Newscasts - Ozempic’s market-share hunger

Eastern Media International

11/09/2025 10:58

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Description: Surprising efficacy of GLP-1 drugs in treating obesity will reshape wealthy societies as much as makers Novo Nordisk and Eli Lilly. In this Viewsroom debate, Breakingviews columnists discuss how they’re straining to keep hold of this jackpot.

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Yes, it's a land grab and you can see that for two reasons. First, like you said, typically when there's only two companies or even three companies, they don't actually compete on the price. They do lots of ad campaigns. In America, you have tons and tons of commercials and you actually, they may even raise prices. Because they're all working together, they don't actually admit it to the government because that's an antitrust problem. But they don't, they actually don't compete on price. Here they are competing on price and also, they are advertising extremely aggressively.

Weight loss drugs sold under the brands Ozempic and Mounjaro are available far and wide now. The premise is relatively simple. You take a shot once a week, and it's a colorless liquid that basically goes into your body and wrestles your type 2 diabetes into submission, and in many cases, leads to quite dramatic weight loss. There are two companies responsible for making these drugs. It's Denmark's Novo Nordisk, And in the US, it's Eli Lilly. And they have enjoyed unprecedented success controlling this duopoly. And there is so much hype about this market. It is predicted by many analysts that revenue will reach over $100 billion by 2031. But in the past year, that excitement has started to wane a little bit. Tens of billions of dollars have been wiped off the value of Eli Lilly and Novo Nordisk. And that's basically because they are having drug trials that may not have lived up to expectations. They haven't failed, but they just haven't lived up to that expectation. But we're wanting to talk about something very interesting in the Viewsroom today, which is far from not working, it actually looks like these drugs work too well, and that creates its own set of problems for these companies.

Right. It's interesting because you think of a pill or an injection, as it is right now, that solves obesity effectively overnight. This is the grand health problem that's been afflicting the US, Australia, UK, et cetera, right? Because in the US I think you have something like three-quarters of the population is either overweight or obese. And the crazy thing is we've had this big rush, like Ozempic feels like almost a cultural phenomenon at this point, right? Like everybody's like watching celebrities like- who's been on Ozempic recently, and all this kind of stuff. And yet only 12% of Americans have admitted to taking this class of drug known as a GLP-1. And so, it's kind of strange, because there's still all of this space, this stuff seems to work really well, and yet, investors seem incredibly twitchy about, even the tiniest changes to, I guess, assume long-term value. You'll get a drug trial where it's like, patients only lost 12% of their weight, not 14%. So, I guess we're going to slice multiple tens of billions off of Novo Nordisk's market cap. Is that kind of how it feels like?

Yes, I think the volatility, as you said, is that there is just so much hype in this market at the moment and for like the treatment of obesity, having failed so badly in the past, the fact that there are actually really effective drugs is fascinating and is just getting people very excited and disappointed in sort of an equal measure, it looks like now. So yes, it's the Viewsroom and it's me and Jonathan are going to talk about this quite lively and really fascinating topic. One of the many things we do here, which is delve into the knottiest issues in corporate finance, business, and economics. And I'm going to bring my colleague Rob Cyran in right away because I think we're all very keen to talk about this. So, Rob Cyran is my counterpart in the US. So, I cover pharma and EMEA and he covers it in the US and has really been covering this market for a long time. So, Rob, you are very welcome.

Hi Aimee. Yes, I mean, the cultural shift has been fascinating just because if you go back a decade in pharma the problem was often more seen as gaining weight was a bigger problem. In other words, people need to gain weight if you have cancer or if you have something wrong with your intestines. And then also when like, I don't know if you mentioned this, but in the past when pharma tried to make diet drugs, one of the things was fen-phen. It was a huge scandal and large, a lot of people got hurt, they got heart damage, and the companies were sued for billions and billions of dollars. And then also whenever they tried to develop drugs, they just didn't work. People, there are good biological reasons. If you don't want to eat, you generally die in evolutionary terms. That's not a good thing. And so, the body had lots of different ways to encourage people to eat. So, it was seen as, yes, maybe there's a market there, but it's so hard to get and it doesn't make sense. And now that they've got these drugs, there's also a social backlash against them. A lot of people, it's almost like online dating was like maybe 15 years ago. You don't want to actually admit that you met your partner online. And so, it's like, we met at a bar or something. And it's the same thing now. It's like, yes, no, I'm not taking Ozempic. It's because I'm on an oatmeal diet or something ridiculous like that. And of course, you see these people and yes, you're an Ozempic and there's nothing wrong with that. But society doesn't really it hasn't reached that point yet.

Okay, so for a layman like me, maybe you can walk through like how these drugs actually work because like you were saying, everything that was specifically developed for weight loss was a total failure, right? I think like we both kind of made that point and this seemed to come almost accidentally out of diabetes medication. So again, like you say, Rob, seems like an obvious point. We evolve to eat because without eating, we die. Like, how did they actually defeat what the body wants?

Well, they don't actually know exactly how these work still. There's still a bunch of controversy over the mechanism actually. So, the protein, it splits into two and the one-half actually makes you gain weight. There's a drug, my mom worked on it actually, which causes people to gain weight and the other one causes people to lose weight, that's the GLP-1. And the GLP-1 was kind of the ugly stepchild for a long time, and people kind of ignored it because they thought, ah, who cares about losing weight for these reasons? But what it seems to do is a couple of things. It leads to satiation, so you think that you're done. It seems to reduce cravings. They're probably going to talk about it, but they also seem to, the drugs seem very effective in doing things like reducing urge to drink alcohol, perhaps take drugs, perhaps even gambling, all these types of things. And the other thing also it does is it slows gastric emptying. So, you actually end up not digesting food as well.

But I think as well, like one interesting thing about it as well, right, is that GLP-1, which is what these drugs are called, is actually a natural hormone in all of our bodies. So, you eat a big Christmas dinner, Thanksgiving dinner coming up in America. Your body will release a hormone that goes to your brain and says, stop eating. You've had enough. And that's essentially what this drug is doing, is that it goes into your body. So, for our listeners who've sat across the table from somebody that Rob's talking about, who maybe doesn't want to admit that they're on a GLP-1 drug, they might be shifting their food around their plate, it's because in many cases, people are not hungry a lot of the time when they're on these drugs, again, which is really life-changing for certain people. And then as Rob said as well, it is the brain. So, the brain is really interesting. And again, we still don't really know how it works, but that it does seem to interfere with the sort of like the dopamine that you normally get from gambling or alcohol or any kind of addiction that you have, food, is that it interrupts that. So, you don't get the same satisfaction out of a McDonald's or a takeaway or a Coke that you were before. And all of that is problematic, we'll say the least, for companies who've really kind of set themselves up for the kind of abundance that we're talking about, right? Because as you said, we're all supposed to alive by eating but I don't think we were ever supposed to eat in the quantities that we are eating, and our bodies certainly weren't set up for that. So, I don't know, Rob, if you agree, but I kind of think it's like this fascinating thing where we've created this world that is so unhealthy and now we have a drug to deal with that unhealthy world rather than adjust the world accordingly.

Well, I mean, we can't get rid of Doritos. I mean they exist. If we could legally get rid of Doritos then yes, I'd probably weigh a little less, but as it is, maybe in my future I'll be on GLP-1s or some future drug.

It's so interesting because I feel like there's a weird parallel here between AI and Ozempic, which is sort of the two big things that are going on in markets right now that every layperson like me knows about. And it's this sort of mysteriousness about how does it work? We don't really understand the full mechanisms of what we're actually doing here. And it's also, will this destroy a bunch of old guard industries that are going to be completely overturned by what's happening here? So, you go, and you talk to executives of Keurig Dr. Pepper or Coca-Cola or whatever, and I'm assuming that they're all thinking like, oh man, we sell all of this junk, basically, and now people aren't going to want it as much. We've been tuning it for addiction this entire time. And I could just kind of wonder, like, how much have we seen a Ozempic already begin to affect like that part of the economy? Like, do you see like real signs that there is an Ozempic effect that is spilling over to other companies just as we've seen AI essentially zero out the value of some firms.

I think there's more like, Rob, it's like a fear factor, isn't there? I think more than there is so like that we can actually see in the data that you're seeing a big drop off because as you said about the statistics, I mean, it's, like, 10% of people have been on GLP-1 drugs. And so, you've still got a lot of the population that are still eating and drinking as normally. So, one interesting situation that came up about it was 2023 and it was when Novo Nordisk, which makes Ozempic, came out with a study. Basically, saying that if you were on these drugs, you were a lot less likely to go on dialysis. So, a lot of people who suffer with type two diabetes, unfortunately will often end up needing dialysis treatment as well because of the impact on their kidneys. And Fresenius, which makes the dialysis kits, their shares absolutely tanked the day that that study came out. Not because they were seeing a slowdown in sales in dialysis, it's just that they were sort of relying on the studies, they were relying on a steady stream of type two diabetes patients slash obesity patients. And that looked like it was going to be problematic. So, I think as well, when I, when I go out and I talk to like executives of big drinks companies, they say to me, investors are calling them regularly saying, can you see it yet? What are you seeing? And they do say, honestly, they can't really see it yet, but one of Diageo, for example, which makes Guinness and Baileys and all that kind of stuff. One of their big investors actually sold out and basically cited this fear of the impact GLP-1 was going to have.

The drugs, it shows both how far they have to go and also what they can do. So, for instance, my brother is an orthopedic surgeon. He replaces joints on people all the time. Most of his patients are obese because when you weigh a lot, you put a ton of pressure on your knees and hips. So, if you actually, if you're on these drugs, you're probably going to be less likely to have hip surgery or knee surgery. And that shows why these drugs are actually kind of useful. You know, they're going to it's a high quality of life if people don't have to have these surgeries. But at the same time, will this hurt the industry? Yes, it will. But that's a net gain for society, right, if people are healthy and thin as opposed to having surgery.

Right. And I mean, thinking about net gains for society, obviously this has created a lot of value in these companies, right? Like Novo Nordisk market cap exploded for a while, I know. I have a lot a family in Denmark. There is effectively the Novo Nordisk company town now. It's sort of an old oil boom town style thing and you go through there and there's a ton of construction and whatnot, but it's extremely volatile, right. It rests on a knife edge because I know right now my impression is what they're trying to do is introduce new form factors of these drugs, right, or introduce new combinations of these drugs that maybe offset some of the side effects or some of the suboptimal ways of losing weight. Can you walk me through what's happening there and like why everybody is so on a hair trigger about it?

I think, one of the things, as you said, so there's two different situations, we'll say, so Novo Nordisk, were out first with Ozempic and Wegovy. And they, so Ozempic is the diabetes drug and, Wegovy, is the obesity medication, but they both, both help you lose weight. So, the patent on that compound, that's the secret sauce of those two drugs runs out in 2031. So, they have been kind of desperately doing what pharma does, which is try and come up with a replacement for those drugs, a better drug. More tolerable for people who are taking it. So, it's less gastric issues. People have lots of side effects on these drugs like nausea and vomiting and things, and also more weight loss. And so, they came out with a kind of critical part of that study last December. And I think it was like $93 billion was wiped off their share price in a day based on this, like again, not a failure, just less than what people had expected and put a question mark, basically, over whether people would actually shift off Ozempic and Wegovy, when the patent runs up, whether they even need to do that. And then Eli Lilly is kind of forging ahead with all sorts of different types of, again, weight loss drugs, trying to solve this problem of getting rid of the side effects, making it more accessible for lots of different types of patients, because again, these, these drugs aren't the easiest things in the world, they're- first of all, they're once weekly, but it's a shot. So, if you don't like needles, which lots of people don't, you may not want to take these drugs at all. There is, as I said, there's the side effect issue. So, making them in tablet form, even if the weight loss wasn't as high as the shot, would probably be better for the manufacturer, cheaper for them. And probably people would prefer it as well, even if it meant that they had to take a tablet once a day. People are used to taking vitamins and things like that once a days. So that's kind of where they are. That's what they're trying to do. But Rob, I'm sort of curious what your thoughts are on why, even though they're scrambling so much to make these adjustments, why people are reacting the way they are.

Well, these are big, big pots of gold, right? And they're growing fast. So, Lilly, for instance, this year, their drug, Tirzepatide, it's known as Mounjaro, or I forgot the name again. But it's basically two versions of the same drug.

Zepbound.

It's going to be the biggest selling drug in the world this year probably, about over $30 billion of sales. And it's growing. Last quarter it grew 45% at an annual rate. So, that's, and it's accounting for most of the companies. Sorry, Lilly is a company grew 45%. So that means the drug itself was growing even faster. So, this is a big, big pot of money and everyone is chasing it. So, it's almost rare to find a big pharma company that doesn't have obesity drugs in development. And what's more, so it's not just convenience like Aimee says, obviously that's a huge thing. If you take a pill, it's easier than a shot. They're also working on improvements, such as, if you take obesity drugs right now, you end up losing muscle and you also lose some bone, just because as you lose weight, you need less of this and your body kind of takes it equally.

You lose bone?

Yes, bone density.

Wow, okay.

And minerals, right Rob, you mean like there's some mineral leaching as well that's caused by the drugs as well.

See that actually seems substantial, I have to admit didn't know that as somebody who only casually follows this that seems like actually pretty serious, right?

Well, you do it whenever you lose weight. If you lose a weight and do it to exercise, that happens to everyone. And these drugs cause you to lose a lot of weight quickly, so it's natural progression.

But it is problematic for like if you're an older person, I think you lose 40 % muscle mass on these drugs. On a typical diet, you lose 25 % muscle. Now, if you are working out alongside that, obviously that is mitigated and you're taking protein. And that's what a lot of people are encouraged to do. But yes, it is, as Rob said, it's-

But obviously, for the pharma companies, the holy grail would be have a drug not only makes you lose weight, but also makes you gain muscle, or at least keep your muscle and bone on. And they're testing things like that. They're also testing things, like it seems like inflammation has something to do with weight gain. And so, they're trying drugs which reduce inflammation and may actually, you now, have other good biological effects, like perhaps less stroke, less other things, and it also loses weight. And it could be these things work together. So, you're on a Ozempic for one, and you're on this other drug for another, and they work together, and it actually has an even better result.

But I was, I sort of wondered as well, Rob, like what you kind of think about, I mean, if you think about sort of the future and you and I've discussed this before about the fact that Eli Lilly and Novo are duopoly, right? And typically, what you see where there's two companies that have dominated a market, first mover advantage, they don't cut prices, but we are seeing them cutting prices at Novo, aggressively cutting prices in the US market, which I think is very interesting. And I have sort of, my theory is that, as you said, the competition in the sector, the fact that AstraZeneca and Roche and all of these other competitors are moving in as fast as they can, means that they just want as much of the market as they can, even if it means it's less profitable. But I absolutely wonder what you think.

Yes, it's a land grab and you can see that for two reasons. First, like you said, typically when there's only two companies or even three companies, they don't actually compete on a price. They do lots of ad campaigns. In America, you have tons and tons of commercials, and they may even raise prices. Because they're all working together, they don't actually admit it to the government because that's an antitrust problem, but they don't actually, they don't compete on price. Here, they are competing at a price and also, they are advertising extremely aggressively. And so, what they're doing is they're trying to grab as many patients as early as they can because patients may say, hey, it's working for me, why would I try something else which may cause me side effects or something like that. And so, since it's new and it's growing so quickly, they're all getting as many patients as they possibly can. And that's causing problems for Novo. And then also the market's freaking out because everyone's saying okay. Well, if this is with two companies, what's going to happen when there's three companies or four companies or five companies?

That's kind of what I wanted to ask to round this out here is like, what does the path of development look like from here? Like you say, I presume Novo and Eli are not going to be the only companies that are chasing this. We have various sort of combination therapies that you're talking about to target the side effects. We have new form factors coming down the pipe. Obesity and excessive weight are still a huge side of problems, there's still like a ton of space here, like the pie just seems so big, like can't everybody just grab a piece?

Yes, they will, but they won't be necessarily as profitable as they are now. I mean, there will be generic versions of these drugs, obviously, Novo being one of the first ones. And a lot of, like, you look at Statins, for instance, for cholesterol, a huge percentage of population takes them. The drug companies don't make any money off them anymore, really, because they're all generic. But for a while, they were huge. And it kind of went a thing like this because there were originally a couple of them and then more entered, but they kept on the market expanded so quickly. So, it really depends on how quickly the market expands versus how quickly other companies come in, I think.

And whenever I talk to people at say, Novo Nordisk, they compare it to Viagra. They kind of see it as this sort of like, well, see it's a similar kind of situation. It's a stigmatized disease or, what would you call it, affliction, I suppose.

Condition.

I mean, so there's, there's that element to it. It really works, which again, Viagra and Ozempic and all those, they all have that sort of same thing. But once that market opens up, once generic versions of those drugs can come in, it's very difficult for I think these drug companies to say, ours is better. This version that we have is so much superior than the one that we've been telling you about and marketing so aggressively to you is so effective. You know, I think that's sort of the problem that they face. But I have to say I've been so surprised by the pace of the price cuts and what it has done to the valuation of the companies because even as Rob said that Eli Lilly is still growing gangbusters. So is Novo Nordisk, they're growing insatiably well. But Novo Nordisk, anyway, is being valued like a pretty ordinary pharmaceutical company, like the same as AstraZeneca in the UK, again, a successful pharmaceutical company, but by no means the one that had cornered, this pot of gold, as Rob said. So I don't know whether I have a question, there's sort of a question mark over me is whether this is overdone, whether investors have just gotten way too bearish on this market or whether it is just going to be this sort of free for all where everybody's involved and everyone is sort of cutting prices and these end up very like Statins and that they're just cheap and available to everybody.

Yes, and I also wonder whether, given that you've got all these new combination therapies coming down the road, is it possible you get some sort of fragmented, hierarchical, kind of stratified market where effectively lower-income consumers of these drugs are on generic Ozempic as that comes off, but then the Ozempic where you don't lose bone mass is sort of there for the middle classes and the rich, and then you just keep getting like a feed through of ultimately like change therapies like that, so the new better version of weight loss where you either don't lose muscle or you gain muscle or etc is it possible that like refreshes the market through the next decade.

Yes, probably what you'll end up with, if you look at Statins, what happened was typically at first the expensive ones did very, very well. And then what happened was they introduced tweaked versions which were slightly better. They gained share while a lot of people switched over to generic. And then eventually it was just, it was eventually all generic. So, the market will be continually expanding in number of people. But the number of dollars is probably going to peak around the time one of them goes generic.

One thing as well, I think is sort of interesting, like Eli Lilly does have some diversification, right, Rob? Like they do some neurological drugs, they have some oncology, but Novo Nordisk is really type two diabetes and obesity. That is a very, very large part of their business. I think they've got a very small amount of kind of rare diseases that they focus on as well. So, it is interesting because these guys have spent basically a hundred years treating diabetes and it has sort of morphed into now a weight loss empire for them. But I sort of the question that I would have is where did they go if this turns into Statins, like where does a company the size of Eli Lilly go? If this just if the profits and the revenues sort of evaporate quite quickly and are dispersed among the market.

They'll have to reinvent themselves. That's the thing about pharma companies, they have to continually do that. I think it's harder though, if your specialty is, you've essentially been so successful, you've wiped yourself out.

Definitely a problem for Denmark where they literally have to adjust the GDP figures to take account of how large Novo is now. But look, this has been fascinating, that's a great place to wrap it up. Rob, thanks so much for joining us on The Viewsroom.

Thank you.

Thanks for tuning in. This podcast was produced by Cheryl Peña in New York and Gregory Garner in Toronto. You can listen to a new episode of The Viewsroom every Thursday on the Reuters app or your favorite platform. And don't forget to tune into our sister podcast, The Big View every Tuesday, as well as the other great podcasts from the Reuters team. If you like what you heard, please follow The Viewsroom and let us know what you thought. And check out our views on the biggest stories in business and finance every day at Breakingviews.com and Reuters.com.