as a gentler experience than a GLP-1 drug, helping people stay satisfied for longer instead of wiping away their drive to eat. But the first big study of CagriSema, which was published in December, found that the drug produced about 20.4 percent weight loss over 68 weeks, roughly equivalent to Zepbound. Novo shares plummeted. The company is continuing to study the medicine in other trials, including a head-to-head trial versus Zepbound.

Another promising next-generation drug is Lilly’s retatrutide. It imitates three hormones: GLP-1; GIP; and glucagon, which helps control blood sugar levels. The drug helped people lose up to about 24 percent of their body weight in a 2023 mid-stage study and is now in final stage trials, with results due in 2026.

How far off are pill versions of GLP-1 drugs?

Several companies are working on obesity pills that could produce substantial weight loss without the need for weekly injections. But so far, many efforts to come up with obesity pills have encountered setbacks.

Pfizer Inc. has struggled to develop a pill, with one prospect failing entirely in June 2023. Trials of a twice-daily compound were discontinued later that year because of side effects. The company is now working on a new once-a-day formulation. Meanwhile, shares of Roche dropped in September after its experimental pill carried severe side effects in a preliminary study. Numerous other companies remain in early stages of testing obesity pills, including Merck & Co., which licensed an experimental obesity pill that was in preclinical testing in December.

That leaves Lilly as having one of the most advanced obesity pills in testing. Its pill, orforglipron, is in late-stage trials, with results due in 2025. In mid-stage trials published in 2023, participants on the drug lost as much as 14.7 percent of their body weight over 36 weeks.

What about drugs that don’t need to be injected as frequently?

Drugmakers are also trying to come up with drugs that are just as effective as current shots, but require fewer injections. That’s gone slowly, too.

Amgen Inc. shares fell in late November after its experimental drug, dubbed MariTide, failed to significantly outperform rivals in a mid-stage trial. The drug is taken every month, and Amgen is testing whether patients can wait even longer between shots. However, as many as 40 percent of patients experienced vomiting, particularly in the days immediately after the first dose.

Why isn’t progress faster?

In general, drug development is a slow process. It’s usually marked by incremental improvements or outright disappointments, and only occasionally by breakthroughs. Obesity drug development was a graveyard for drugmakers for many years. Wegovy and Zepbound, the first-ever highly effective treatments, were major advances. It’s not a surprise that attempts to improve on these drugs may fall short of investor expectations.

By Ike Swetlitz, Madison Muller and Robert Langreth