(This story is from our new Health Tech newsletter. If you’d like to sign up, just click here.)
The fight to dominate the market for weight loss shots has never been hotter, but drugmakers still can’t make enough of the drugs to meet overwhelming demand. Now new competitors like Amgen are wading into the arena.
Endpoints News spoke with Ro CEO Zachariah Reitano after Eli Lilly and Novo Nordisk reported first-quarter earnings this week to discuss the pharma giants’ diverging strategies to win customers, Lilly’s push into telehealth, and how Ro is navigating persistent supply shortages. The digital health startup, valued at $7 billion when it last raised money in 2022, is a major player in the market for online anti-obesity prescriptions.
After making a name for itself helping prescribe erectile dysfunction pills, Ro’s weight loss program offers customers access to GLP-1 anti-obesity drugs alongside video visits with a provider and coaching from nurses. Late last year, Ro clinicians began prescribing compounded semaglutide, the active ingredient in Ozempic and Wegovy, to patients in its program affected by drug shortages. Some critics — particularly drugmakers — say compounded drugs are risky, because they haven’t been tested or approved by the FDA.
Lilly and Novo’s strategies to win the market
GLP-1 medications still face coverage and supply issues as demand for the new treatments outpaces supply.
“They are spending as much money as they possibly can to increase supply. It is still being outstripped by demand,” Reitano said.
Reitano said Lilly and Novo look to have different approaches to managing the shortage of their medications. While Novo is “prioritizing the ongoing patient experience” by limiting lower doses, Lilly’s going after new patients, he said.
“What Novo has done is choked supply for the initial doses to ensure that patients on the higher doses can continue to get access, and that is from an established market share position,” Reitano said. “And then if you look at what Lilly has emphasized, the 2.5 mg [starting dose] of Zepbound is not on shortage, but every dose after that is on shortage. I think Lilly is probably doing that with the anticipation that they can make follow on supply fast.”
It’s paying off for Lilly. “You now see Zepbound actually being at greater than 50% [new market share], even though the drug hasn’t been in the market nearly as long,” Reitano said. Meanwhile, Novo said the net price of Wegovy is dropping. That’s despite the shortage issues the medication faces.
“They are anticipating a world in which that isn’t the case. They know when their supply catches up, they will have to be on more formularies and be covered by more people to increase that access. I also think you see, even with two players, competition starting to serve its purpose there,” Reitano said.
What Ro’s seeing with insurance coverage
Reitano said about 50% of Ro patients are covered by insurance, with more than 80% paying less than $100.
“But that [other] 20%, their copay could be hundreds of dollars, it could be $500, could be $800 … and that impedes access, as you can imagine. And then the 50% who are not covered, a fraction do pay cash,” Reitano said.
Wegovy’s label expansion to reduce the risk of cardiovascular events is starting to factor in.
“The label expansion is starting to take hold in terms of coverage as well. You’re seeing both Novo and Lilly invest ahead of the curve in chronic diseases that are typically covered, that are downstream and strongly associated with obesity,” Reitano said. “The interesting thing there will be to see which drugs they do it for, because they have to balance both their current drugs and making sure that the breadth of the label is as expansive as possible — and their future pipeline that’s even more effective.”
Despite access hurdles, Ro is still eyeing a big opportunity to get more patients prescriptions.
“The market size and the number of people who are impacted by this, and have coverage and their average copay is less than $100, is still in the tens of millions,” he said. “Coverage, I think, is less of an impediment for a single startup to grow, and far more of an impediment for equal access across the entire country.”
Eli Lilly’s digital health platform LillyDirect is a win for virtual care
Ro has some new competition from Lilly’s own direct-to-consumer play that connects patients with telehealth doctors who can prescribe Zepbound. Reitano’s not worried, though.
“It’s an awesome explicit endorsement that telehealth can be a fantastic and high-quality way for patients to get access to obesity care. What it is, though, is it’s still a network of different services that are sort of daisy-chained together,” he said.
Ro’s done a ton of work to make sure its own process of onboarding, diagnosing, and caring for patients is seamless, Reitano said.
“On our side, we see tremendous benefits to taking out a lot of complexity for patients and not having them need to go to multiple different places,” he said. “But overall, I think LillyDirect is a great thing for patients, and for some of our patients, we actually use LillyDirect on the pharmacy side if they need to use a savings card.”
What Ro’s seeing with GLP-1 drug shortages
Reitano said there’s a “mismatch” between the shortages reported and what pharmacies and patients are seeing.
“This week, you saw 1.7 mg of semaglutide/Wegovy be pulled off the shortage list and be listed as available. We call pharmacies throughout the country — just about 50% of them are backordered on 1.7 mg and have materially less supply than other doses,” he said. “That is challenging, because providers and stakeholders in the healthcare system generally are having conversations with patients and making decisions based on that availability.”
In some cases, Ro turns to compounded pharmacies to get the medications for patients.
“We pursue branded options, first and foremost, for patients. And [compounded GLP-1s] are a method for patients during the shortage to maintain continuity of care, constantly have access and not have to rely on second-line, potentially less effective therapies during their treatment. It’s the minority of our patients,” Reitano said.