Report: Obesity Drug Market Estimated to be Worth $200 Billion by 2031

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In the current obesity drug market, GLP-1 agonists manufactured by Novo Nordisk and Eli Lilly have garnered the majority of the attention. Currently, the two companies hold a combined 68% of sales from weight-loss drugs, however, new entrants are set to challenge their market share, according to a report by Morningstar. Biopharma companies such as Roche, Amgen, Pfizer, and AstraZeneca are currently developing obesity drugs of their own, with 16 new drugs expected by 2029, according to the report. Analysts added that this could result in an additional $70 billion in the GLP-1 market by 2031.

These new entrants are expected to emerge in 2026, with Boehringer Ingelheim and Zealand Pharma's survodutide among the first, and further launches anticipated between 2027 and 2029. As a result, the report estimates that the obesity drug market will be worth an estimated $200 billion by 2031.

The revitalized interest in obesity drug development has extended beyond established pharmaceutical giants, with venture capital driving new innovations. Organizations such as Metsera and Hercules are leading efforts in obesity drug development, making them prime acquisition targets, according to Morningstar. The report stated that over the next few years, there could be a high number of acquisitions in the space as larger pharmaceutical firms seek to bolster their pipelines with novel obesity therapies.¹

“To catch up to the underinvestment in obesity drug development, we expect several big biopharma firms to make acquisitions over the next 18 months, targeting smaller focused obesity drug development firms,” the authors wrote in the report. “On the public side, we have seen several firms with strong early-stage obesity drug data. We expect these firms are ready to sell to a larger firm as late-stage development, manufacturing, and marketing will likely be too costly for smaller firms to manage independently. On the private side, names like NodThera, Corteria, and Diasome stand out as having a greater than 50% probability of being acquired, according to PitchBook data.”

These developments have the potential to further complicate current market dynamics, which could lower prices and make it increasingly difficult for Novo Nordisk and Eli Lilly to maintain their market dominance, according to the report. In the next two years, Morningstar expects Novo and Lilly to concede price declines that expand insurance coverage across larger patient groups. Additionally, the new entrants are expected to accelerate price declines by 10% to 15% as competitors work to gain insurance coverage in 2027.^1,2

“We expect the pricing pressure to accelerate as new GLP-1s reach the market with similar efficacy, as seen with the cardiometabolic drug class of DPP-4s and SGLT-2s,” the authors explained. “Additionally, we expect forced Medicare price negotiations for Wegovy (as part of the Inflation Reduction Act) to also pressure GLP-1 pricing starting in 2027.”

According to MarketsandMarkets, the global size of the GLP-1 is poised to reach $471.1 billion by 2032, growing at a compound annual growth rate of 33.2% from this year. Further, North America was found to be the largest market for overall GLP-1 medications in both 2023 and the time between now and 2032. It is only expected to grow due to factors such as availability and access. Additionally, there is a particularly high demand in this region for GLP-1 indications such as type 2 diabetes and obesity.3 By 2031, it is estimated that 41% of individuals with diabetes and 25% of individuals with nondiabetic obesity will be on a GLP-1 medication.^1,2

Overall, although Novo Nordisk and Eli Lilly are well-positioned to retain their significant market share in the short term, the competitive landscape is rapidly evolving, the report authors concluded.¹

References

1. Obesity Drug Market: The Next Wave of GLP-1 Competition. Morningstar. Accessed September 11, 2024. https://www.morningstar.com/lp/obesity-drug-market

2. Weight-loss market to see 16 new drugs by 2029, report estimates. Reuters. September 10, 2024. Accessed September 11, 2024. https://www.reuters.com/business/healthcare-pharmaceuticals/weight-loss-market-see-16-new-drugs-by-2029-report-estimates-2024-09-10/

3. GLP-1 Analogues Market Size, Share & Trends [2032]. MarketsandMarkets. Accessed September 11, 2024. https://www.marketsandmarkets.com/Market-Reports/glp-1-analogues-market-218746186.html#:~:text=The%20size%20of%20global%20GLP,33.2%25%20from%202024%20to%202032.