Costco Weight-Loss Drugs Move Highlights US AOM Growth

Costco move to partner with online healthcare provider Sesame to provide members with weight-loss drugs including Wegovy signals US anti-obesity boom

News that Costco Wholesale is offering members access to weight-loss programs – including the prescription drugs Ozempic and Wegovy – serves only to reinforce just how big the anti-obesity medication (AOM) market is becoming in the US.

Costco is making the drugs available through a partnership with an existing partnership with online healthcare services provider, Sesame. The company’s members can now subscribe to Sesame's weight-loss program for $179 for three months, compared with $195 for non-members.

Costco has an estimated 130 million members, and the company first partnered with Costco last September, when it announced it was offering outpatient medical care to its members.

Costco’s AOM move is yet further confirmation at just how colossal the US weight-loss medications market is. In 2023, the country saw physicians write an estimated 8.2 million prescriptions for AOMs – quadruple the number in 2021. 

Last year, the AOMs Ozempic, Rybelsus and Wegovy saw combined global sales of US$21bn for Novo Nordisk, the Danish company that produces them– almost two-thirds of its entire revenue. A massive 71% of the company’s weight-loss revenues came from the US.

Mounjaro, a similar diabetes drug produced by Eli Lilly (with the active ingredient tirzepatide) was launched in mid-2022, and by the end of the same year had seen sales of US$482mn. In its first full year on the market, Mounjaro brought in nearly $5.2 billion. Again, the US accounts for a sizable chunk of those sales. 

Demand for so-called ‘GLP-1 agonists’ – a class of highly effective diabetes and obesity drugs – has surged in the past few years.

The rise of AOMs has been meteoric. Until relatively recently the only weight-loss medical intervention deemed to be effective was bariatric surgery, whereby a surgeon reduces stomach size to reduce feelings of hunger. But such operations are expensive, complicated and carry risk.

Obesity driving booming US weight-loss drugs market 

One obvious driving factor is the sheer scale of the US’s obesity problem; almost 115 million of its adults and children are obese.

US employers – who in the past have offered coverage for bariatric surgery – now are meeting demand for drugs like Wegovy.

The result is that surging demand is now causing shortages of AOMs; manufacturers simply cannot make them quickly enough.

The phenomenon is such that it is reshaping the US economy. The weight-loss boom is driving down the price of beer, snacks and groceries, while boosting fashion brands – as slimmed-down consumers look to refresh their wardrobes.

But many predict the boom is unsustainable. Research shows that 68% of those who take AOMs cannot tolerate them for more than a year, mainly because of severe side-effects, including nausea and other gastrointestinal symptoms. Others stop because their weight loss has plateaued.  

When people come off AOMs many go on to regain weight after stopping treatment, because they do not make the lifestyle adjustments needed for sustained weight loss.

Many health experts believe that the proliferation of AOMs is an ‘overmedicalisation’ of a condition that needs to be addressed societally, by tackling the lack of nutritious foods, and by promoting physical activity through better urban planning.

Meanwhile, drug regulators, in both the US and Europe, are keeping a close eye on side-effects linked to the drugs, including heart problems, and whether they will need to take regulatory action.

But in the meantime, expect the AOM manufacturers to continue enjoying buoyant sales.

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