Investors say that a growing wave of appetite-suppressing anti-obesity drugs could be a boost for food manufacturers, and the market’s initially downbeat reaction may have been overdone. The growth of drugs such as Novo Nordisk’s (NOVOb.CO) Ozempic and Wegovy has propelled the Danish drug maker to new heights, with its share price quadrupling in the past five years. The drugs are once-weekly injections of a medication called semaglutide that is prescribed for diabetes and weight loss. Their popularity has soared since they hit the U.S. market in 2021, and the growth in demand has put a strain on supplies. Several hospitals have had to limit new prescriptions, and the drugs are so popular that some people use them off-label for weight loss rather than to treat obesity, which is illegal but common.
Wealthy celebrities have used the drugs to shed extra pounds, which can deplete supplies for those needing the medication to treat their disease. The FDA has warned that people using the drugs to lose weight can face severe health risks, including heart attack and stroke. But the hunger caused by the drugs has also fueled demand for some food items, like low-sugar yogurts and ice creams with less fat. And the medications can also help patients eat more vegetables and other foods that are good for them.
The growing popularity of the drugs has sparked some criticism, as well, because it may reinforce the notion that obesity is a behavioral issue that can be solved with pills. But many physicians remain reluctant to prescribe the drugs, whose costs can run thousands of dollars a month. Some patients also can’t afford the medications, often not covered by insurers.
Drug companies are working to improve the odds of getting doctors to prescribe their products. The pharmaceutical industry has given millions to groups that promote specific diseases and aired direct-to-consumer ads urging people to ask their doctors about brand-name drugs. Some drug makers are also putting up cash to support legislative efforts, such as the Obesity Action Coalition, which is pushing for Medicare coverage of the drugs.
Novo Nordisk is one of the most significant contributors to the group, contributing more than $500,000 annually, and the company supports the Treat and Reduce Obesity Act, which would reverse a ban on Medicare coverage for these medicines. But even with those resources, the lobbying effort will likely be a long haul.
The drugmakers hope that by making the medications more widely available, they can encourage doctors to treat obesity as a chronic metabolic disease and not just as a behavior that can be overcome with willpower. They are also working to develop more efficient medications that work in multiple ways to prevent people from developing resistance and have fewer side effects, such as fatigue and depression. Those advances will be critical, experts say, as the U.S. population continues to grow.