⚕ Weight-loss drugs seem like another bit of sci-fi becoming fact
And it looks like their availability will only increase
Quote of the Issue
“Free markets are the most robust mechanism ever devised by humanity for delivering rapid feedback on how decisions turn out. Profits and losses discipline people to learn quickly from and fix their mistakes. Consequently, markets are superb at using trial and error to find solutions to problems.” - Ronald Bailey, The End of Doom: Environmental Renewal in the Twenty-first Century
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⚕ Weight-loss drugs seem like another bit of sci-fi becoming fact
If you need a newsy example of how innovation can drive economic growth, the good people of Denmark are providing a pretty clear example. In the first half of this year, Danish GDP rose at a 1.7 percent annualized rate thanks to the contribution of Novo Nordisk, the drug maker responsible for anti-obesity blockbusters Ozempic and Wegovy. Without soaring production and profits at Novo Nordisk, Danish GDP would have shrunk by 0.3 percent.
"We've never seen anything like it,” Jonas Petersen, an analyst at Statistics Denmark, told Euronews. “It changes the appearance of the economy.” And while it’s hardly a perfect comparison, sales of the anti-obesity drugs turned Novo Nordisk into Europe’s most valuable company with a market capitalization equal to that of the entire Danish economy.
That said, the American people have played a big role in Novo Nordisk’s good financial fortune and are expected to continue to do so with estimates of the US share of sales ranging from 70 percent to 90 percent over the decade.
Now let’s think in Faster, Please! terms about what Americans will be getting for their money besides more slender figures. As you may already know, the semaglutide drug helps people lose weight by affecting their appetite and blood sugar levels by a) mimicking a natural hormone called GLP-1, which is produced in the gut after eating, and b) stimulating the pancreas to produce more insulin, which lowers your blood sugar levels. This process is what makes semaglutide an effective treatment in helping people with type 2 diabetes, the risk for which is increased by being overweight or obese.
But weight has nothing to do with getting type 1 diabetes, which is believed to be caused by an autoimmune condition. And yet semaglutide might have a role to play here, as well, by allowing people newly diagnosed with Type 1 diabetes to dramatically cut back or even completely stop insulin injections. In a letter to the New England Journal of Medicine, researchers describe a study that tested a semaglutide anti-obesity drug on 10 patients who had recently been diagnosed with type 1 diabetes. The study found that semaglutide helped the patients reduce or stop their need for insulin injections, which are usually required for type 1 diabetes, while also improving their blood sugar control and increasing their levels of C-peptide, a marker of insulin production. And only minor side effects.
Yes, as the researchers note, randomized clinical trials with larger numbers of patients are the logical next step. But the early results are tantalizing. As the lead researcher told NBC News:
“I was absolutely shocked that we could get rid of fast-acting insulin in three months and then basal insulin in seven out of 10 patients,” the lead author, Dr. Paresh Dandona, said, referring to two types of insulin, one fast-acting and used to blunt blood sugar spikes after eating, and the other more long-acting, meant to keep blood sugar steady throughout the day. “It was almost like science fiction,” said Dandona, a professor of medicine at the University at Buffalo’s Jacobs School of Medicine and Biomedical Sciences in New York.
Let’s take a step back: According to the CDC, $1 out of every $4 in US healthcare costs is spent on caring for people with diabetes, with $237 billion spent each year on direct medical costs and another $90 billion on reduced productivity. The quantifiable benefits from any intervention that can make a big dent in those numbers are huge — and those benefits don’t come anywhere close to capturing improvements in quality of life. Just a really great example of tech progress improving living standards in a deep way.
These drugs are certainly passing the market test. In a new report, JPMorgan’s pharmaceutical team estimates GLP-1 drugs such as semaglutides are used in 10 to 12 percent of type 2 diabetes patients in the US, leaving room for expansion for both Novo Nordisk and Eli Lilly's tirzepatide, also known as Mounjaro. The team sees usage expanding to roughly 35 percent by 2030 (with upside potential) and a $50 billion diabetes opportunity over time, split between Eli Lilly and Novo Nordisk.
In addition to outlining the potential market opportunity, JPM tries to answer a few other relevant questions. Among them: “Will insurers broadly cover GLP-1s for obesity?” JPM thinks studies showing that these medicines can lower the risk of heart problems, kidney problems, and other health issues in people who are very overweight and have other diseases “should advance payer decisions on broadly reimbursing obesity. … This will eventually include Medicare [as well as commercial players], where we see coverage by the end of the decade based on the expected strength of these datasets.” As with diabetes, JPM also sees the obesity market to be a $50 billion one by 2030 and largely a duopoly between Lilly and Novo.
And what about the new power given to Medicare by the Inflation Reduction Act to directly haggle over drug prices?
This is just one class of drugs. It’s my guess that plenty more wondrous treatments are on their way, especially given advances in mRNA vaccines and genetic editing. Science fiction becoming fact thanks to human ingenuity
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