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The arrival of highly effective weight loss pharmacotherapies marked an inflection point for the obesity market. For the first time pharmacological interventions delivered meaningful weight loss of 15% or more, triggering extraordinary consumer-led demand.
As product supply continues to trail surging demand, fundamental ‘rules of the road’ governing the way pharmaceutical prescription markets typically behave have been suspended. For example, we see an unprecedented willingness by patients to pay out of pocket, even outside the U.S., with Novo Nordisk estimating that at present 80% of ex-U.S. sales are self-funded by patients1; or leading players Novo Nordisk and Lilly curtailing their promotional activities to avoid stimulating even more demand, while traditional brand differentiation currently plays a secondary role vs. satisfying unmet patient demand as the dominating force.
At the same time, healthcare systems are tightly restricting reimbursement of anti-obesity therapies, as they struggle with how to reconcile the need to tackle obesity as a major, growing public health crisis, how to fund a new mass market, chronic disease area potentially valued at up to $131bn globally by 20282, while ensuring equity of access and that treatments reach those patients who need them most.
In the UK, for example, NICE guidance requires one weight-related co-morbidity and a BMI ≥35.0 kg/m2 to cover Wegovy, with the drug being prescribed within specialist weight management services and reimbursement limited to a maximum of 2 years. In several countries public payers are prohibited by statute from covering weight loss medications, for example in Germany, Italy and Medicare in the U.S. Meanwhile, private payers are also under pressure, e.g., Denmark's largest private health insurer, Sygeforsikring Danmark, stopped reimbursing weight loss medications in January 2024 due to overwhelming demand3; in the U.S., two large employers, Ascension, one of the country’s biggest hospital systems, and the University of Texas, announced in 2023 that their plans will no longer cover Wegovy and other weight loss drugs.4
Against this backdrop, the obesity market is currently viewed in very simplistic terms: A monolithic opportunity, clinically defined one-dimensionally by body mass index (BMI) cut-off thresholds and segmented into two, binary market archetypes – out-of-pocket vs. reimbursed – solely based on the underlying funding mechanism.
As we will discuss in this blog, the future opportunity in obesity will be defined by much more granular patient segmentation that is reflective of true, complex, multi-dimensional unmet needs.
Several trends are driving the emergence of a less monolithic, more mature obesity market where the opportunity manifests itself in distinct patient segments. Capturing that opportunity will require a more nuanced understanding of unmet needs to inform more tailored, patient-centric approaches.
Once the existing supply-demand gap has been resolved, we expect the obesity market will begin to exhibit more orthodox dynamics, driven by choice and competitive strategies seeking differentiation that is anchored on addressing specific unmet needs in discrete patient sub-populations.
In future, three macro-dimensions will define multiple, co-existing obesity market segments which each have specific characteristics, including opportunity size, critical success factors and competitive dynamics.
Source: IQVIA EMEA Thought Leadership
Consequently, the shape of the future obesity market will be very different from today’s. The intersect of these three dimensions will create a more stratified market, reflecting nuanced patient needs, different therapy goals and who pays (see Figure 3).
The emergence of multiple, co-existing market segments defined along the above three dimensions will fragment the obesity opportunity, with profound implications for healthcare systems and innovators:
Once we move past the current hype phase and the dust settles, the ‘rules of the road’ governing typical competitive dynamics of pharmaceutical prescription markets will re-establish themselves in obesity.
The future obesity market will look very different from today’s – more segmented, defined by nuanced patient needs and where competitors seek differentiation.
This also raises important questions about how to successfully commercialise in such a market, e.g., what go-to-market capabilities and investment levels are needed. We will explore these issues in a future blog.
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1 Novo Nordisk Capital Markets Day, obesity care presentation, 7 March 2024: https://www.novonordisk.com/content/dam/nncorp/global/en/investors/irmaterial/cmd/2024/P5-Obesity-Care.pdf
2 IQVIA Institute report, 2024: The Global Use of Medicines 2024
3 Reuters, 28 April 2023: Denmark's largest health insurer drops weight-loss drug coverage as demand soars
4 Forbes, 3 August 2023: https://www.forbes.com/sites/joshuacohen/2023/08/03/new-classes-of-obesity-drugs-face-strong-headwinds-from-insurers
Discover new approaches to cardiovascular clinical trials to bring game-changing therapies to patients faster.