Why Big Pharma Is Struggling to Profit From the Obesity Epidemic

New medicines offer hope to 600 million, but drugmakers face a problem.

Photographer: Justin Sullivan/Getty Images

In a decades-long struggle to control her weight, Carolyn Mills joined the YMCA many times, signed up for the Jenny Craig diet program and tried fen-phen, the drug combination later found to damage heart valves. As her size yo-yoed down and back up, her health deteriorated.

She finally found the answer in a new class of medicines. Now, those drugs and changes to her diet have helped Mills cut her weight to 250 pounds (113 kilograms) from 300 pounds over the last six months. The drawback: her out-of-pocket expenses are almost $300 a month and may head higher. She says it’s worth the cost.

Carolyn Mills
Source: Carolyn Mills

“Obesity haunts me,” said Mills, 62.

Mills highlights the difficulties big pharma faces as it seeks to profit from an epidemic that afflicts more than 600 million adults worldwide. Medicines like Novo Nordisk A/S’s Saxenda, the latest one used by the Boston resident, are safer and more effective than past treatments. Yet employers and insurers are reluctant to cover the drugs, meaning  the cost often falls on patients’ shoulders, limiting the potential market.

Drugmakers such as Novartis AG, Novo and Sanofi are pushing ahead, testing even more advanced medicines they hope will deliver greater weight loss than the drugs available today. Once seen as a problem only in wealthier countries, obesity is on the rise in lower-income regions too, increasing the risks of diabetes, heart disease and cancer. That raises health costs and contributes to millions of deaths each year. More than a third of U.S. adults fall into that category.

“Given the public-health crisis around the world with obesity, if we can find a medicine that has strong efficacy and reasonable tolerability there’s no question there’s a very large market here and it would potentially have a big impact on health care,” said Vas Narasimhan, global head of drug development at Basel, Switzerland-based Novartis.

The industry faces hurdles over and above the lack of coverage. Modest weight-loss results and criticism of medicine as a way to treat obesity mean just 2 percent of excessively overweight people rely on drugs. The history in the field is also littered with failures, making some manufacturers leery.

In 2008, a Sanofi weight-loss drug was taken off the market in Europe amid concerns it could lead to depression and suicidal thoughts, while Pfizer Inc. and Merck & Co. ended obesity programs the same year. Those drugs were designed to suppress appetite by blocking the same brain receptor that makes marijuana smokers hungry.

“There’s a gold mine available,” said Ralph Abraham, a doctor at London Medical, a clinic in the U.K. capital that started a weight-management program incorporating Saxenda. “But it’s also been a graveyard in the past.”

Scientists are drawing lessons from treating a related disease: diabetes. Saxenda, which has a list price of more than $1,000 a month and has been sold in the U.S. for two years, has the same key ingredient as Novo’s diabetes medicine Victoza and works like a hormone the body produces naturally that regulates appetite. Some doctors said they’re comfortable with Saxenda because they’ve been prescribing Victoza for years.

While Saxenda is relatively small today, its sales are forecast to climb to more than $1 billion within five years from about $240 million last year, according to estimates compiled by Bloomberg. Four other obesity drugs tracked by Datamonitor Healthcare—Contrave, Qsymia, Belviq and Xenical—accounted for just $280 million in sales in 2016. The global market for such drugs  is projected to climb to about $24 billion in a decade from about $1 billion last year, London-based consulting firm Visiongain estimates.

The average weight loss of 5 percent to 10 percent that patients see with the existing drugs doesn't “knock your socks off,” said Robert Eckel, a doctor and professor who focuses on obesity and diabetes at the University of Colorado. He said he’s only prescribed Saxenda “a couple of times because there are few people who are willing to pay that much for it.”

The next generation of medicines could work better.

Novartis has a treatment in mid-stage tests that could potentially help patients lose 10 percent to 15 percent of their weight, or even more, if trends seen in early studies continue, Narasimhan said. The company will decide how to proceed based on data due next year.

In the past “we could never thread the needle,” he said. “Now we have more mechanisms that we can take forward.”

An experimental drug Novo is developing showed in early studies it can achieve weight loss of as much as 14 percent, the company said last month. Combining it with other medicines could ultimately make it even more potent, leading to a possible reduction of more than 20 percent, Chief Science Officer Mads Krogsgaard Thomsen said in an interview.

Obese patients sometimes stop taking the drugs and regain weight when they see results plateau, and new and improved medicines may encourage people to stick with them, Thomsen said. Weight loss approaching 15 percent or 20 percent “would be a major breakthrough,” said Eric Ravussin, a specialist at Pennington Biomedical Research Center in Louisiana.

Sanofi is evaluating a drug in obese patients with diabetes that has potential to move closer to the results of surgery, said Stefan Oelrich, head of its diabetes unit. People who opt for bariatric surgery can lose more than 30 percent of excess body weight within six months. AstraZeneca Plc at the same time said it’s developing a diabetes treatment that may have potential in obesity and other metabolic diseases.

Louis Aronne, a doctor at Weill-Cornell Medicine in New York, compared obesity to hypertension, which was once regarded as a lifestyle issue and is now a field with scores of drugs. He predicted that every major medical institution would have a program focused on the disease within a decade. 

Read more on the obesity epidemic: QuickTake

Several insurers in Canada have picked up Saxenda, and health authorities in the United Arab Emirates have agreed to pay for some patients in public hospitals, according to Novo. In the U.S., legislation was re-introduced in April aimed partly at improving access to weight-loss medicines for Medicare beneficiaries. It’s hard to predict how policies will play out as Republicans seek to overhaul the Affordable Care Act, but the Obesity Society, a research group, called the proposal a key step in tackling a disease that contributes to $200 billion a year in health costs.

Doctors are gaining a better understanding of the biology of the condition, increasingly seeing obesity as a disease, while there are signs that more insurers are covering medication, said Caroline Apovian, the Boston Medical Center specialist who treated Mills. 

“We’ve learned a lot,” she said. “The treatment of obesity will prevent many other serious disorders that in the long term will save us money.” 

Mills, an operations manager at a dental practice, said she’s swimming and trying to be more active to build on the progress she’s made with drugs.

“We’re reaching the tipping point with the percentage of people who are so overweight,” she said. “It’s my hope that the tide is changing and people are understanding it’s not just a matter of pushing yourself away from the table.”

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