The global market for obesity drugs is expanding. Our U.S. Pharma
and Biotech Analyst Terrence Flynn discusses what’s driving the
next stage of global growth for GLP-1 medicines.
Read more insights from Morgan Stanley.
----- Transcript -----
Terrence Flynn: Welcome to Thoughts on the
Market. I'm Terrence Flynn, Morgan Stanley's U.S. Pharma and
Biotech Analyst. The market for obesity medicines is at an
inflection point, and today I'll focus on what's driving the next
stage of global growth.
It's Thursday, June 5th at 2pm in New York.
GLP-1 medicines have been viewed by many stakeholders as one of
the most transformative medications in the market today. They've
exploded in popularity over the last few years and become game
changers for many people who take them. These drugs have large
cap biopharma companies racing to innovate. They've had ripple
effects on food, fitness, and fashion. They truly are a major
market force. And now we're on the cusp of a significant
broadening of use of these medicines.
Currently the U.S. is the largest consumer in the world of
GLP-1s. But new versions of these medicines suggest that this
market will extend beyond the U.S. to significantly larger
numbers of patients globally. On our estimate, the Total
Addressable Market or TAM for obesity medications should reach
$150 billion globally by 2035, with approximately [$]80 billion
from the U.S. and [$]70 billion from international markets.
Now this marks a meaningful increase from our 2024 forecast of
[$]105 billion and reflects a greater appreciation of
opportunities outside of the U.S. We think obesity drug adoption
will likely accelerate as patients and providers become more
familiar with the new products and as manufacturers address
hurdles in production, distribution, and access.
Current adoption rates of GLP-1 treatments within the eligible
obesity population are about 2 to 3 percent. This is in the U.S.,
and roughly 1 percent in the rest of the world. Now, when we look
out further, we anticipate these figures to surge to 20 percent
and 10 percent respectively, really driven by five things.
First, after a period of shortages, supply constraints have
improved, and the drug makers are investing aggressively to
increase production. Second new data show that obesity drugs have
broader clinical applications. They can be used to treat coronary
heart disease, stroke, hypertension, kidney disease, or even
sleep apnea. They could also potentially fight Alzheimer's
disease, neuropsychiatric conditions, and even cancer.
Third, we think coverage will expand as obesity drugs are
approved to treat diseases beyond obesity. Public healthcare
coverage through Medicare should also broaden based on these
expected approvals. Fourth, some drug makers are successfully
developing obesity drugs, in pill form instead of injectables.
Pills are of course easier to administer and can reach global
scale quickly. And finally, drug makers are also developing next
gen medications with even higher efficacy, new mechanisms of
action, and more convenient, less frequent dosing.
All in all, we think that over the next decade, broader GLP-1
adoption will extend well beyond biopharma. We expect significant
impacts on medical technology, healthcare services, and consumer
sectors like food, beverages, and fashion, where changes in
patient diets could reshape market dynamics.
Thanks so much for listening. If you enjoy the show, please leave
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