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Big Pharma's Next Big Push Is A Huge One
Is 60 Minutes a news show or an infomercial?
This episode was tough to tell.
One thing that was abundantly clear was that one or a handful of pharmaceutical companies are set to launch what could be one of the best-selling prescription drugs in history.
We’re not trying to sound like conspiracy theorists on this.
But when watching 60 Minutes about weight loss drugs, it’s tough not to come away with that impression (you can view the full video segment here).
Its arguments are sometimes blunt, sometimes absurd, but all the time geared towards laying the foundation for acceptance of prescription weight loss drugs.
If they are successful – and there are so many reasons to expect them to be successful – weight loss drugs will become the best-selling prescription drugs in the world.
And investors have a chance to get in now.
Read on below too and see if you agree with the setup.
2023: Weight Loss Lift Off
There are three main takeaways that the 60 Minutes feature on prescription weight loss drugs.
Some of them they wanted us to take. The first two takeaways below are likely fully intended.
The third takeaway was not obvious, but it has major implications for investors.
Here are the three takeaways:
Obesity Takeaway #1
“Scientists don’t know what caused the dramatic increase [in obesity]. But what everyone does agree on is that it's a major health crisis…”
This is starting to lay the persuasive groundwork for how dire the obesity situation is in America.
The audience is surely well aware of it.
There are tons of numbers everywhere.
Of course, there has been quite a bit of manipulation of the Body Mass Index over the years to make obesity numbers as dramatic as possible.
But in an affluent and decadent society, it is a problem.
Beyond the individual situations, the costs alone are worth addressing aggressively.
There are any number of estimates of the direct and indirect costs of obesity.
One of the most concises we’ve found was from the 2012 Journal of Health Economics.
It found it cost $2,741 more to treat an obese person, which was 150% higher than a non-obese person.
Multiply that by the “110 million Americans eligible for an anti-obesity medication” and you get $270 billion in direct additional costs.
Obesity Takeaway #2
“In 2013, the American Medical Association…finally recognized obesity as a disease. It’s a brain disease. And the brain tells us how much to eat and to store."
“96% of the Biggest Loser contestants bring it all back. Throw ‘Willpower’ out the window. The #1 cause of obesity is genetics.”
There’s a lot to be said about this quote from the show.
But before we really get into it, we’ll say there is still so much unknown about the human body.
After all, what is the optimal diet?
Is it blood type based? Activity based? Are carbs good or bad right now?
It’s like the only thing we do know about the optimal diet is that the official “Food Pyramid” is not even close to being right.
With that in mind, we’ll get back to the quote.
The goal of this argument is to condition people to believe there is nothing they or that obese people can do to prevent obesity.
Again, no one really knows. But we do know it’s looked at often more as a result of lifestyle choices than genetics.
Rightly or wrongly, they are trying to change that perception.
Because when it changes the public acceptance of and eventual demand for prescription weight loss drugs will soar.
Obesity Takeaway #3
There are “110 million Americans eligible for an anti-obesity medication.”
“We can’t give them this fabulous, robust medication that is very effective and safe because insurance won’t cover it…you would never do that to a patient with hypertension, heart disease, or Type 2 diabetes.”
This one is about money.
So naturally, they featured Dr. Caroline Apovian, the co-director of the Weight Management and Wellness Center at Brigham and Women’s Hospital in boston.
She has literally taken cash from Novo Nordisk, the maker of two of the most prominent weight loss drugs according to data compiled by ProPublica.
She was promoting Victoza, a diabetes drug, that sells $2.2 billion in 2021.
In addition to the doctor, this last segment has two patients.
One who lost weight losing weight loss drugs and one who couldn’t access a weight loss drug because her insurance wouldn’t pay for it.
By having the two women appear together they were clearly trying to contrast the two and prove the benefits of the weight loss drugs.
It’s all part of a big campaign to make weight loss drugs accepted.
Whether it’s this program or the #ozempic social media campaign, it’s all working.
As a result, the big weight less drugs are going to be a huge market
The drugs are expensive and there could be millions of people eligible and willing to take them if they are covered by their insurance companies.
For example, Novo Nordisk’s Ozempic costs $1300 per month.
That’s more than $15,000 per year.
And many users will have to stay on it for life.
So it will only take a couple million of the “110 million eligible” Americans to make it a mega-blockbuster drug.
But it’s just one.
Novo Nordisk also has Wegovy, which is just like Ozempic, but comes in different doses.
Also, there’s Eli Lilly’s Mounjaro, which is in the same class of weight loss drugs and works in a similar way to thinking your body is full.
The Wall Street consensus expects Eli Lilly’s Mounjaro weight loss drug to reach $15 billion.
Morgan Stanley estimates the entire market could be worth $54 billion.
Spending Money To Save Money
The obesity treatment industry is about to go through its greatest revolution with the approval of new weight loss drugs.
With increasing acceptance, these drugs could easily be the best-selling drugs of all time.
You’re going to see a lot more push from these companies.
They will likely focus on how much money these drugs “save” the medical system.
And, in times like these, you’ve got to spend money to save money.
With that kind of argument, we can see how these drugs could be far more massive than most analysts are expecting.
So even though the analysts are expecting big things, their rosy forecasts may be a bit low.