Is the Obesity Market Just Too Full?

In the USA, obesity currently affects nearly 35% of all adults and its prevalence continues to grow rapidly. Obesity has been estimated to account for 21%, or $191 billion, of all annual medical costs in the USA and the weight-loss drug market has expectedly become increasingly saturated. However, Novo Nordisk asserts that its new weight-loss therapy SAXENDA has a guaranteed niche in the USA obesity market. The once-daily subcutaneous obesity treatment has already been approved by the FDA under the brand name VICTOZA as a lower dose formulation for the treatment of type II diabetes. SAXENDA has been authorized for use in adults with a body mass index (BMI) of 30 or greater (the current The Obesity Society definition of obesity) or adults with a BMI of 27 or greater (overweight) who have at least one weight-related condition such as hypertension, type 2 diabetes, or high cholesterol (dyslipidemia).

Given its broad portfolio of diabetes products, Novo Nordisk is confident that its longstanding relationship with endocrinologists adds a competitive edge to SAXENDA – enough apparently to charge a hefty premium. While the recently approved obesity therapies CONTRAVE, QSYMIA, and BELVIQ are priced at around $200 per month, SAXENDA’s price tag is $1,068 per month. Although all four products work by suppressing appetite, SAXENDA will be the first GLP-1 agonist approved for weight loss.

So what does all of this mean to payers? According to the Kaiser Family Foundation, one third of all health plans in the USA do not cover anti-obesity drugs at all, one third cover all FDA-approved weight-loss drugs, and one third cover approved drugs with certain restrictions in place. Larger plans with higher turnover are especially less likely to cover the drugs as plans are most concerned with treatments that will have an immediate impact on the plan year. Moreover, payers recognize that many people who are on anti-obesity drugs may have to remain on them for the rest of their lives. Nevertheless, the perception of obesity is gradually shifting. Previously seen as a matter of willpower, the complexities of the root causes of obesity, such as genetic factors, are becoming better understood. Furthermore, as the link between obesity and increased risk for type 2 diabetes, heart disease, cancer, and other medical conditions has become more established, payers may become more open to the idea that certain anti-obesity therapies fall under the category of preventive care, provided that patients are exercising and dieting appropriately simultaneously.

The market access prognosis for SAXENDA is unclear at this point. While payers may see SAXENDA as serving a dual role for obese patients who are also afflicted with type II diabetes, the product’s price tag is certainly not comforting. Furthermore, uptake of the newer anti-obesity therapies has not met expectations, as the market shares of BELVIQ and QSYMIA were markedly reduced when CONTRAVE entered the space, with each product capturing between 30-40% of the market. With a subcutaneous mode of administration and comparable efficacy data to other anti-obesity products, payers may not be so quick to incorporate SAXENDA into their formularies.