Popular weight-loss drug Wegovy could potentially be more accessible to individuals under various health insurance plans following the successful results of a late-stage trial, according to analysts on Wednesday. Novo Nordisk’s highly anticipated “SELECT” trial surpassed expectations by revealing that Wegovy can reduce the risk of major cardiovascular events like heart attacks or strokes by 20%. The pharmaceutical company plans to seek approval from U.S. and European regulators to incorporate cardiovascular benefits into Wegovy’s drug label. Peter Verdult, a pharmaceutical analyst at Citi, believes that these trial findings will increase patients’ demand for the drug, as well as physicians’ willingness to prescribe and health insurers’ willingness to reimburse. Previously, some insurers were hesitant to cover the drug due to its high costs and limited data regarding its health benefits.
The SELECT trial, conducted over five years, involved over 17,600 overweight or obese adults with established cardiovascular disease and no history of diabetes. Verdult emphasizes that the trial’s positive results could improve access to obesity drugs as a whole. While reimbursement for obesity drugs has been gradually improving in the U.S. and the U.K., more evidence is needed before widespread coverage is adopted. Eli Lilly, the pharmaceutical company producing a rival obesity drug called Mounjaro, acknowledges that the trial results could provide assurance to some insurers but doesn’t expect immediate widespread coverage. Additionally, the World Health Organization reports that global obesity rates have nearly tripled over the past decade, with cardiovascular diseases being the leading cause of death worldwide.
The weight-loss drug industry is projected to reach a value of up to $200 billion within the next ten years. Novo Nordisk shares soared by 17% following the trial results, possibly positioning the company to surpass luxury goods giant LVMH as Europe’s most valuable firm by market capitalization. Verdult believes that these gains are likely to persist due to the lack of competition in the market. However, concerns have emerged regarding potential side effects and risks associated with these weight loss drugs. The European Markets Authority initiated a review last month due to reports of patients experiencing thoughts of suicide or self-harm. Novo Nordisk and Eli Lilly are also facing a lawsuit alleging that their drugs caused stomach paralysis. Despite these concerns, Verdult argues that the drugs’ risk-benefit profile remains positive.
While increased demand for Wegovy is expected, Novo Nordisk and Eli Lilly have already warned of supply constraints. The companies have advised physicians to limit prescriptions to patients with medical needs. Zhyar Said, a healthcare analyst at pharmaceutical market research firm Citeline, predicts that the increased demand for Wegovy may lead to shortages that could last until 2024. Eli Lilly, in its second-quarter earnings announcement, mentioned intermittent delays in fulfilling orders of certain Mounjaro doses due to high demand. Novo Nordisk, which remains in a quiet period before its earnings release on Thursday, stated in May that it is increasing its supply and employing new contractors. However, Verdult cautions that resolving the shortfall will not happen quickly.