Big fat profits from obesity drugs

A clutch of Pacific Islands whose names are unfamiliar to many of us has the dubious distinction of being the most obese states or territories globally. If you look up the World Obesity Federation, the Global Obesity Observatory or even the World Population Review listings, these islands, starting with American Samoa and including collectives such as Wallis and Futuna, Tonga, Tokelau and Tuvalu, top the global obesity and overweight index. But this is misleading in many ways; the countries facing an acute crisis are actually the US, China and India where the weight problem is a pressing public health concern since it is linked to diabetes and heart disease.

In the Pacific islands, the factors contributing to obesity are thought to be marked dietary changes, fast food prevalence and possible genetic predispositions. But with populations of less than 15,000 in some of these island nations—the high is around 50,000—the statistics of 70 per cent obesity do not present the same grim picture as the big three do because of the sheer numbers even though the concerns are the same. But when any disease culls millions of the population then it hits the headlines, forcing health authorities (and drug companies) to take note because of the economic consequences. The US has more than 100 million adults who are obese and 22 million categorised as severely obese. At home, the statistics are as forbidding, just a wee bit behind China’s.

A Lancet study published earlier this year reveals how serious the problem is in India. It classifies 70 per cent of the urban population as obese or overweight, an irony considering the inexcusably high rates of malnutrition in the country. And there is the ominous link of obesity with diabetes, a disease where Indians again top. The latest Indian Council of Medical Research—India Diabetes study estimates that there were 101 million diabetics and 136 million pre-diabetics in India. These figures are for 2021.

This column is using a heavy dose of statistics merely to underline how serious the crisis is, and not just in the top three countries. It affects most countries barring a handful. The World Obesity Atlas 2023, published by World Obesity Federation, warns that the economic impact of the overweight and obesity problem would surpass $4.32 trillion annually by 2035 and predicts that more than half the global population will be living with this condition within 12 years if prevention, treatment and support do not improve. At almost 3 per cent of global GDP, this is as serious impact as COVID-19 in 2020.

Since the general tendency is to dismiss obesity and excess weight as a lifestyle problem, health experts say there is a need to correct this perception. Genetics, physiology, psychology and co-morbidities along with the environment play a significant part in this problem.

The treatment is extremely limited in terms of access and affordability although the new drugs are reported to be remarkably effective. What we have now are about six treatments, injectables and pills that have been approved by the US regulator. The most popular of these are the blockbuster medicines made by Novo Nordsk and Eli Lilly, both of which are on a high growth trajectory. In a few years from now, says a market analyst report made public in July, obesity products will overtake the world’s bestselling drugs and are pushing even cancer drugs to a secondary spot. It is a shift that is as amazing as it is scary. Market intelligence agency Evaluate says that obesity and diabetes drugs, in particular Nordsk’s semaglutide based Ozempic, Wegovy and its newest candidate CagriSema along with Lilly’s tirzepatide products marketed as Mounjaro and Zepbound are expected to be market leaders which will bring in revenues of more than $100 billion by 2030.

That’s a humongous haul and the main reason is that these drugs are hugely overpriced. These medications, referred to as glucagon-like peptide 1 or GLP-1 agonists, were originally tailored to control diabetes and are now proving effective in controlling weight and fighting obesity. The popularity and efficacy of these drugs have sparked a prescription-writing frenzy in recent years, leading to a huge shortfall since last year. The GLP-1 branded name drugs cost an unaffordable $11,000 to $16,000 a year—this after a 40 percent price cut discount—although it costs just a fraction of the price to manufacture.

Nordsk, like all pharmaceutical companies claims that the prices reflect the research and development investments it has made but such justifications do not bear scrutiny. A team of researchers from Yale University, King's College Hospital in London and Harvard Medical School published a report that showed semaglutide, the active ingredient in Ozempic and Wegovy, could be manufactured for between 89 cents and $4.73 per month, far less than the cost of producing several types of insulin. In other words, the drugs were by as much as 400 to 500 per cent. But then there is patent protection on semaglutide till 2026.

There is hope around the corner in two of the major countries which bear a huge burden of obesity and related problems. A Reuters reports from Shanghai says that Chinese drugmakers are developing at least 15 generic versions of Ozempic and Wegovy, with clinical trial records proving to be positive. A similar story is unfolding in India where the top generic pharma companies such Dr. Reddy’s, Lupin, Zydus, and Sun Pharma are working on developing anti-obesity medications. Leading the pack is Biocon Ltd which is making the first generic version of Nordsk’s liraglutide injectable. The Danish company’s patent expires in November this year. It has already secured approval from the UK regulator for the generic drug. Unusually, the government is planning to offer incentives to promote local manufacturing of GLP-1 drugs in 2026, says an agency report. Not all the companies are focused on the traditional generic substitution route. Sun Pharma has announced that it is working on its own experimental drug to treat type 2 diabetes and obesity. This is a rare case of innovation.

The question is: Will the price of obesity drugs drop to the level that the US-UK researchers found is feasible?

This was first published in the 1-15 September, 2024 Print edition of Down To Earth