US Market For Obesity Drugs Much Bigger Than Europe’s For Many Reasons

The U.S. market for the new wave of obesity drugs is much larger than Europe’s. Substantially lower obesity prevalence in Europe is an obvious reason. But there are many others. These include delays in European launches caused by manufacturing problems, much lower product prices (translates to diminished revenues for drug companies), strict insurance coverage constraints coupled with less willingness by consumers to pay for medicines out-of-pocket, no direct-to-consumer advertising, more scrutiny regarding off-label use prescribing, and a higher degree of sensitivity to the issue of shortages of drugs intended for use by diabetics.

The new classes of obesity medications – GLP-1 and GIP/GLP-1 receptor agonists have approved uses for diabetic patients, but are being prescribed for obesity both on- and off-label, depending on the drug in question. These include Saxenda (liraglutide), two semaglutide agents, Ozempic and Wegovy, and Mounjaro (tirzepatide). Saxenda and Wegovy have labeled obesity indications, while Ozempic and Mounjaro do not (yet).

Ozempic (semaglutide), for example, is a natural digestive hormone that helps control blood sugar levels. It was originally developed to stimulate the release of insulin in diabetics. But it was discovered to have another property that can contribute to weight loss, namely, slowing down the rate at which food leaves the stomach, which means a person feels full more quickly which in turn reduces appetite.

Wegovy (semaglutide) works similarly, but is at a higher dose. The Novo Nordisk product was approved by the Food and Drug Administration in June 2021. As was the case with Saxenda, Wegovy is indicated as a weight loss medication in conjunction with diet and exercise.

Soon following Wegovy’s approval in the U.S., demand for the product began to outstrip supply. Catalent, the contract manufacturer in charge of syringe filling for Wegovy pens in the U.S., had to temporarily halt deliveries on the heels of manufacturing bottlenecks.

In Europe, while Wegovy obtained marketing authorization for obesity in November 2021, the product has only been formally launched in two European countries thus far, Denmark and Norway. Novo Nordisk’s inability to keep up with U.S. demand for Wegovy has effectively delayed the launch in the U.K. and elsewhere in Europe.

In the U.K., Ozempic and Wegovy – semaglutide products – are being offered in several private clinics, though not yet through the National Health Service (NHS). Wegovy will only be available to the NHS once the drug’s sponsor has secured sufficient supplies to offer it to the whole British market.

In the meantime, Novo Nordisk says it is prioritizing the U.S. market. Despite this, excess demand has continued to interrupt a smooth rollout of the product in the U.S. Consequently, in April of this year, Novo Nordisk decided to pause its marketing campaign of the drug as it attempts to ensure there will be enough supply to meet demand.

Many clinicians hail GLP-1- and GIP/GLP-1-based therapies as “breakthroughs.” The Economist went so far as to say that the new classes of drugs could end obesity globally.

However, critics, who are often in the “prevention over pills” camp, argue that the drugs unnecessarily medicalize obesity. They emphasize that obesity medications aren’t a “quick fix or a substitute for a healthy diet and exercise.” Moreover, having to take the medications indefinitely to keep the weight from coming back while navigating side effects and limits on insurance access can be “frustrating features of many patients’ journeys.”

But what’s undeniable is that the new drugs – whether repurposed or novel agents, like tirzepatide, have robust clinical effectiveness, and can even be cost-effective, depending on the price. This sets them apart from their predecessors, which weren’t particularly effective and often had rather unbearable adverse events profiles.

Last August, the Institute for Clinical and Economic Review (ICER), which performs cost-effectiveness assessments in the U.S., released a report on obesity medicines. Of the treatments reviewed, the ICER report gave the best ratings to Wegovy and Saxenda. At the same time, ICER did not consider Wegovy cost-effective at the current U.S. price. At $237,000 per quality-adjusted life-year gained, it is substantially above the $100,000-to-$150,000 range considered the upper bound for cost-effectiveness in the U.S.

And so, ICER suggested price cuts to bring Wegovy’s price in line with its value. Specifically, ICER indicated a benchmark annual price range for semaglutide of between $7,500 to $9,800 would make the product cost-effective.

While there are still many gaps in U.S. reimbursement, including a prohibition of coverage in Medicare, new obesity drugs are covered by a growing number of commercial insurance carriers. And restrictions on coverage aren’t as rigid as what we observe being proposed and implemented in Europe.

In March of this year, the U.K. cost-effectiveness watchdog, the National Institute for Health and Care Excellence (NICE), published positive guidance for Wegovy, implying the product has favorable cost-effectiveness numbers. Notably, at £199 ($250) per month’s supply, Wegovy is considerably cheaper in the U.K. than the roughly $1,300 it is listed at in the U.S. Undoubtedly, the much lower price figured in the advantageous cost-effectiveness assessment.

But NICE’s recommendation confines reimbursed usage to a very narrow group of patients, much narrower than the label. In the U.K., once supply issues are sorted out, Wegovy will only be available to severely obese adults who have at least one additional weight-related condition, such as heart disease or high blood pressure, a body mass index (BMI) of more than 35, prescribed only within an NHS-authorized specialist weight management scheme, and for a maximum of two years.

In the Netherlands, Saxenda is now included in the basic health insurance package for the treatment of a limited number of people with serious obesity, defined as a BMI over 35. Saxenda is listed at €2,600 per patient per year ($2,795), while in U.S. it lists at approximately $16,000 for an annual set of treatments.

Both Saxenda and Ozempic can be obtained for minimal out-of-pocket co-payments in the Netherlands as weight loss therapeutics, but there are stringent conditions attached to their reimbursement, including a BMI of 35 or more. A doctor must also examine the root causes of a patient’s obesity. Subsequently, the physician advises an appropriate lifestyle intervention. If lifestyle measures don’t work, then a patient may gain access to a weight loss agent “as an aid.” However, this must be done “under proper monitoring.”

This raises the question, given the comparatively low prices of obesity drugs in Europe, won’t Europeans just buy them without caring much about reimbursement? Surely some have already done so, and others will follow. But Europeans are generally very reluctant to spend substantial sums of money out-of-pocket on healthcare. They’re not accustomed to considerable patient cost-sharing and as a result usually have a lower threshold with respect to how much they’re willing to pay.

Another market-limiting factor to account for is the fact that there’s less information dissemination on obesity and the various interventions for this condition. The information that is available to the public is subject to far more restrictions in Europe than in the U.S.

For one thing, there is no direct-to-consumer advertising in Europe. Also, obesity awareness drives are less ubiquitous. In the U.S., Novo Nordisk has an ongoing online campaign to redefine and destigmatize how Americans think of obesity. Although specific drugs are not mentioned, “prescription drugs” are included as an option, which the campaign suggests people might want to speak to their healthcare provider about.

To illustrate just how strictly (self)regulated information dissemination is in Europe compared to the U.S., consider that when Novo Nordisk sponsored a weight loss training course for healthcare professionals in the U.K., the British pharmaceutical industry trade group rebuked Novo Nordisk, suspending it for two years, saying the company “breached the industry’s code of conduct.”

According to the trade association, Novo Nordisk failed to clearly disclose its sponsorship of the training course. What in particular prompted the drug industry group’s attention was that the course referenced GLP-1 receptor agonists as a possible treatment of obesity.

Then there is the closer scrutiny of off-label use prescribing in Europe, and a higher degree of sensitivity to the issue of shortages of drugs intended for use by diabetics. In France, for instance, the most visible concern with obesity drugs appears to be the expansion of off-label usage, which gives rise to reducing the supply of products needed by diabetics.

French officials openly criticize the deployment of social media to promote Ozempic. They worry that because the online videos are promoting Ozempic for a different purpose than treating diabetes this could lead to shortages of a medically necessary item.

In March, the French National Agency for the Safety of Medicines (ANSM) and Assurance Maladie (public sector health insurer) stated that Ozempic would be subject to “enhanced surveillance.” A spokesperson said that ANSM is attempting to quantify the problem of off-label uses and even forgeries to obtain Ozempic from pharmacies. The spokesperson specifically cited Ozempic as being “misused by non-diabetics for weight loss purposes,” and reiterated that its use should be reserved solely for treating diabetics.

Currently, the U.S. has the lion’s share of the global obesity drug market. Besides the relatively high prevalence of obesity in the U.S., the reasons cited in this article likely imply an extension of American dominance in this market.