A Tsunami of New GLP-1s May Hit the Market — What Does That Mean for Costs?

Updated July 2024

These days, many of the most frequently asked questions that we receive focus on GLP-1 medications––the popular and highly effective weight loss drugs you’ve been hearing about in the news. GLP-1s are a type of incretin mimetic, medications that affect gut hormones and cause weight loss.

Beyond their effectiveness, price point is a widespread concern for stakeholders throughout the healthcare industry, as well as for chronic disease patients who might hope to use them. Ozempic®, for example, costs an estimated $10,000 a year per person, placing significant financial strain on payers as demand grows.

Michael Thompson, chief executive of the National Alliance of Healthcare Purchaser Coalitions, told the Wall Street Journal that the “huge cost burden on health plans” is a key issue employers are wrestling with amid surging demand for GLP-1s. In fact, the University of Texas System has seen costs for GLP-1s more than triple to about $5 million a month. Now, it’s ending coverage for Novo Nordisk’s Wegovy and Saxenda for its employees and others covered by its health plans, citing the “current rate of prescription drug expenditures” in a university benefits newsletter.

However, cost concerns aren’t slowing down the GLP-1 market, which is expected to reach $55.8 billion by 2023. While brands like Ozempic©, Wegovy©, Mounjaro©, and Trulicity© are currently ruling the space, only Wegovy has FDA approval for weight loss; pharmaceutical companies are scrambling to get more weight loss drugs approved by the FDA and put more GLP-1s on the market.  Will more supply to meet growing demand for these medications bring prices down? And just how many GLP-1s are there? 

We broke down the list of GLP-1s by FDA approval stage, and spoke with Chang about what more GLP-1s could mean for costs. 

*Note: This list is based on Omada internal research completed in July 2023, and may quickly become out of date. 

Before we dive into the incretin mimetics coming down the FDA-approval pipeline, let’s do a quick review of the drug development process. “While the time frame varies, it commonly takes anywhere from 10-15 years for a medication to reach the market,” Chang says.

Why does it take so long? What’s happening in the process?

A lengthy list of drugs in the FDA-approval pipeline may not necessarily translate into all, or even most of these contenders making it to market. Only about one-third of experimental drugs that pass phase one and two will progress to phase three; and only 25 to 30% of experimental drugs make it past phase three. 

“I don’t even pay attention until phase three,” jokes Chang. Still, even if we are to assume all or most of these drugs secure FDA approval, Chang cautions against believing that will automatically bring costs down. 

“What I hope is that with more GLP-1s there will be more competition that will drive prices down, but what we’ve seen historically is that’s not always the case,” Chang says. Let’s look at insulin, a life-saving medication discovered over 100 years ago. And yet we saw the consumer price of insulin increase in the last decade. Now, thanks to new legislation imposing limits on out-of-pocket costs for patients, we started to see the price come down.

Chang also noted that the current obesity-approved GLP-1s are all injectable, which typically means longer patents. That can delay the process of generic versions (biosimilars) of FDA-approved GLP-1s from coming to market. Which, if it occurred, might drive down prices due to competition.

Omada has actively supported members with diabetes on GLP-1s since 2019. Rather than rushing to write prescriptions, we’ve initiated program enhancements for members taking GLP-1s, in response to the growing interest and demand. In line with FDA guidelines and research on GLP-1s, our approach emphasizes sustained, long-term weight loss through supporting behavior and lifestyle changes alongside medication. 

Dr. Carolyn Bradner Jasik, Omada’s Chief Medical Officer, put it best in a press release announcing the launch of our GLP-1 support program: "The evidence is clear that GLP-1 medications without comprehensive behavioral support puts patients at risk for weight regain once the medication is stopped. A prescription alone does not change habits, but adding sustained support from a behavior change program can."

Learn more about GLP-1s.