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iStock, Douglas Cliff Scaling GLP-1 manufacturing capacity remains a key priority for the pharma industry, to help supply catch up with the insatiable demand for weight loss drugs. The FDA this week officially confirmed that shortages of Eli Lilly’s wildly popular GLP-1 drug tirzepatide—branded as Mounjaro for type 2 diabetes and Zepbound for weight management—are over, while the lowest dose of Novo Nordisk’s competing obesity drug Wegovy still has limited availability . The regulator in a statement said Lilly has assured the FDA “that their stated product availability and manufacturing capacity can meet the present and projected national demand” for tirzepatide in the U.S. BMO Capital Markets analyst Evan Seigerman in a note to investors on Thursday wrote that Lilly’s ability to maintain supplies of its blockbuster weight loss drugs is “a key differentiator” that could allow the company to continue to steal market share from Novo. Heading into third-quarter earnings season, Seigerman opined that “Lilly’s strength of supply could start to benefit the company.” Lilly reports Q3 earnings on Oct. 30, while Novo is slated to release its financial results on Nov. 6. However, Q2 earnings from the rival pharma giants in August started to show that the competition between Wegovy and Zepbound is getting tighter, with Lilly closing the market share gap with Novo. The Danish drugmaker reported lower-than-expected Q2 sales for Wegovy, which were negatively impacted by supply shortages. Doug Langa, Novo’s executive vice president of North America Operations, told analysts on the Q2 earnings call that the company will continue to “dynamically” manage supply with the Wegovy initiation dose strength of .25 milligrams to ensure that patients who begin treatment can continue without disruption. “We think it’s really important that patients are able to titrate through the appropriate doses,” Langa said. However, with this lowest dose of Wegovy remaining on the FDA drug shortages list, GlobalData analyst Sara Reci warned that “these constraints have created a bottleneck in Wegovy’s market performance.” Jefferies analyst Peter Welford echoed these sentiments in a Friday note to investors. “Scripts of the 0.25mg starter dose are -37% w/w and it is known Novo restricts this supply to constrain new patient starts, perhaps implying current supply bottlenecks, just at the time competitor Lilly has removed the shortages of Mounjaro/Zepbound.” Next Wave of GLP-1s So much attention in the GLP-1 space is on the Lilly-Novo duopoly, which is expected to retain around 70% of a potential $200 billion total market, according to a report last month from PitchBook and Morningstar. However, 16 new obesity drugs could launch by 2029, with approximately $70 billion of the GLP-1 market coming from these upstarts by 2031. This week we got a reminder that companies developing next-generation weight loss drugs are on the horizon looking to challenge Lilly and Novo’s market dominance. In terms of Big Pharma competitors, Roche said at a Pharma Day event on Monday that three early-stage obesity and diabetes drug candidates from its $2.7 billion acquisition of Carmot Therapeutics could bring in more than $3.6 billion in annual sales. In addition, several startups are also diving into the weight loss space. On Tuesday, Kailera Therapeutics launched with $400 million in Series A financing as it looks to bring four China-developed injectable and oral candidates for chronic weight management to the market. That same day, Metsera announced a supply-focused partnership with Amneal Pharmaceuticals for its pipeline of next-generation weight loss therapies. Emerging from stealth in April with $290 million in financing , Metsera is partnering with Amneal as the preferred supplier for MET-097—Metsera’s investigational, long-acting GLP-1 injectable—in the U.S. and Europe in exchange for undisclosed royalties. Truist Securities analyst Les Sulewski predicted in a note to investors that Amneal, which will invest up to $200 million on a new manufacturing facility in India with partial funding from Metsera and the Indian government, could become the “supplier of choice” for next-generation GLP-1s. “There appear to be no provisions from enabling Amneal to pursue additional GLP-1 contract-manufacturing partnerships, including current branded drugs plus those undergoing trials, including long-acting injectables,” Sulewski wrote. “Moreover, we think Amneal will have ability and appetite to capture the generics side post LOE [loss of exclusivity] around current branded GLP-1s.” As the biopharma industry scrambles to meet the insatiable demand for these drugs, Amneal, it seems, has embraced an “if you build it, they will come” approach.

Sales of Eli Lilly’s chronic weight management drug Zepbound are growing by leaps and bounds, but the product is expensive to manufacture and the pharmaceutical giant remains pressed to make enough to meet demand. Meanwhile, other companies are taking market share with compounded versions. Lilly has found a way to reach more patients with its fast-growing product while also taking a competitive stand against Zepbound knockoffs: It’s offering the drug directly to patients at a steep discount. Supplying Zepbound in this way makes the drug available to more patients and cuts out traditional pharmacies and pharmacy benefit managers from the equation. The move could pave the way for more drugs from Lilly and other drugmakers to follow the same path. Zepbound, a peptide designed to activate the GLP-1 and GIP receptors to spark its metabolic effects, carries a list price of $1,059.87 for a month’s supply. But that price does not reflect what Lilly gets for the drug or what insurance companies pay. Pharmacy benefit managers negotiate for rebates that lower a drug’s cost to the health plans they work for. Sponsored Post What Healthcare Can Learn from Costco The path forward is clear: employers must evaluate their health plan the same way they do their Saturday shopping excursion. By Jeff Bak, Imagine360 CEO and President The Zepbound single-dose vials that Lilly introduced last week are only for self-pay patients — people who don’t have employer-sponsored insurance or need to pay for their drugs outside of insurance. The drug will be available to patients through LillyDirect, a direct-to-consumer digital health platform Lilly launched earlier this year. Lilly says this channel provides a way to ensure patients that receive authentic Zepbound, not a counterfeit or untested knock-off. The company adds it’s also a way to ensure the drug goes to people who use it for obesity, not cosmetic weight loss. Even if patients self-pay for Zepbound, they’ll still need a prescription. The new vials are available only in 2.5 mg and 5 mg doses, which are the two lowest doses of the six doses of Zepbound available in self-injection pens. The new Zepbound vials slash the drug’s price nearly in half with a month’s supply costing $549, or $137.25 per vial. Directly providing the drug to patients avoids payer access issues, said Lee Brown, global sector lead for healthcare at research firm Third Bridge. While PBMs say they save money and pass those savings on to their clients, they also keep some of it, Brown said. Directly selling to patients cuts out PBMs. “I think the drug manufacturers are asking themselves, in a world that’s been simplified through ecommerce, because we’ve come so far in shipping, we really don’t need you,” Lee said of PBMs. “We can offer same attractive rebates and we know the client is receiving it.” Tirzepatide, the main pharmaceutical ingredient in weight drug Zepbound and type 2 diabetes medication Mounjaro, has become Lilly’s top revenue generator. In the first half of this year, the company reported $4.9 billion in Mounjaro sales. Zepbound’s revenue in the same period was $1.7 billion. In a research note sent following Lilly’s August release of second quarter 2024 financial results, Morningstar analyst Damien Conover wrote that the pharma company’s manufacturing ramp up is largely meeting current demand for tirzepatide products, but supply could be limited if demand increases quickly. Strong demand has made it challenging for both Lilly and Novo Nordisk to supply enough of their respective metabolic disorder products, leading to drug shortages. presented by Health Tech What’s Keeping Healthcare CIOs Up at Night: How to Improve Patient Satisfaction by Handling Calls More Efficiently Health systems have spent billions on portals while investments in modernizing the voice channel — the dominant preference of healthcare consumers — have taken a backseat. By Stephanie Baum Signs point to an easing of the shortages. Lilly’s tirzepatide in all of its doses for Mounjaro and Zepbound, are available and no longer in shortage, the FDA’s drug shortage database currently shows. For Novo Nordisk’s semaglutide, the main ingredient in the weight drug Wegovy, the FDA lists availability for all doses except the lowest one, which has limited availability due to an increase in demand. Brown said supply constraints in the market are tied to autoinjectors and not active pharmaceutical ingredients. As evidence, he notes that compounding pharmacies are able to make their obesity drugs without facing constraints for tirzepatide or semaglutide. Patients who order home delivery of GLP-1 drugs from compound pharmacies do so because of the lower cost, Brown said. Lilly’s direct-to-consumer offering is targeted to these price-conscious consumers. By offering Zepbound through LillyDirect, Lilly is replicating the compounders’ service offering with pricing that’s competitive with the compounded drug, Brown explained. Furthermore, patients don’t have to worry about purity issues that are a concern with compound medicines. Brown said that when Lilly introduced LillyDirect, he viewed it as a negotiating strategy to get managed care organizations and PBMs to open up more access to the formularies, the list of covered drugs. With the new Zepbound vials, Brown says Lilly is now signaling it doesn’t need PBMs for certain drugs. Last week, Pfizer followed Lilly into direct-to-consumer drugs with the launch of PfizerForAll. In addition to telehealth offerings, this platform will help patients access drugs and diagnostics for conditions such as Covid-19, migraines, and the flu. Brown said direct sales to patients won’t make sense for all drugs and pharma companies will continue to work with PBMs for some products. But the Lilly and Pfizer moves signal that more companies may opt to make more drugs directly available to patients. “You’re taking the leverage away from the pharmacy benefit managers,” Brown said. “Over time that could lead to price creep that’s not to the advantage of patients. But if everyone moves in this direction, you might have multiple direct-sales channels.”

VALLEY FORGE, Pa., Aug. 1, 2024 /PRNewswire/ -- Vanguard today announced an upcoming change to the portfolio managers of Vanguard Health Care Fund. Jean Hynes will step down as co-portfolio manager of the fund in January 2025. Ms. Hynes will continue to serve as the CEO and a Managing Partner of Wellington Management. Rebecca Sykes, CFA, who has worked closely with Ms. Hynes since joining Wellington Management's Health Care Team in 2007 and has advised the fund as co-portfolio manager since May 2023, will become the sole portfolio manager. The change is part of a thoughtful, long-term succession plan that ensures continuity for investors in the industry's largest health care fund. Ms. Hynes has focused on the health care sector throughout her 33-year career at Wellington Management, and she has served as a portfolio manager on the Health Care Fund since 2008. During her distinguished tenure as a portfolio manager, the Health Care Fund has outperformed its benchmark by more than 1.6% per year, and fund assets have doubled from $23 billion to $48 billion as of June 30, 2024. Ms. Hynes will continue to serve as a resource to Ms. Sykes and the broader Wellington Health Care Team. "Jean is a widely respected and incredibly talented leader and investor with deep knowledge of the health care sector built over decades," said Karin Risi, managing director of Strategy, Product, Marketing and Communications at Vanguard. "Vanguard is indebted to Jean for all she's done—and continues to do—for our clients, including the fund's impressive performance under her leadership and her strong commitment to developing a highly skilled and experienced team of health care investors. We have full confidence in Rebecca as she steps up to be the sole portfolio manager of Vanguard Health Care Fund." Ms. Sykes joined Wellington Management as a member of the Health Care Team in 2007. She is a Global Industry Analyst and health care portfolio manager, and team leader for Wellington's 15-person Health Care sector research team. Ms. Sykes earned an M.B.A. from the Wharton School and a B.S. in economics, finance, and healthcare management from the University of Pennsylvania, where she graduated magna cum laude. She holds the Chartered Financial Analyst designation and is a member of the CFA Institute. "The Vanguard Health Care Fund has such an amazing legacy, going back to 1984 with original portfolio manager Edward Owens, who was a legendary investor, a mentor to me, and a visionary leader of our Health Care Team," said Ms. Hynes. "I am confident that the fund's shareholders are in good hands with Rebecca Sykes at the helm. She is an experienced and extremely skilled investor and a great example of the depth of Wellington Management's investment talent. I'm excited to see her take over as the fund's lead portfolio manager." Throughout her tenure at Wellington, Ms. Hynes was a Global Industry Analyst covering the pharmaceutical and biotechnology sectors through 2013, became sole portfolio manager and leader of the Health Care Team in 2013, was elected one of three Managing Partners in 2014, and was appointed CEO in 2021. She is the fifth CEO in the firm's history and the first female to hold the position. Ms. Hynes is a recipient of several industry awards including Barron's 100 Most Influential Women in U.S. Finance for the last five years and Morningstar's Top Female Fund Managers of 2024. About Vanguard Founded in 1975, Vanguard is one of the world's leading investment management companies. The firm offers investments, advice, and retirement services to tens of millions of individual investors around the globe—directly, through workplace plans, and through financial intermediaries. Vanguard operates under a unique, investor-owned structure where Vanguard fund shareholders own the funds, which in turn own Vanguard. As such, Vanguard adheres to a simple purpose: To take a stand for all investors, to treat them fairly, and to give them the best chance for investment success. For more information, visit vanguard.com. For more information about Vanguard funds, visit vanguard.com or call 800-523-1036 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing. The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, so that investors' shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited. You can view Vanguard Health Care Fund current month-end-performance data and standardized performance (1-, 5-, and 10-year returns) and expense ratio information here. All investing is subject to risk, including the possible loss of the money you invest. © 2024 The Vanguard Group, Inc. All rights reserved. Vanguard Marketing Corporation, Distributor. SOURCE Vanguard