Two experts see major challenges in introducing new obesity medications.
Dr. Kavita Patel, a physician and NBC News medical contributor, believes new data from Novo Nordisk on Ozempic’s ability to slow the progression of chronic kidney disease is among the strongest evidence for secondary uses of the drug.
However, she believes data supporting the use of obesity drugs in other diseases such as Alzheimer’s and alcohol addiction are underdeveloped.
“These studies…are nowhere near as robust as the data we have.” [Novo Nordisk trial] “FLOW, on sleep apnea, on cardiovascular risks, on diabetes control – double-blind placebo, randomized controlled trials that are incredible,” she told CNBC’s “Fast Money” on Wednesday. “We still have a long way to go.” I have already seen many miracle cures.
Novo Nordisk stopped FLOW on Tuesday. According to the company’s press release, this came more than a year after an interim analysis showed that Ozempic could treat chronic kidney disease in type 2 diabetics.
As of Friday’s close, Novo Nordisk was up 9.82% since his Notice. Its competitor Eli Lilly, maker of obesity drugs, rose 5.16% over the same period.
Patel believes that efficacy is just one of the biggest hurdles the drug must overcome before it can be approved for uses outside of diabetes treatment.
“We know that this drug works really well for diabetics. But there are so many obstacles in the way — including cost, adherence, prescription rates,” said Patel, who also served as White House health policy director under President Obama.
Patients who choose to use GLP-1 drugs — a group of drugs originally developed to control diabetes — for weight control often have to pay out of pocket.
“Right now we’re seeing active employers, entire states, refusing to cover the weight loss indication,” Patel said.
If the U.S. Food and Drug Administration approves Ozempic for use in Type 2 diabetics with chronic kidney disease, as Patel expects it will, it could force insurance companies to expand their coverage of the drug.
“We will see a final data package that will be so compelling that it would be wrong not to address it, because it should be better than what is available to us,” she noted. “That’s something I think insurance companies will have a hard time covering.” [with].”
Jared Holz, healthcare sector strategist at Mizuho, also expects challenges related to insurance coverage as more patients begin taking GLP-1 drugs, which could limit overall adoption.
“At some point, payers will say, ‘We understand it, but we can’t pay this amount at this level without seeing the benefit that may be 10 years from now, 20 years from now, 30 years from now.’ “We have no idea when the offset will be,” He also told CNBC’s “Fast Money.”
Holz also pointed to the divide emerging in the healthcare sector between Novo Nordisk, Eli Lilly and their pharmaceutical counterparts.
“We have perhaps never seen such a valuation discrepancy between the peer group in the history of the sector,” he said.
The growth trend may not be sustainable for Novo Nordisk and Eli Lilly as current supply shortages mean patients are unable to receive doses.
“I don’t think the companies can make enough to actually produce revenue that would satisfy investors, given where the stocks are trading,” Holz said.
A spokesman for Novo Nordisk had no comment due to the company’s quiet period before the results were released. Eli Lilly did not immediately respond to a request for comment.