Drug companies’ “dependency” on glucagon-like peptide-1 (GLP-1) weight loss medicines is creating a “bubble effect” in the industry, new research has warned.
According to a report by Deloitte, published on May 4, obesity drugs have overtaken oncology drugs as the “largest contributor to the industry’s pipeline value for first time in 16 years”.
It said that while GLP-1s have helped to increase top pharma companies’ return on investment research and development (R&D) for the third year in a row, the industry’s “reliance on these medicines is creating a ‘bubble’ effect”.
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The report also found that weight loss drugs now make up 25% of total forecast sales, compared to just 1% in 2022.
But when GLP-1s are excluded from the analysis, R&D productivity sees a rate of return of just 2.9%, it added.
Exposed to risk
Deloitte Life Sciences partner Colin Terry said that “while the headline figures suggest a robust recovery in R&D productivity”, the analysis has “uncovered an industry-wide critical dependency on GLP-1 drugs that could create a ‘bubble’ effect”.
“This concentration of value into a few mega-blockbuster drugs, while exciting, exposes the industry to risk once launched,” he added.
Terry said pharma companies “must rethink their investment approach”, adding that there “also needs to be a bolder risk appetite for truly novel drugs, the kind that could be the next game-changing GLP-1, rather than just incremental improvements”.
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It comes after a new single-injection Wegovy pen containing the highest weekly dose of the weight loss drug was approved in the UK.
The Medicines and Healthcare products Regulatory Agency announced last month that it had authorised the jab, manufactured by Novo Nordisk, for adult patients with obesity and a Body Mass Index of 30 or higher.
