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The Shift Towards Weight-Centric Approach in Diabetes Treatment Expected to Impact Health Complications
Weight Management Focus Accelerating Uptake of GLP-1 Medications
According to Morgan Stanley analysts, there is a significant change happening in the treatment of diabetes, with doctors increasingly prioritizing weight management. This shift is expected to accelerate the adoption of GLP-1 medications and extend beyond diabetes, encompassing health complications like heart failure, sleep apnea, and kidney disease. The analysts note an increase in revenue forecasts for Novo Nordisk and Eli Lilly's GLP-1 medications, projecting a rise from $40 billion to $56 billion by 2030. Novo Nordisk's semaglutide, marketed as Ozempic and Wegovy, and Eli Lilly's tirzepatide have gained attention for their ability to lower blood sugar, reduce food cravings, and assist in weight loss.
Next-Generation Products and Dominance in the Market
Both Novo Nordisk and Eli Lilly have promising next-generation GLP-1 medications in development, positioning them as industry leaders in this category. Morgan Stanley highlights that GLP-1 medications currently account for nearly 30% of all new diabetes prescriptions in the United States, signifying their growing popularity. While the uptake has been slower outside the U.S., the analysts view this as an opportunity for future global growth. They estimate global sales (excluding the U.S.) to reach over $70 billion by 2030.
Anticipation of Novo's Select Study Results
Morgan Stanley's assessment precedes the forthcoming release of Novo Nordisk's Select study results. This five-year study examines the long-term cardiovascular benefits experienced by obese patients taking Wegovy. Pending positive outcomes, the trial could reinforce the notion that treating obesity and milder weight gain with GLP-1 medications improves patient health and reduces healthcare costs. The link between weight loss and better overall health may also facilitate insurance coverage for these expensive medications, including Medicare.
Implications for the Market and Earnings
Insurers' accelerated inclusion of GLP-1 medications in coverage, which surpassed expectations, has surprised Morgan Stanley. The bank observes that reimbursements for obesity medications have expanded rapidly, covering 40 million lives in the U.S., more than the estimated total number of diabetic patients. Consequently, the analysts project the GLP-1 medication market to reach $77 billion in 2030, a significant increase from the previous estimate of $54 billion. The positive results from the Select study are expected to drive changes in treatment guidelines and foster greater patient-physician and payer engagement.
Wells Fargo also predicts that Eli Lilly's second-quarter revenue will surpass expectations due to strong Mounjaro sales. The introduction of co-pay assistance coupons by Lilly has facilitated patient access to Mounjaro, despite limited insurance reimbursement. As more insurance companies cover the drug, revenue recognition per prescription is expected to increase. Analysts believe revenue growth may have continued in June as more patients or their insurance providers began paying full price, compensating for the decline in co-pay card users.
Overall, the weight-centric approach to diabetes treatment and the increasing adoption of GLP-1 medications are projected to have a significant impact on various health complications. This shift is expected to drive revenue growth for Novo Nordisk and Eli Lilly, solidifying their dominance in the market.
Conclusion: A "Hot Take" on the Impact of Weight-Centric Diabetes Treatment on a New Business
The shift towards a weight-centric approach in diabetes treatment, with doctors increasingly prioritizing weight management, is expected to have a profound impact on various health complications. This change is anticipated to accelerate the adoption of GLP-1 medications, such as Novo Nordisk's Ozempic and Wegovy, and Eli Lilly's tirzepatide, which have shown promising results in lowering blood sugar, reducing food cravings, and aiding in weight loss.
For new businesses looking to enter the healthcare market, especially those focusing on weight management solutions, this shifting landscape presents an opportunity for growth and innovation. The increasing demand for GLP-1 medications and the expected rise in their market value from $40 billion to $56 billion by 2030 opens avenues for developing next-generation products that cater to the evolving needs of patients.
Furthermore, the anticipation of positive results from Novo Nordisk's Select study, which examines the long-term cardiovascular benefits of GLP-1 medications in obese patients, could further solidify the connection between weight loss and improved overall health. This could potentially lead to greater insurance coverage for these medications, including Medicare, thereby expanding the addressable market.
The accelerated inclusion of GLP-1 medications in insurance coverage, surpassing expectations by covering 40 million lives in the U.S., presents another opportunity for new businesses. The increasing reimbursements for obesity medications indicate a growing acceptance and willingness to invest in weight-centric treatment approaches. This creates a favorable environment for developing innovative products and services that complement the use of GLP-1 medications and support weight management efforts.
Overall, the shift towards weight-centric diabetes treatment and the increasing adoption of GLP-1 medications have far-reaching implications. New businesses that can align their offerings with the evolving needs of healthcare providers, payers, and patients in this changing landscape have the potential to thrive and make a significant impact on improving health outcomes and addressing the growing prevalence of weight-related health complications.
Article First Published at: https://www.cnbc.com/2023/07/25/morgan-stanley-sees-a-profound-shift-in-diabetes-treatment.html.svg)
