The effectiveness of GLP-1 agonists -- e.g., semaglutide (Wegovy) -- in reducing weight has caught nationwide attention, causing among celebrities and the wealthy to get their hands on the drug. It has also prompted startups to launch new "weight-loss" programs.
Startups like and boast 15% weight loss on average when you join their programs, which blend together coaching and treatment with the GLP-1 agonist semaglutide. The FDA approved semaglutide in 2021 to treat patients with overweight or obesity with at least one weight-related condition, which includes up to 42% of Americans.
Semaglutide is remarkably effective. In clinical trials, participants in the semaglutide group experienced a 15% decrease in body weight, on average, compared to a 2.4% decrease in the placebo group. Weight loss wasn't the only significant finding for the semaglutide group: other cardiometabolic indicators, such as cholesterol, also improved.
Several other effective , like tirzepatide (marketed as Mounjaro for type 2 diabetes), are in the pipeline, all of which have catalyzed the launch of new weight-loss programs by startups. But the future of these programs may be short-lived.
Here's what I predict will happen to startups offering new weight-loss programs with anti-obesity medication.
Established virtual care startups will start launching new weight-loss services, and new virtual care startups will follow suit. These startups' business models will likely be direct-to-consumer, meaning they'll target you, me, and our patients through social media advertisements, drawing us to their website. We'll insert our health data (weight, height, medical history) to see if we qualify for their weight loss program, through which we can gain access to semaglutide.
The onboarding process for these startups' weight loss programs will be remarkably frictionless. On certain startups' websites, you'll see some already have a dedicated team to work with insurance companies to cover medical treatment. This is critical since it's really the medication treatments, like semaglutide, that are driving the weight loss in the short-term, not so much the coaching and dieting programs.
As startups increase access to semaglutide (whether truly indicated or not), insurance companies will become more stringent with approvals through prior authorization requirements and other barriers. They have already .
So, what happens now if patients can't get insurance coverage?
Consumers will have to pay out of pocket. But it will be the wealthy demographic uniquely able to afford out-of-pocket costs. This will widen the seen in patients with overweight and obesity. In fact, this is , especially among patients of color and Medicare-covered populations.
As the total addressable overweight and obesity market becomes restricted to wealthy consumers, startups will likely add a business-to-business (B2B) approach to their business model. This means they'll target employers, payers, or even health systems. They'll partner with these stakeholders to provide overweight and obesity care to their employees or beneficiaries, taking control of the entire care episode. The B2B approach will almost certainly drive more revenue than the direct-to-consumer approach since businesses have more capital than consumers.
Investors will flock to the weight loss area, pumping money into these startups like they pumped money into digital mental health startups in 2021. Similar to digital mental health startups, this metabolic health space will become oversaturated.
How will startups differentiate themselves?
I believe startups will differentiate themselves by offering integrated, sustainable care targeted at the . These startups will engage with payers, health systems, and employers to take full ownership of managing care for patients with overweight or obesity. They'll offer nutritional counseling, behavioral therapy, lifestyle coaching, medical treatment, and surgical treatment. Some startups may even be open to risk-based contracting to take on all the risk in caring for these patients. In my opinion, startups taking the integrated and sustainable approach to overweight and obesity treatment are the most financially and morally valuable.
Those not taking the B2B, integrated, and sustainable approach may find themselves in a situation like digital mental health company Cerebral. In brief, according to a reported memo written by three Cerebral board members, the market perception was that ran an . The company targeted consumers on social media, drawing them to its website. There, consumers could quickly fill out some medical and psych details, speak with a provider, get diagnosed with attention-deficit/hyperactivity disorder, and get a prescription. That easy. But Cerebral was investigated for its prescribing practices and its path forward is unclear as the company .
This is all to say, the direct-to-consumer startups offering weight-loss programs with these anti-obesity medications will likely be investigated for inappropriately prescribing semaglutide to patients who aren't indicated (not overweight or obese).
Novel anti-obesity medication like semaglutide remarkably reduces weight, making the weight loss space attractive for investors and entrepreneurs. Even more attractive is the total addressable market of patients with overweight or obesity. However, it will only be those startups delivering integrated and sustainable care to the populations who need it most that will perform well in the long run.
is a fourth-year medical student at the Icahn School of Medicine at Mount Sinai in New York City, and co-founder and content creator at , a healthcare media company focused on simplifying industry news. He is a member of 鶹ý's "The Lab."