By Frank F. Dolan, CEO, Arsenal Advisors
- Lilly’s tirzepatide franchise generated $36.5 billion in 2025. Novo’s semaglutide franchise generated approximately $33 billion. The global obesity drug market is projected to reach $100–105 billion by 2030 — and 42% of privately insured US adults under 65 are potentially eligible under current FDA indications
- Only 19% of employers with 200+ workers cover GLP-1s for weight loss. Restrictions affect over 88% of people seeking these drugs. The bottleneck has shifted entirely from supply to access, affordability, persistence, and channel control
- GLP-1 persistence is the industry’s most important unsolved commercial problem: one large cohort study found only 24.5% of patients remained on therapy at 12 months — though plan design and support infrastructure can move that number dramatically
- GLP-1s are not a category anomaly. They are a prototype for every high-demand, patient-activated, access-constrained therapy that is coming next — and the commercial model lessons they are teaching will define pharmaceutical commercial strategy for the next decade
The Category That Changed Everything — Including the Commercial Model
Two numbers establish the commercial scale of what has happened in the GLP-1 market. Lilly’s tirzepatide franchise — Mounjaro and Zepbound combined — generated $36.5 billion in 2025. Novo Nordisk’s semaglutide franchise — Ozempic and Wegovy — generated approximately $33 billion. Together, two drugs from two companies have created roughly $70 billion in annual revenue in a category that barely existed at commercial scale five years ago.
The demand side of this story is now well understood. KFF found that 1 in 8 US adults — 12% of the population — reported currently taking a GLP-1 drug as of November 2025. IQVIA tracked commercial market GLP-1 prescription volume growing from 680,000 in January 2020 to 4.7 million in May 2025. KFF’s Health System Tracker estimates that 42% of privately insured adults under 65 could be eligible for GLP-1 therapy under current FDA indications.
The gap between 42% eligibility and 12% current use is not a demand problem. Patients want these drugs. Physicians are writing prescriptions. The gap is the commercial infrastructure problem — and understanding it is the most important commercial model lesson the GLP-1 era is teaching the pharmaceutical industry.
Analysts initially projected the global obesity drug market at $150 billion or more by 2030. Current consensus has moderated to approximately $100–105 billion. The revision is not because the drugs work less well or patients want them less. It is because the commercial infrastructure required to convert eligible patients into persistent, reimbursed, brand-adherent therapy users is harder to build than anyone’s initial model assumed.
The Manufacturing Constraint Era Is Over. The Access Constraint Era Has Begun.
The first chapter of the GLP-1 commercial story was defined by supply. Novo Nordisk and Eli Lilly could not make enough drug to meet demand. The shortage designation created an opening for compounding pharmacies — which filled it aggressively.
That chapter is closed. FDA resolved the tirzepatide shortage on October 2, 2024. The semaglutide shortage was resolved on February 21, 2025. By April 2025, Novo told Reuters that all doses of Wegovy were available. Manufacturing is no longer the constraint.
The new constraint is access — and it is more structurally complex than supply.
KFF’s 2025 Employer Health Benefits Survey found that among employers with 200 or more workers, only 19% covered GLP-1 drugs when used primarily for weight loss. Coverage was 16% among firms with 200–999 workers, 30% among firms with 1,000–4,999 workers, and 43% among firms with 5,000 or more workers. Among large employers that do not currently cover GLP-1s for obesity, only 1% said they were very likely to add coverage in the next 12 months. Sixty-seven percent said they were not likely to do so.
GoodRx’s 2025 coverage analysis found that restrictions affect over 88% of people seeking GLP-1 and GIP-GLP-1 drugs for weight loss. An AMCP analysis found that fewer than half of commercial members — 43% — currently had coverage for anti-obesity medications.
Prior authorization is the operational manifestation of that coverage reality. A 2025 analysis of semaglutide and tirzepatide coverage in Medicare Part D found prior authorization rates of approximately 83% by Q3 2024 for injectable semaglutide, tirzepatide, and oral semaglutide among plans that cover these therapies. Getting a prescription written is straightforward. Getting it filled — and paid for — remains a significant operational challenge for millions of eligible patients.
The cardiovascular label expansion has created meaningful access movement. After FDA approved Wegovy in March 2024 for cardiovascular risk reduction in patients with obesity or overweight, CMS allowed Medicare Part D plans to cover Wegovy for that indication. MMIT subsequently reported Wegovy covered for 54% of members across all channels by July 2024, with payers representing 62% of commercial lives indicating they were more likely to cover Wegovy for Medicare lines after the CV indication approval.
But even that progress illustrates the challenge: a major cardiovascular outcomes trial and an FDA label expansion were required to move coverage from a minority to a majority of members for a drug that patients and physicians have been asking for since launch. That is an access engineering achievement, not a market access success story.
The Compounding Chapter: What Happens When the Channel Goes Around You
The compounding pharmacy story is the most commercially instructive episode in the GLP-1 era — and the one that most pharma commercial organizations have not fully processed.
When FDA designated semaglutide and tirzepatide as shortage drugs, compounding pharmacies gained legal authority to produce copies. They did so at scale and at dramatically lower prices. By January 2026, Novo’s CEO estimated that approximately 1.5 million US users were taking compounded GLP-1 drugs. A parallel ecosystem of telehealth platforms — Hims & Hers, Ro, Noom, WeightWatchers-affiliated services — built significant prescription volumes through these compounded products, often at prices that made branded drugs inaccessible by comparison.
FDA resolved the shortage designations and took increasingly aggressive enforcement action. A federal judge upheld FDA’s removal of Ozempic and Wegovy from the shortage list in June 2025. By February and March 2026, FDA announced restrictions on GLP-1 APIs intended for mass-marketed compounded drugs and sent warning letters to 30 telehealth companies over misleading marketing of compounded products. Hims attempted to launch a $49 compounded oral semaglutide pill, quickly withdrew under FDA pressure and Novo’s threatened legal action.
The commercial lesson is not about compounding pharmacies specifically. It is about what happens when a branded manufacturer cannot close the gap between what patients are willing to pay and what the brand costs through traditional channels. An alternative ecosystem fills that gap — and once it fills it, patient habits, prescriber workflows, and channel economics all shift in ways that are difficult to reverse.
Lilly’s response to this dynamic was LillyDirect. In Q2 2025, approximately 35% of new Zepbound prescriptions were fulfilled through LillyDirect’s self-pay option. Lilly subsequently expanded the model with Walmart retail pickup, creating a direct consumer channel that controls the patient relationship, the pricing, and the access pathway simultaneously.
Novo’s response was different in design but similar in intent. NovoCare Pharmacy launched with a $499 monthly cash price for Wegovy in March 2025, reduced to $349 per month by November 2025. Oral Wegovy launched in January 2026 with starter self-pay pricing beginning at $149 per month. Novo also partnered with Hims & Hers, Ro, and LifeMD to distribute branded Wegovy through telehealth channels — effectively bringing the channel inside the brand rather than fighting it from outside.
Both strategies represent the same commercial recognition: in a high-demand category with significant access friction, the manufacturer that controls the direct patient relationship captures volume that the traditional channel cannot reliably deliver.
The IRA Timeline: A Critical Correction to Standard Assumptions
A significant and frequently misunderstood aspect of the GLP-1 commercial landscape is how the Inflation Reduction Act applies to semaglutide and tirzepatide.
Semaglutide is not classified under the IRA’s biologic timeline — the 11-year eligibility clock that applies to large-molecule drugs. It is being treated as a small molecule, subject to the 7-year small molecule negotiation clock. KFF confirms that Ozempic and Wegovy were selected in the second round of Medicare drug negotiation, with negotiated prices taking effect in 2027. This is not a future policy risk. It is a current commercial reality for Novo Nordisk’s Medicare revenue.
The competitive pressure story is similarly different from what most commercial analyses assume. The future threat to branded GLP-1s is not conventional US biosimilar substitution in the way that biologics like adalimumab have faced it. It is lower-cost follow-on competition — generic and unbranded peptide market entrants — particularly in markets outside the US where patent protection timelines differ. Reuters has reported that more than 40 Indian drugmakers are preparing over 50 semaglutide brands following patent expiry in India. Sandoz and others have discussed Canadian market entry with unbranded semaglutide.
Both Novo and Lilly are already executing lifecycle management strategies against this pressure. Novo has pushed oral semaglutide aggressively — oral Wegovy launched in the US in January 2026 — and has highlighted label expansions into metabolic-associated steatohepatitis and chronic kidney disease as growth vectors. Lilly is advancing oral orforglipron and next-generation obesity assets including retatrutide. Both companies are building commercial platforms, not single-product franchises — which is itself a commercial model lesson for organizations watching from adjacent categories.
The Persistence Problem: The Commercial Challenge Nobody Solved at Launch
The most important unsolved commercial problem in the GLP-1 category is persistence. Patient demand is extraordinary. Prescription volume is growing. The drugs work. And patients are stopping them at rates that no mass-market therapeutic category would accept as normal.
A 2026 JAMA Network Open study of adults with overweight or obesity without diabetes found overall 12-month persistence of only 24.5% across a large commercially insured cohort. Fewer than one in four patients remained on any GLP-1 after a year of therapy.
That number tells half the story. A 2025 Prime Therapeutics analysis reported that 63% of commercial plan patients who started Wegovy or Zepbound in early 2024 remained on therapy after a year. The gap between 24.5% and 63% is not a contradiction. It is a demonstration of how dramatically plan design, benefit structure, supply stability, affordability support, and patient engagement infrastructure affect whether patients stay on therapy.
Discontinuation in the GLP-1 category is driven by a specific set of commercial failures: patients who cannot afford ongoing refills once manufacturer coupons expire, patients who transitioned from telehealth prescriptions to ongoing primary care management without adequate support, patients who experienced side effects in the early weeks without a support mechanism to navigate them, and patients whose insurance coverage lapsed or whose prior authorization expired without renewal support.
Every one of those discontinuation drivers is a commercial infrastructure failure, not a patient motivation failure. The patients want to stay on therapy. The system fails to support them in doing so.
The organizations building persistence solutions are treating them as core commercial infrastructure — not patient services add-ons. Integrated affordability programs, automated prior authorization renewal workflows, telehealth-enabled ongoing management, and proactive outreach at the clinical milestones where discontinuation risk peaks are all being deployed by the commercial teams generating 63% persistence. The teams generating 24.5% are not.
What GLP-1 Commercialization Is Teaching the Rest of Pharma
The second-order effects of GLP-1 commercial scale are already spreading beyond obesity. EY-Parthenon estimates that GLP-1-related dietary changes could reduce snack food sales by up to $12 billion over the next decade. WeightWatchers filed for bankruptcy in 2025 as consumers shifted toward GLP-1s and compounded alternatives. Bariatric surgery programs are restructuring their patient populations. Cardiovascular drug manufacturers are modeling revised addressable markets as GLP-1 outcomes data matures.
This is the signal that most pharma commercial organizations are still treating as someone else’s problem. GLP-1 drugs are not a category story. They are a preview of the commercial environment that will define pharmaceutical commercialization for the next decade.
The common features of the future commercial landscape are visible in GLP-1 today: massive eligible patient populations separated from therapy by access and affordability barriers, not by awareness or prescriber resistance. Payer systems that create friction as a cost-management tool rather than as a clinical filter. Patients who are activated, informed, and willing to bypass traditional channels if the traditional channel cannot serve them. Manufacturer-to-patient direct channels that are no longer experimental. And a competitive landscape where follow-on competition arrives faster and at lower price points than any previous generation of blockbuster drugs experienced.
After 25 years of observing pharmaceutical commercial model evolution, the GLP-1 era is the clearest real-world demonstration I have seen of what happens when patient demand outpaces a commercial model built for a different era. The organizations applying the lessons — building access engineering, channel control, affordability infrastructure, persistence support, and lifecycle management as one integrated commercial system — are not just winning in obesity. They are building the commercial operating model for the next generation of high-demand chronic therapies.
The organizations still treating GLP-1 as a category-specific anomaly will discover that the next category with these dynamics is already in their pipeline. The question is whether they will have built the commercial model to handle it before it arrives or after it has already exposed the gap.
References:
- Eli Lilly — 2025 Full Year Earnings — investor.lilly.com
- Novo Nordisk — 2025 Full Year Financial Results — novonordisk.com
- KFF — “Use of GLP-1 Drugs” (November 2025) — kff.org
- KFF — Health System Tracker — GLP-1 eligibility analysis — healthsystemtracker.org
- IQVIA — GLP-1 Prescription Volume Tracking (May 2025) — iqvia.com
- KFF — 2025 Employer Health Benefits Survey — kff.org
- GoodRx — 2025 GLP-1 Coverage Analysis — goodrx.com
- MMIT — Wegovy Coverage Analysis Post-CV Label (July 2024) — mmitnetwork.com
- FDA — Tirzepatide Shortage Resolution (October 2, 2024); Semaglutide Shortage Resolution (February 21, 2025) — fda.gov
- Reuters — “Novo Says All Doses of Wegovy Available” (April 2025) — reuters.com
- Reuters — “Prices for New US Drugs Doubled in 4 Years” (May 2025) — reuters.com
- KFF — IRA Negotiation Program: Second Cycle Drug Selection — kff.org
- JAMA Network Open — GLP-1 12-Month Persistence Study (2026) — jamanetwork.com
- Prime Therapeutics — GLP-1 Persistence Analysis (2025) — primetherapeutics.com
- FiercePharma — GLP-1 Market Coverage (2025–2026) — fiercepharma.com
- Reuters — Indian Manufacturers Preparing Semaglutide Brands — reuters.com
- EY-Parthenon — GLP-1 Consumer Behavior Impact Analysis — ey.com
