The interview partners
Prof. Dr. Patrick Da-Cruz is Professor of Business Administration and Healthcare Management at the Faculty of Healthcare Management at Neu-Ulm University of Applied Sciences (HNU) and Academic Director of the MBA program Leadership and Management in Healthcare.
Before joining the HNU, Mr. Da-Cruz worked for renowned strategy consultancies in the pharmaceutical/healthcare sector and in management positions in companies in the healthcare industry in Germany and abroad.
Hanno Wolfram worked in the pharmaceutical industry for more than 20 years, including in sales, as HR Manager, Managing Director Switzerland and Area Manager Europe. Based on this experience, he founded the consulting agency Innov8 and has been involved in consulting, change and implementation projects in numerous countries for 25 years. He is a book author, coach and lecturer at the HNU.
What are weight loss injections such as Wegovy or Ozempic and how do they work?
Hanno Wolfram: Wegovy and Ozempic are trade names of prescription drugs. Both drugs contain the same active ingredient and are manufactured and marketed by Novo-Nordisk. They are the best-known trade names in a growing list of so-called GLP-1 agonists. It has not yet been sufficiently investigated how exactly these substances work. However, the clinical effects and a favorable side effect rate were sufficient to approve this new generation of drugs for use. All existing drugs in this class are injected, usually at weekly intervals. Various effects lead to a normalization of abnormal insulin levels. There is also evidence of the normalization of lipid metabolism, blood pressure and, above all, a significant reduction in the feeling of hunger. The latter has boosted this class of drugs to such an extent that manufacturers have never been able to meet global demand. Its use as a lifestyle drug with the aim of simple weight loss leads to regular supply bottlenecks. However, the official approvals generally only relate to use in type 2 diabetes.
How do you see the market potential of such drugs?
Hanno Wolfram: The current number of diagnosed type 2 diabetics in Germany is around 10% (8.2 million) of the population. If you take the BMI as a yardstick, overweight people in Germany and the USA are now the majority of the population. In the vast majority of cases, obesity is caused by a discrepancy between food intake and energy consumption. Obesity often leads to diabetes, which illustrates both the vicious circle of diseases and the sales opportunities for hunger-modulating drugs.
After Novo Nordisk's sales of semaglutide alone amounted to around 20 billion euros in 2023, production capacities are currently being significantly expanded at a cost of billions and in various countries. One of these new production facilities is currently being prepared for operation in Mainz. Another player in this market is Lilly Pharma with its follow-on GLP-1 agonist tirzepatide (Mounjaro®). At current prices, this drug is also expected to have a sales potential of more than EUR 20 billion.
How do you expect the reimbursement of syringes to develop for payers?
Hanno Wolfram: In my view, there are two different scenarios here.
- Scenario 1: For non-diabetics, the monthly therapy costs around 300 euros and has to be paid for privately as long as it is only about losing weight. In the absence of a change in lifestyle, these drugs could become a lifelong permanent therapy, as experience shows that patients' weight generally increases again at the end of therapy. This scenario assumes that the companies' pricing will remain at the current level in the future. In this case, I believe that reimbursement by health insurance companies will be limited to use in the official indication of type 2 diabetes with obesity. Reimbursement for weight reduction with a BMI above 28 to 30 would, in my view, go beyond the scope of statutory health insurance at these prices.
- Scenario 2 could be that companies reduce prices significantly, as we have seen with biologics. We remember the price reduction of 80 % by the manufacturer of adalimumab on the day the patent expired. This only had a very brief negative impact on the company's sales. The increase in volume more than compensated for the price reduction. Significantly more patients could be treated at the expense of statutory health insurance and kept away from competitors. So as soon as there is a manufacturer who is sufficiently courageous and discovers this example for this class of medication, it is certainly conceivable that obesity will also be reimbursed. This would enable a huge increase in volume. Since prices do not simply have to be reduced today, but only rebates have to be granted, such a procedure requires a certain amount of courage on the part of the manufacturer, but it would be conceivable.
What consequences could the widespread use of weight loss syringes have for the pharmaceutical and medical device industry?
Hanno Wolfram: Drugs in this segment can become lifestyle drugs. They can prevent a large number of illnesses and improve the quality of life. As soon as patients see themselves in a position to afford this monthly expenditure, it requires significantly less personal effort or even changes in their own behavioral patterns. Most weight reductions with GLP-1 agonists are above 14 kg and can be significantly more. As it is known that many diseases are triggered or exacerbated and maintained by obesity, e.g. diabetes and diseases of the cardiovascular system, many other types of medication could be saved. The management consultancy AT Kearney assumes a sales risk of up to 23% by 2033 for German companies that could be affected in the healthcare sector. Hospitals could also be affected, e.g. by a reduction in the number of procedures involving knee replacements.
The ability of GLP-1 agonists to lower blood pressure and lipids are further qualities that may become even more apparent in future drugs of this class. Theoretically, this class of drugs could indeed become game changers. However, they could also become an example of where the limits of profitability lie for pharmaceutical companies and that many diseases can be avoided or positively influenced much more cost-effectively by changing behavior. However, many GPs are happy about these new treatment options, as it will be much easier to care for the patients concerned. The level of suffering is often reduced and the positive attitude towards life increases.
Thank you very much for the interview!
The content and statements presented in the interviews reflect the perspective of the interviewees and do not necessarily reflect the position of the editorial team.
