💊💉 The future of weight loss drugs: A Quick Q&A with … analyst (and superforecaster) Greg Justice

From price controls to patient access, here's what might be next for Ozempic and other GLP-1 medications reshaping obesity treatment

GLP-1 medications, like the now-household names Ozempic and Wegovy, are rewriting the way we treat obesity. But evidence suggests that obesity isn’t the only condition GLP-1s can tackle. A slew of other conditions may be treatable by these medications that are starting seem like actual wonder-drugs.

If all this seems too good to be true, it might be because getting GLP-1s out to the public is a challenge, both for consumers and for the healthcare system at large. The future of the drugs’ applications, accessibility, and affordability is murky as the market navigates rising demand and evolving regulations. To get a better idea of the outlook for these medications, including who qualifies for prescriptions and how they’ll be covered, I emailed analyst Greg Justice a few quick questions, who responded with some well-ordered answers.

Justice is a member of the Samotsvety forecasting group, a small team of “superforecasters” whose striking accuracy has proven them to be some of the most reliable predictors of global phenomena. Samotsvety members occupy the top four slots in the history of the RAND Forecasting Initiative (formerly INFER). The group’s relative Brier score, a measurement of forecasting accuracy, speaks for itself. According to Vox:

A score of 0 means you’re average; a positive score means worse than average while negative means better than average. In 2021, the last full year Samotsvety participated, their score in the Infer tournament was -2.43, compared to -1.039 for the next-best team. They were more than twice as good as the nearest competition.

Justice and his teammates might not be specialists in the topics they tackle, but “The aggregated opinions of non-experts doing forecasting have proven to be a better guide to the future than the aggregated opinions of experts.” The team’s work has been cited in Wired, NASDAQ, and CNN, among many others.

In addition to his work at Samotsvety, he has worked as a healthcare analyst and project manager. His recent Asterisk article, “How Long Til We’re All on Ozempic?” dives deeper into some of the tricky issues we cover in this Q&A.

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1/ Will these drugs be subject to price controls over time as they become more ubiquitous? You project GLP-1s could represent over 10 percent of US pharmaceutical spending by 2030. Will the healthcare system be able to balance affordability and access with cost?

I don’t expect substantial new government price controls for GLP-1s by 2030. However, prices may mildly decrease due to competition between Novo and Lilly.

1. Recent efforts to rein in drug prices have been narrowly targeted and stopped well short of comprehensive reform.

   1. In the past few years we’ve seen nine states establish Prescription Drug Affordability Boards (PDABs), Medicare drug price negotiations, Individual Retirement Account (IRA) inflation rebates, caps on out-of-pocket payments for insulin, and an Federal Trade Commission (FTC) suit against Pharmacy Benefit Managements (PBMs), among other efforts.

      1. Most of these reforms aim to limit price growth or patients’ share of costs rather than to lower systemwide net prices.

   2. Pharma consistently has one of the top spending lobbying organizations, which makes substantial reform harder to achieve.

      1. The lobby seems pragmatic in striking deals to avoid substantial reforms.

2. Given that history, I don’t expect regulations in the next few years to be much harsher than what’s already on the books. However, bigger changes are more likely if sentiment toward pharma keeps souring despite ongoing changes in legislation.

   1. State-level efforts to control prices have run into legal problems, especially for patented drugs, meaning reform affecting GLP-1s will most likely need to come from the federal government.

   2. On one hand, the trend line over the past decade is pretty clear. Drug prices have consistently risen, and public sentiment has consistently worsened. Absent other information, we should expect those trends to continue, with sentiment worsening and legislation expanding in scope and strength.

   3. However, there may not be much room for sentiment to continue falling. Pharma is already the lowest rated industry in Gallup’s data.

      1. The decline in sentiment specifically among Republicans may also mean that the recent decline in sentiment is partly due to COVID.

   4. Current efforts may also mollify voters enough to prevent further reform.

      1. PBM crackdowns and insulin out-of-pocket payment caps in particular will address out of pocket costs to appease patients, but their effect on net prices and spending will be much smaller.

   5. Trump personally does not seem hawkish on drug companies. His policy positions have shifted, drug prices weren’t a major tenet of his campaign, and prior GOP efforts at healthcare reform have ended poorly.

      1. However, RFK Jr. remains a wildcard.

      2. Elon Musk’s pro-GLP-1 stance may also mean that GLP-1s will have bespoke legislation. However, he seems to favor maximizing their distribution, and price controls (as opposed to subsidies) risk reducing output.

3. I do expect a mild decrease in price as the market matures though.

   1. At baseline, prices for patented drugs appear to generally increase over time, so expectations of price decreases should be limited.

   2. However, Lilly is rapidly ramping up production of its tirzepatide medications. Tirzepatide has also been shown to be more effective than semaglutide in clinical trials, making Lilly a strong competitor.

   3. Addition of a strong competitor to the market may result in price competition between Novo and Lilly for preferential formulary placement, or they may offer health plans lower prices in exchange for coverage.

   4. However, there are only two competitors, and supply will be limited for a while, so I don’t expect large decreases in price in the next few years from competition.

Note: Medicare price negotiations are not considered a “new” price control. IRA negotiations are part of the current regulatory regime even if they don’t apply to GLP-1s yet. No change in regulation would mean IRA negotiations for Ozempic/Wegovy announced in the next few weeks and taking effect 2027.

2/ What do you think are the main hurdles in convincing insurers and Medicare to expand coverage for GLP-1 drugs for weight loss, and how might these be overcome?