Digital health companies are cashing in on the GLP-1 boom

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She pays $30 per month for the GLP-1 treatment, after insurance coverage, along with a $145 monthly fee for the program.
In addition to Wegovy and Ozempic, the GLP-1 class includes Eli Lilly’s highly popular weight loss drug Zepbound and diabetes treatment Mounjaro.
Now, Ro is shoveling marketing dollars into its GLP-1 program — from digital ads, TV commercials and posters lining subway stations, to influencer campaigns featuring patients such as Beard.
With respect to GLP-1s and their impact on weight loss, “the landscape is quite exciting,” Foster said.
VanGilder signed up nearly four years ago and started taking the weekly diabetes injection Ozempic specifically for weight loss.
The big difference between Calibrate and prior weight loss efforts, VanGilder said, is that she doesn’t feel like she’s dieting.
Calibrate is one of the only companies to regularly release reports detailing the results of its weight loss program.
The federal Medicare program by law can’t cover weight loss drugs unless the prescription is for another approved health benefit, such as diabetes or cardiovascular health.

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Michael Siluk | Getty Images | UCG.

Gray Beard, a kindergarten teacher in Charlotte, North Carolina, found it difficult to shed pounds. She had never seen long-lasting results from any of the five programs she had tried in her life.

Beard, 47, had previously asked for a prescription for GLP-1, but her doctor “wouldn’t even try” to get it approved, figuring her insurance company wouldn’t pay for the pricey drug, she claimed. Before insurance and other rebates, the monthly cost of a GLP-1 is approximately $1,000.

Clients of Ro’s Body Program may be prescribed a GLP-1, such as the diabetes medication Ozempic or the weight-loss medication Wegovy by Novo Nordisk, and scheduled monthly visits with a physician. In addition, they receive a curriculum for education, round-the-clock messaging, one-on-one coaching with nurses, and help with the intricacies of insurance.

When Beard joined the program in early January of last year, her weight was 210 pounds. Since then, she has shed forty pounds and acts as a spokesperson for Ro. She pays a $145 monthly program fee in addition to $30 monthly for the GLP-1 treatment, after insurance coverage. She also doesn’t intend to leave.

Beard told CNBC that he wouldn’t mind being on it indefinitely.

As one of the many digital health startups hoping to profit from the skyrocketing demand for GLP-1s, Ro was initially founded as Roman in 2017. The company offers users programs and services in addition to the medication. It might be a huge opportunity. An analyst at Goldman Sachs projects 15 million U.S. S. The industry is expected to generate $100 billion in revenue annually by 2030, with adults expected to be taking anti-obesity medications.

Apart from Wegovy and Ozempic, other drugs in the GLP-1 class include Zepbound, a popular weight-loss medication from Eli Lilly, and Mounjaro, a diabetes treatment. GLP-1s are similar to a hormone that the gut produces to control blood sugar levels and suppress appetite.

Similar to Ro, a number of non-pharmaceutical companies have launched products targeted at GLP-1 patients or expanded their services to include the well-known drugs. These companies include Calibrate, Sesame, Omada Health, Noom, Hims and Hers, and even telehealth industry veterans Teladoc Health and WeightWatchers.

Investors are urging them on in the meantime.

As the company announced on May 20 that it is now providing compounded GLP-1 injections in addition to its oral medication kits, shares of Ro competitor Hims & Hers surged by 28%. Executive Chairman Andrew Dudum told CNBC that the business is optimistic that patients will have steady access to the injections.

One of the major challenges facing businesses in the market is a shortage of supplies because rising demand has made it harder for many patients to get the treatments they need. Additionally, the World Health Organization reports that the number of counterfeit goods has increased. The organization stated in January that patients with Type 2 diabetes who depend on the medication for disease management may find it especially problematic when shortages and the “increased circulation of falsified versions” arise.

Zachariah Reitano, the founder of Ro, and other industry executives are not deterred by this.

Ro was not initially a company that catered to dieters. Before focusing on hair loss and other disorders, Reitano first started selling erectile dysfunction treatments online.

Following the FDA’s approval of Wegovy in 2020, Ro shifted his focus to managing obesity. According to Reitano, patient inquiries began to come in by the “tens of thousands” the following year. ****.

Ro is now heavily investing in its GLP-1 program through influencer campaigns that highlight patients like Beard as well as digital and TV commercials, posters, and posters lining subway stations.

Like a “jetpack for positive behavior change,” Reitano described GLP-1s to CNBC. According to him, patients typically see a 30% decrease in caloric intake, increase their exercise, and eat healthier.

“There’s a positive flywheel once you get a little momentum and lose a little weight because you’re sleeping better, have more energy, can work out, and can eat better,” Reitano explained.

According to PitchBook, Ro has so far raised about $1 billion in funding. About $7 billion was the company’s valuation in early 2022, but that was before the market for initial public offerings crashed and tech stocks took a significant tumble, forcing many startups to drastically reduce their valuations.

The launch of WeightWatchers.

The brand in the United States, WeightWatchers has been around for more than 60 years. s. Most likely most closely associated with diet plans.

WeightWatchers discovered very quickly, according to chief scientific officer Gary Foster, that patients taking GLP-1s required a completely different program because the medications suppress appetite.

In an interview, Foster stated, “They don’t need help with what to do for dessert or how to deal with the bread on the table at a restaurant.”. That’s roughly fifty to sixty percent of what we would do for patients who weren’t taking medication. “.”.

Clinic members who take part in the GLP-1 program must pay an extra cost, which starts at $99 per month, in order to have exclusive access to care team coordinators, registered dieticians, and fitness specialists.

Not all of the 87,000 members of WeightWatchers’ clinic are taking GLP-1s, but the company did report in its first-quarter results earlier this month that they were. By year’s end, the company anticipates having 140,000–160,000 clinic subscribers, according to the report.

It has not been sufficient to alter the course of WeightWatchers. Due to worries about the company’s debt load, its primary weight loss business, and Oprah Winfrey’s announced departure from the board in February, the stock has crashed 83 percent this year.

Foster remarked, “The landscape is quite exciting” with regard to GLP-1s and their effect on weight loss. “I believe that the fact that there are more resources available to assist individuals in managing their weight is something to rejoice about and should truly cheer us all on. “.”.

Lee Smith | Reuters.

Professor of economics Jennifer VanGilder, 51, of Collegeville, Pennsylvania’s Ursinus College, claimed to have tried a wide range of weight-loss strategies, including rigid diets and programs like the now-defunct Jenny Craig. Before learning about a program offered by digital health startup Calibrate, she was thinking about having bariatric surgery.

One of the first businesses to treat obesity with a combination of GLP-1s and one-on-one coaching was Calibrate, which was founded in 2019. The program has a one-time three-month commitment and costs $199 per month, not including the medication.

For the express purpose of losing weight, VanGilder enrolled nearly four years ago and began receiving the weekly Ozempic diabetes injection. Afterwards, she moved to Wegovy.

Despite not being a miracle medication, VanGilder claimed that she lost about 100 pounds of her original 242 pounds by taking GLP-1s and working hard. Calibrate feels nothing like a diet, which is a major distinction between it and previous weight loss attempts, according to VanGilder.

VanGilder stated, “That’s why I’ve been able to stay on it for as long as I have.”.

Reliability in presenting weight loss program outcomes is a unique quality that sets Calibrate apart from other companies. About 16,000 members who had completed the program for at least a year as of October and a smaller group of patients who had stayed on longer were included in the company’s 2024 report.

Based on the program, patients lost an average of 16.2%, 17.3%, and 17.9% of their body weight at 12 months, 18 months, and 24 months, respectively.

Vice President of Clinical Development at Calibrate, Dr. Kristin Baier, stated in an interview that “our data of proven outcomes shows that we can deliver faster, better results than some of the leading GLP-1 clinical trials.”.

However, over the last few years, Calibrate has encountered some significant roadblocks.

The startup had to fire hundreds of workers between 2022 and 2023 due to a combination of supply constraints, insurance issues, and the general market downturn, following its $100 million venture financing round during the tech market’s zenith in 2021. Madryn Asset Management, a private equity firm, purchased the company in October at a discount.

The industry was “ill equipped,” according to Calibrate CEO Rob MacNaughton, to handle the “dramatic demand that led to, at some point, severely, severely constrained supply” of GLP-1s last year.

The business is still pushing its GLP-1 service, which it claims is crucial because the medications alone are insufficient, even with the new ownership.

“GLP-1 medications are a tool, even though they are safe and effective,” stated Baier. They do not represent the full course of care. “.

options for medical individuals.

Reitano stated that Ro has established “both technical tools and operations” to assist patients in resolving supply-related concerns. Prescriptions may be transferred to various pharmacies in accordance with their GLP-1 supply and patient’s proximity. The company called 50,000 pharmacies nationwide in July and August. s. Reitano stated that in order to arrange those transfers.

In addition, Ro has added Zepbound to its list of medications after its U. s. consent in November.

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However, issues with insurance still exist.

Because it is expensive to cover thousands of patients’ treatments, some employers have removed weight loss drugs from their plans. By law, weight reduction medications cannot be paid for by the federal Medicare program unless the prescription is for a condition for which the drug is approved, like diabetes or cardiovascular health.

Commercial savings card initiatives are provided by Eli Lilly and Novo Nordisk with the goal of increasing GLP-1 accessibility. Eli Lilly gives Zepbound prescriptions to those whose insurance covers them for as little as $25 a month. Users who do not qualify for insurance coverage might be able to obtain the medication for as little as $550 per month.

Even though Hims & Hers introduced a new weight loss program in December, they initially refrained from entering the GLP-1 market due to the high costs and challenging access.

Dr. Senior vice president of Hims’ weight management division Craig Primack said the company chose to provide treatment plans based on medications that had been researched and recommended for many years.

According to Primack, in a March interview with CNBC, “there will be people who, for one reason or another, don’t want an injection at this point, or are just looking for a different alternative.”. We have been working in our field with these tools for a very long time. “.

Hims announced last week that users of the platform can now obtain compounded GLP-1 drugs with a prescription from a certified healthcare professional. Hims stated that once supplies are reliably available, it intends to offer its clients access to branded GLP-1 drugs. For $79 a month, the company offers oral medication kits, and for $199 a month, it offers compounded GLP-1 injections.

According to Dudum, the company has a partnership with one of the biggest generic manufacturers in the United States. s. with the facility, and enjoys some degree of exclusivity. According to him, the FDA is in charge of the manufacturer.

Prior to adding compounded GLP-1 injections to its weight loss portfolio, Hims stated that it anticipates surpassing $100 million in revenue from the program by the end of 2025.

Beard, the Ro client, has had to adjust a few things since beginning the Body Program. Because of her insurance and a Novo Nordisk savings card program, she was able to initiate Wegovy without incurring any out-of-pocket expenses. However, the medication caused her to plateau, so she moved to Zepbound.

Beard claims that, despite a few bumps along the road, the program has generally been a “seamless” addition to her daily life and that she no longer obsesses over food. She succeeded in enrolling a family member as well.

“Why stop taking it when there aren’t any negative side effects?” she asked, adding that it had assisted them both in reaching their desired weight. “.

Novo can “coexist for awhile” with Eli Lilly, as you can see.

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