Where the current status of the blockbuster weight loss medication market lies and what‘s on the horizon next

The demand for leading weight management and diabetes medications remains unmet. 

From new contenders to innovative applications, the sector is rapidly entering a significant growth phase. However, elements such as insurance coverage, pricing, generic medicines, and the introduction of new formulations will ultimately shape the extent of treatment adoption.

Eli Lilly and Novo Nordisk continue to dominate the market, as the appetite for their weekly injectables remains strong. Eli Lilly has achieved significant market progression, announcing in its third-quarter earnings update on Thursday that it increased its share for the fifth consecutive quarter, with its medications accounting for almost 60% of prescriptions within the injectable diabetes and obesity category.

Nonetheless, both companies are intensifying their efforts on boosting supply, exploring new applications for their treatments, and preparing the next generation of weight management drugs, including more user-friendly pills. 

A range of pharmaceutical companies, from emerging biotech firms to established pharmaceutical corporations, are striving to seize a portion of what analysts estimate could become a nearly $100 billion market by the close of the decade. There appears to be significant opportunity for newcomers: McKinsey forecasts that 25 million to 50 million individuals in the U.S. could benefit from GLP-1s by 2030. 

Almost every major pharmaceutical entity is investing in weight management drugs, often through partnerships with smaller firms, including those based in China. While some experimental treatments are further along in development, all are anticipated to be years away from market availability, and their competitive viability will depend on subsequent data demonstrating their efficiency and patient tolerability.

As competition intensifies, a number of patients are still finding it challenging to access these medications. Certain insurers, including Medicare, do not provide coverage for GLP-1s targeting weight loss, which can cost about $1,000 monthly prior to rebates.

Eli Lilly and Novo Nordisk have initiated discount initiatives for patients paying cash to bridge the accessibility gap, while an increasing number of companies are providing coverage as GLP-1s demonstrate additional health advantages like addressing obstructive sleep apnea and chronic kidney conditions, as well as reducing cardiovascular risks.

However, some patients still resort to lower-cost, generic options of branded medicines – despite these alternatives being restricted in numerous instances. Although Novo Nordisk and Eli Lilly’s products are no longer in short supply, both firms are taking measures against pharmacies, medspas, and other vendors that mass-produce and distribute less expensive compounded GLP-1s.

As new challengers and lower-priced pills emerge, enhancing access to drugs will primarily hinge on how firms like Novo Nordisk and Eli Lilly decide to price their medications moving forward.

Here’s what to be aware of concerning the flourishing weight management medication market. 

Eli Lilly has emerged as the frontrunner in the injectable GLP-1 market. Once in the lead, Novo Nordisk has lost market traction, particularly in the U.S., due to supply chain challenges, the rise of Eli Lilly, and the proliferation of compounded alternatives.

Eli Lilly surpassed its Danish rival for the first time in May when it captured 53% of the market share in the first quarter. By August, Eli Lilly reported its share increased to 57% in the second quarter.  

TD Cowen analyst Michael Nedelcovych attributed this trend to the fact that Eli Lilly’s injections have shown better safety and efficacy compared to Novo Nordisk’s offerings. Lilly’s diabetes treatment Mounjaro is regarded as a superior option than Novo Nordisk’s Ozempic. Real-world evidence and a head-to-head clinical study suggest that Eli Lilly’s Zepbound contributes to greater weight loss than Novo Nordisk’s Wegovy.

“There’s improved efficacy, and at least anecdotally in real-world applications, it’s more tolerable,” Nedelcovych stated. “In our field, that’s often all that’s needed for gaining market share, and this is happening quite swiftly.” 

Investors have sold off shares of Novo Nordisk, which has seen a nearly 40% decrease this year. In July, Novo Nordisk revised its profit and sales expectations, citing compounded drugs affecting Wegovy’s market. The company had already lowered its 2025 projections in May.

As competition grows, data from Novo Nordisk’s experimental drugs have also disappointed Wall Street and raised questions about the progression of its drug development beyond Wegovy and Ozempic. 

BMO Capital Markets analyst Evan Seigerman noted in September that the company had set expectations for its next-generation obesity drug CagriSema too high, had been slow in launching direct-to-consumer sales for its in-demand drugs, and had seen a “lukewarm initial reception” for compounders providing generic treatments. 

Additionally, Medicare is negotiating prices for Novo Nordisk’s semaglutide – the active ingredient in Ozempic, Wegovy, and its diabetes pill Rybelsus – to take effect in 2027, which could further impact revenues. Eli Lilly’s tirzepatide, the active substance in Mounjaro and Zepbound, likely won’t enter price negotiations until the end of the decade. 

Novo Nordisk is banking on its new CEO, Mike Doustdar, to help reclaim its position. He took leadership in late July following the board’s decision to dismiss the former CEO, Lars Fruergaard Jorgensen. 

Doustdar is already implementing change: in September, Novo Nordisk announced plans to eliminate about 9,000 jobs, equating to roughly 11.5% of its global workforce.

The pharmaceutical giant faces ongoing challenges. Recently, Novo Nordisk stated multiple board members will resign following disagreements with the controlling shareholder, the Novo Nordisk Foundation, regarding board composition.

Novo Nordisk also grapples with another substantial issue: the availability of less expensive, compounded semaglutide alternatives. 

Currently, the firm “is definitely more susceptible” to competition from generics compared to Eli Lilly, mainly due to the fact that most of these alternatives contain or purport to be semaglutide, according to Cowen’s Nedelcovych. He indicated that Novo Nordisk is “already at a disadvantage” in the market and cannot afford to lose additional share.

Patients turned to compounded GLP-1s when branded injectables were in short supply over the past two years, or when these options were not covered by their insurance plans.

Compounding refers to the practice where pharmacies mix medication ingredients to create a tailored version meeting a patient’s unique requirements, such as those who have allergies to certain components. In times of shortage for a branded drug, pharmacies can produce larger quantities of compounded alternatives to fill the void.

Nevertheless, both Novo Nordisk and Eli Lilly have invested billions in enhancing their production capacity for their injectables, with evident results already materializing. 

The FDA announced an end to the shortages of tirzepatide and semaglutide over the past year. These decisions legally prohibited compounding pharmacies from manufacturing and distributing generic versions of these medications by deadlines that lapsed earlier this year, except in unique instances where medical necessity is established. 

Novo Nordisk indicated in June that several large-scale compounding pharmacies (503B) have reduced production, yet accused others—including those associated with Hims & Hers—of still offering the medications under a “false pretense” of customization. In August, Novo Nordisk executives pointed out that approximately 1 million U.S. patients are currently using compounded GLP-1s.

The dilemma similarly affects Eli Lilly. While the FDA oversees 503B pharmacies, the bulk of 503A facilities come under state regulation. Nedelcovych compared shutting them down to a game of “whack-a-mole.” Eli Lilly and Novo Nordisk’s legal actions against telehealth providers, pharmacies, and others since 2023 have consumed resources and time, yielding mixed legal results.

The FDA also does not seem to be taking a vigorous stance against compounded GLP-1s: the agency in September released a “green list” of imported GLP-1 medication ingredients allowed into the U.S.

Insufficient insurance coverage for GLP-1s is excluding patients who cannot afford their approximate $1,000 monthly costs. This access disparity has become a contentious political and corporate issue, intensifying pressure on employers and the government to broaden coverage.

Numerous health insurance programs, including Medicare, encompass GLP-1s for diabetes management but not for weight management. Medicaid coverage for weight management drugs is limited and varies across states, as per data from health policy research organization KFF. 

Coverage for GLP-1s aimed at weight loss has seen a slight increase: A May survey from over 300 firms by the International Foundation of Employee Benefit Plans (IFEBP) indicated that 36% offered coverage for GLP-1s targeting both weight loss and diabetes, an increase from 34% in 2024. 

Nonetheless, many employers and health plans remain cautious due to the high costs. In 2025, weight-loss GLP-1s accounted for an average of 10.5% of total annual claims among employers, rising from 8.9% in 2024 and 6.9% in 2023, according to IFEBP. 

“If employers weren’t already committed, they’re still hesitant,” remarked Julie Stich, vice president of content at IFEBP. “Cost considerations are still a significant issue for them.”

Some plans worry that patients may not adhere to the medications long-term due to gastrointestinal side effects, such as nausea and vomiting, and could regain lost weight, added John Crable, senior vice president of Corporate Synergies, a national insurance and employee benefits brokerage and consultancy. Employers, facing potential high turnover, are also reluctant to cover expensive medications for employees who might leave within a few years, Crable noted.

Crable pointed out that new direct-to-consumer programs from Eli Lilly and Novo Nordisk—allowing patients to pay cash for treatments at less than half the listed monthly price—could also deter employers from offering coverage.

Stich indicated that employers also have inquiries regarding how oral weight management drugs, which could be available as early as 2025, might impact demand and expenses.

However, she expressed optimism that coverage may still expand, especially as GLP-1s receive new approvals for additional chronic conditions. Wegovy has been approved for reducing cardiovascular risk and fatty liver disease, while Zepbound has received clearance for sleep apnea.

Novo Nordisk is also exploring the use of semaglutide in Alzheimer’s, with initial late-phase trial results expected this year. Should this study demonstrate that GLP-1s lower the risk of cognitive decline, it could significantly benefit Novo Nordisk and Eli Lilly, as it might encourage longer patient adherence to these medications, according to Leerink Partners analyst David Risinger.

“The investment in GLP-1 therapy is based on the hope that obesity or other conditions will improve, ultimately leading to reduced healthcare expenses for these employees,” Stich remarked.

Some plans have also enacted cost management strategies, such as BMI criteria, to control expenses.

Stich added that broader Medicare coverage could eventually influence private insurers to follow suit. The Trump administration is set to pilot coverage of weight management drugs under Medicare and Medicaid, potentially expanding access for millions of older Americans, reported the Washington Post in August.

While Novo Nordisk currently sells an oral GLP-1 for diabetes management, both the company and Eli Lilly are poised to introduce weight loss-specific pills to patients soon.

Some experts and analysts believe these could fundamentally change the market, facilitating broader patient access to treatment and addressing supply shortages of existing injectables. However, others question the extent to which pills will play a role in this sector considering that some seem to be less effective than injectables and potentially entail more side effects.

Novo Nordisk’s 25-milligram oral semaglutide could gain approval for weight management by year’s end, marking it as the first needle-free weight loss alternative available. The daily pill is reported to be somewhat more effective than a competing oral GLP-1 from Eli Lilly named orforglipron, according to separate phase three trial data. 

Nevertheless, Eli Lilly’s pill may offer distinct advantages. Both treatments work by simulating the GLP-1 gut hormone to reduce appetite and control blood sugar levels. However, while Novo Nordisk’s pill is a peptide-based medication, orforglipron is classified as a small-molecule drug.

This distinction implies that Eli Lilly’s option is absorbed more readily in the body and does not necessitate dietary restrictions as required by Novo Nordisk’s formulation. Some analysts believe orforglipron will also be more straightforward to manufacture at scale than Novo Nordisk’s product, which is critical due to demand for obesity and diabetes injectables surpassing supply. In August, Eli Lilly CEO David Ricks informed CNBC that the company aspires to globally launch its pill “by this time next year.” 

In an August report, Goldman Sachs analysts predicted that daily oral medications will capture 24% — approximately $22 billion — of the 2030 global weight loss drug sector, which they’re projecting to be worth $95 billion. 

Goldman’s analysts anticipate Eli Lilly’s pill will command a 60% share — or roughly $13.6 billion — of the oral treatment market segment by 2030. They predict Novo Nordisk’s oral semaglutide will hold a 21% share — approximately $4 billion — of this same sector. The remaining 19% will be allocated to other emerging pill formulations, according to the analysts.

TD Cowen’s Nedelcovych expressed caution about his outlook on oral weight loss drugs. He conveyed that this caution stems partly from the belief among physician advisors and other experts that injectables, which offer greater effectiveness and tolerability, will dominate the market for the foreseeable future. 

Nedelcovych suggested that even the convenience of a daily pill may not suffice to sway patients to switch, considering many “really don’t mind” having a weekly injection. He also indicated that transitioning from injections to pills for maintenance “doesn’t appear sensible when queried with physicians.” 

He argued that if pills are less effective in promoting weight loss, it raises concerns that patients who initially achieve significant weight loss with injections may regain weight upon switching to oral medications. A phase three trial by Eli Lilly, evaluating orforglipron’s effectiveness in sustaining weight loss, is anticipated to clarify this matter. 

Companies have indicated that pills might reach patients who avoid injections due to needle fear. However, Nedelcovych mentioned the “fate of oral weight loss treatments could significantly depend” on another demographic: patients who stand to gain from weight loss therapies but shun injections, believing them to be only for serious conditions.

“These individuals are virtually absent in the marketplace right now,” he noted. “But they might be more open to an oral treatment perceived more like a vitamin.” 

The pressing inquiry for health experts is how companies will price these pills. 

“If it wasn’t for their potential lower production costs, I wouldn’t care” about pills, said Dr. Caroline Apovian, co-director of the Center for Weight Management and Wellness at Brigham and Women’s Hospital.

The direct-to-consumer options from Eli Lilly and Novo Nordisk price Zepbound and Wegovy at about $500 monthly. She stated that less effective pills with more side effects will need to be priced lower than this if companies aim for healthcare providers to favor prescribing them over injections. 

It remains uncertain who the next credible player to enter the weight loss medication arena will be. Many experimental drugs from other entities may not become available to patients until the decade’s end. 

Nonetheless, several companies have made considerable progress over the past year and a half, finalizing agreements with obesity-focused biotechs or releasing promising findings regarding experimental therapies. Numerous firms are striving to foster innovation through new treatments that encourage weight loss through different mechanisms, are administered less frequently, or maintain muscle mass, among other enhancements. 

Some investors are keen to discover a medication that can achieve greater weight loss than Wegovy and Zepbound, which has adversely impacted the stock of these companies when their offerings fall short of ambitious clinical expectations. Yet health experts note that most patients do not require losing over 20% of their body weight. 

“I’m not searching for more significant weight loss anymore. What’s wrong with a 16% or 22% reduction?” asked Apovian, in reference to the weight loss levels seen with some current and experimental treatments. 

Apovian is interested in therapies that activate new gut hormones, potentially addressing patients who may not succeed in losing weight on GLP-1s. She referenced drugs targeting amylin analogs—a developing category of weight management treatment that mimics a hormone co-released with insulin in the pancreas to suppress appetite and reduce intake.

Several pharmaceutical companies, including Novo Nordisk and Eli Lilly, are betting on amylin analogs as part of the forthcoming generation of obesity medications.

Other specialists assert an ideal competitor would promote weight loss while being more tolerable than existing injectable treatments. This is crucial because many individuals discontinue those injectables and may miss out on the full health benefits due to gastrointestinal side effects like nausea and vomiting. 

Without late-stage trial results for any of the new contenders, it is premature to determine who will effectively tackle this concern.

Some medications are significantly closer to answering that question than others. 

For instance, Amgen announced in March that it has commenced two significant late-stage studies for its experimental weight loss injection MariTide, which is designed to be administered monthly or even less frequently and promotes weight loss via a distinct mechanism from competitors. 

In an intermediate-stage study, patients with obesity using MariTide lost up to 16.2% of their weight within a year, analyzing all participants regardless of discontinuations, or up to 19.9% when only considering those who adhered to the treatment. Unfortunately, trial participants encountered a significant rate of side effects and discontinuations. 

These results justify the company’s decision for a more gradual dosing schedule over eight weeks to enhance the drug’s tolerability in subsequent phase three trials. 

Some pharmaceutical firms are looking towards China for their obesity interests. For example, Merck in December acquired the rights to an early-stage experimental GLP-1 pill from the Chinese company Hansoh Pharma, in a deal valued at up to $2 billion. 

This acquisition, along with deals involving smaller entities, has raised queries regarding the future of public U.S.-based obesity biotechs such as Viking Therapeutics, which were once considered desirable acquisition targets. Some analysts contend that their experimental medications, most still in mid-stage development, haven’t sufficiently differentiated themselves from currently available treatments. 

“Until these compounds demonstrate genuine differentiation in phase three, I don’t see any rationale for pharma firms to pursue significant acquisitions to gain access,” noted TD Cowen’s Nedelcovych. 

He added that the “most apparent route forward” for U.S.-based obesity biotechs is likely establishing partnerships with larger companies for drug development and commercialization.

However, Nedelcovych pointed out that “there aren’t numerous major pharmaceutical firms available that aren’t already committed at this juncture.”