Predictions for the size of the market for prescription weight loss drugs keep growing.
New research from Goldman Sachs projects 15 million adults in the US will be on anti-obesity medications by 2030, representing 13% penetration in the US adult population — not including diabetic patients.
Globally, Goldman Sachs sees sales for chronic weight management reaching $100 billion by 2030, up from a $6 billion annualized estimate earlier this year.
"The chronic weight management market is undergoing an inflection, in our view, with potential for solid growth ahead and a peak opportunity that, by our estimates, could ultimately yield some of the highest grossing drugs of all time," a team of Goldman Sachs analysts led by Chris Shibutani wrote in a research note on Monday.
Recent buzz about the impact of the weight loss drugs has caught the attention of Wall Street. Several analysts have questioned whether drugs like Ozempic could hamper demand for fast food and food sales at retailers like Walmart (WMT), which has said the drug was leading to lower revenue.
The excitement has driven stock gains for prescription drugs producers Novo Nordisk (NVO) and Eli Lily (LLY). Last week, Novo Nordisk raised its full-year sales guidance on a better-than-expected sales outlook from its diabetes drug, Ozempic. The drug isn't approved directly for weight loss, but it's still become a popular use for the drug. Meanwhile during its most recent quarterly earnings report in August, Eli Lily raised its own sales guidance on increased demand for its Type 2 diabetes management drug, Mounjaro.
Part of Goldman Sachs's prediction of a $100 billion weight loss drug market reflects the growing number of obese people worldwide. Goldman Sachs cites World Health Organization data noting that obesity has nearly tripled worldwide since 1975. They also highlight the World Obesity Atlas, which expects over half of the global population will be overweight or obese by 2035.
One of the key headwinds to wider adoption will be government approval. Novo Nordisk's Wegovy has been approved specifically for weight loss, but Eli Lily's drug is still in the process. Goldman estimates that Eli Lily's Tirzepatide product, which is still awaiting approval, will account for more than one-third of the prescription weight loss market by 2030.
Additionally, insurance coverage and how long patients will use the drug still remain up in the air.
Goldman projects 90% of employers will provide insurance coverage for anti-obesity medications by 2030, while the trajectory for how long patients take the drug remains a "key unknown." Some studies, like one from UCHealth, have shown patients will take the drugs indefinitely. But Goldman wasn't that extreme.
"We believe a reasonable assumption at this juncture is to assume a duration of 12 months on average, recognizing that introduction of orals and novel mechanisms will likely influence how long patients remain on AOMs," Goldman's team of analysts wrote.
The market could get even bigger, too.
"Meaningful uptake in pediatric-age ... individuals would represent upside to our estimates," Goldman Sachs said.
Josh Schafer is a reporter for Yahoo Finance.
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