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New study data indicates that the popularity of GLP-1 injectables from Eli Lilly and Novo Nordisk continues to be overshadowed by the effectiveness and sustainability of bariatric surgery results. Data shows that patients who undergo surgery could lose up to double the weight (on a percentage basis) of those relying on semaglutide and tirzepatide injections; the two active ingredients in Wegovy and Zepbound, respectively. Though surgical intervention is a daunting prospect for many, the long-term impact of treatment is what will matter most to insurance companies – the ultimate authority for many Americans in regard to what treatment options will be open to them. 

Both bariatric surgery and GLP-1 drugs carry steep price tags and a pre-authorization process is often required for policyholders to attain these special treatments. However, barriers could soon be lowered for patients to seek bariatric surgery, relative to the injectables. Though drugmakers are confident that tens of millions of obese Americans can still be reached through their insurance, cutting costs by easing supply chain bottlenecks may be one way that they can increase the footprint of their products further.

Related ETF & Stocks: VanEck Pharmaceutical ETF (PPH), Eli Lilly and Company (LLY), Novo Nordisk A/S (NVO), Intuitive Surgical, Inc. (ISRG)

The popularity of diabetes and weight loss therapies utilizing glucagon-like peptide 1 (GLP-1) receptor agonists have prompted forecasts for a total addressable market as high as $200 billion. Goldman Sachs has projected that Novo Nordisk and Eli Lilly will control a combined 80% share of market for anti-obesity drugs by the end of the decade. Those two companies have built on successful diabetes therapies in Ozempic and Mounjaro, rolling out Wegovy and Zepbound for weight loss. These products utilize semaglutide and tirzepatide as their active ingredient, respectively. While these two companies will try to consolidate their first-mover advantage, they will also need to find a way for their products to overcome competition from surgical procedures.

MRP first highlighted the impact of obesity drugs on the surgical business when companies like Intuitive Surgical, which uses robots to automate several surgical procedures, cited a drop-off in growth from US bariatric surgeries in July 2023. At the time, we noted that Though surgery is associated with fewer side effects, and remains a cheaper option than medicating with the leading weight loss drugs on the market today in many instances, softening demand for bariatric procedures could become more widespread and continuous if medications for obesity continue to grow in popularity.

However, new data in a preliminary study, recently presented at…

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