The Food and Drug Administration on Wednesday approved Eli Lilly’s diabetes drug for treating obesity, opening the door for widespread insurance coverage that could make the sought-after medication affordable for millions of patients.
The approval of Zepbound is sure to fuel demand for what is by some measures the most effective obesity drug yet to hit the market, the latest development in a stunning transformation of weight-loss treatments that are captivating a public eager to shed pounds and tantalizing Wall Street. The drug, made with the active ingredient tirzepatide, was previously approved as Mounjaro for use treating Type 2 diabetes; it is already widely prescribed off-label to combat obesity, although not all insurance companies pay for it.
“Obesity and overweight are serious conditions that can be associated with some of the leading causes of death such as heart disease, stroke and diabetes,” said John Sharretts, director of the FDA’s Division of Diabetes, Lipid Disorders and Obesity, in a statement. “In light of increasing rates of both obesity and overweight in the United States, today’s approval addresses an unmet medical need.”
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Leonard Glass, a senior vice president at Lilly, said in a statement that obesity “is often seen as a lifestyle choice” despite scientific evidence to the contrary. “Lilly is aiming to eliminate misperceptions about this disease and transform how it can be managed,” he said.
The approval, though widely expected, is a watershed moment for Lilly and a society grappling with the high costs of caring for patients with obesity. Zepbound will give patients another potent tool for losing weight, but it also forces employers and insurers to reckon with covering the costs of an expensive drug that patients may have to take long-term to keep the weight off.
Tirzepatide is part of a new generation of appetite-suppressing drugs that, despite sometimes unpleasant side effects, have become sensations among Hollywood celebrities — and people who have long struggled to lose weight and keep it off.
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The revolution in weight-loss treatment comes at a pivotal time for public health in the United States. More than 14 percent of adults in the United States suffer from diabetes and almost 42 percent have obesity, according to the Centers for Disease Control and Prevention. More Americans are dying earlier because of chronic ailments associated with weight, according to a Washington Post analysis.
Louis Aronne, director of the Center for Weight Management and Metabolic Clinical Research at Weill Cornell Medicine, said drugs such as tirzepatide will be crucial for treating obesity and improving wider health outcomes. “People will live longer lives,” Aronne said.
Tirzepatide is the second of a new generation of drugs approved to treat Type 2 diabetes and obesity. The FDA approved Novo Nordisk’s Ozempic for diabetes and Wegovy for obesity in 2017 and 2021, respectively, with both drugs using the active ingredient semaglutide. Lilly and Novo are studying how their novel molecules can treat a range of conditions, from alcohol addiction to cardiovascular disease.
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Lilly set a list price for Zepbound of about $1,060 for a month’s supply, slightly higher than Mounjaro’s $1,020 but roughly 20 percent less than Wegovy, its most direct competitor, which costs about $1,350 a month. Mike Mason, a Lilly executive vice president, said Wednesday that the company consulted employers and priced the drug lower to encourage companies to expand access.
Lilly also said it is rolling out a savings program that will allow certain patients with commercial insurance to pay as little as $25 for a one- or three-month prescription. People whose insurance doesn’t cover Zepbound could be eligible for a 50 percent discount off the list price.
Novo Nordisk said that about 80 percent of patients who take Wegovy and have commercial insurance pay $25 or less a month, and that those whose insurance doesn’t cover the drug can get $500 off its $1,350 list price for up to a year.
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As with Wegovy, FDA approval of Zepbound for obesity is likely to increase demand that the manufacturers have struggled to meet. Short supplies of Mounjaro dented its profits for the third quarter, despite bringing in about $1.3 billion in sales. FDA lists all strengths of Mounjaro as available, but the drug remains on a shortage list while the agency verifies Lilly has adequate stock.
Dave Ricks, Lilly’s chief executive, said Wednesday that the company expects to have Zepbound available to patients by the end of the year. “Are there scenarios where we don’t sustain that? Sure,” he said. “But we’re prepared for a big, bold launch.”
The shortages of tirzepatide and semaglutide have allowed specialized pharmacies to make copies of the patented products while they are in short supply. That, in turn, has fueled a new industry of clinics and telehealth providers selling the pharmacy-made versions for a fraction of the drugs’ list price, as well as websites peddling unregulated research-grade chemicals for weight-loss.
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Lilly earlier this year started production at a manufacturing plant in North Carolina, helping to increase its supply of auto-injectors used to administer Mounjaro.
“We continue to believe that supply will be a constraining factor of the Mounjaro/tirzepatide launch over the next several years,” Goldman Sachs analysts wrote in a research note last week.
Lilly shares rose more than 3 percent Wednesday and have increased more than 60 percent so far this year, giving it a stock-market value of nearly $590 billion — the largest of any U.S. drugmaker.
Tirzepatide is injected once a week and communicates with receptors in areas of the brain that help regulate appetite, dialing up two naturally produced hormones in the gut and triggering a sensation of fullness. This effect — similar to that of semaglutide — has helped many patients lose weight to an unprecedented degree.
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Mounjaro was first approved by the FDA in 2022 to help control blood sugar. Approval of the drug for weight loss was spurred by results of key clinical trials released earlier this year, including one that showed tirzepatide helped overweight or obese participants shed a least a quarter of their body weight, when combined with a low-calorie diet, exercise and weekly counseling.
Diana Thiara, medical director of the University of California at San Francisco Weight Management Program, likened the drug’s effects to those seen in gastric sleeve surgeries. “The high rates of weight loss are really powerful,” Thiara said of tirzepatide.
She cautioned that the drug, while groundbreaking for obesity treatment, should not be used solely to promote short-term extreme weight loss to the exclusion of healthy eating habits. “It should be used to calm down that hunger noise, and to focus on nutrition and lifestyle things like exercise,” Thiara said.
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Amid the frenzy for the drugs, accessing the shots has been challenging for the public — because of the stubborn shortages and high prices for patients without insurance, and because some insurers don’t cover weight-loss medication.
Weight-loss drugs are still often viewed as cosmetic, rather than vital long-term treatments like medication prescribed for hypertension, doctors say. Federal law bars Medicare from covering weight-loss drugs, excluding a large swath of possible patients.
Novo Nordisk said last week that most major pharmacy-benefit managers and health plans cover Wegovy for obesity, giving about 50 million people access to the drug through insurance.
While many doctors already prescribe Mounjaro off-label to treat obesity, more will now feel more comfortable doing so, said Aronne, of Weill Cornell Medicine, who consults with drug companies.
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“It will absolutely broaden access,” Aronne said of FDA’s decision.
It remains to be seen how Lilly’s Zepbound will compete with Novo’s Wegovy and its higher list price. When the list price of a drug is higher, manufacturers can offer a bigger rebate that is attractive to purchasers of the medicine like pharmacy-benefit managers.
By pricing Zepbound significantly less than Wegovy, Lilly won’t be able to offer the same level of rebate to drug purchasers. Instead, Lilly is betting on winning over more employers.
That could be key to the obesity market, where employers opt in to cover the condition, David Risinger, an analyst at investment firm Leerink Partners, wrote in a research note Wednesday. Lilly, he wrote, “wants to be able to drive access in the obesity market.”
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