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There are fundamental headwinds coming for the US and UK food and beverage industries. Because of GLP-1s, there will soon be ~3 trillion fewer calories consumed in the US, annually.

I wanted to understand how the food industry is thinking about this. From the outside, it looks like GLP-1s are like a meteor hurtling towards this industry.

That is why I was so delighted to speak with Henry Dimbleby. Henry co-founded Leon, the healthy fast-food chain, and helped grow it into a business that was eventually sold for £100 million. He led the UK’s National Food Strategy, and now invests in the future of food as managing partner at Bramble Partners.

He also wrote Ravenous, which I highly recommend if you want to understand how the modern food system has learned to manipulate our appetites.

Our conversation gave me a much clearer way to think about what comes next, and here are the three most important ideas I took away from it.

But first, this edition of the newsletter is brought to you by Embla.

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1. Better Information Doesn’t Mean Behavior Change

I know, on balance, I should not be eating the Froot Loops my fiancée smuggled back from Canada. I know I should be eating my daily Weetabix with a square of dark chocolate and a fistful of blueberries. I know I should do a lot of things that are good for me because, like many of you, I am surrounded by more health information than I could ever reasonably act upon.

However, being well informed doesn’t necessarily mean I’m going to change my behaviour.

Henry Dimbleby believes this is not a personal failing but simply what happens when human appetite meets a food system designed to exploit it. As Henry told me, there has been “an extraordinary change in consumer understanding of health.” Covid made diet feel more directly linked to wellbeing, ultra processed foods moved from a niche debate into the mainstream, and AI made it easier for people to ask basic questions about what they should eat.

But as he put it, “you end up knowing what to do but not doing it.”

The problem is that our appetite has evolved to endure long periods of scarcity, where every ripe berry or dead antelope was a windfall against the entirely realistic possibility that you would not eat tomorrow. Two hundred thousand years of selective pressure has built a brain that lights up like a slot machine when it sees energy-dense food.

The commercial opportunity is, then, to make calorically-dense food saltier, crunchier, sweeter, cheaper, brighter, and more available. Then, find a way to make it taste good but not be satiating, and people will consume a lot of it.

But, Henry’s point is that food-industry executives are not sitting in dark rooms trying to make people sick. It is much more mundane and less sinister. “They’ve just noticed that if you put chocolate in cereal, they sell more,” Henry explains. “They’re following the money.” As the late, great Charlie Munger once said, “show me the incentive and I’ll show you the outcome.”

That was all before GLP-1s exploded onto the scene. And now for the first time in history, we have a technology that can directly weaken the pull of appetite, with Henry coining the phrase that our “evolved appetite is being hacked by these drugs”.

The consequence, in his words, is that “people are going to be able to match that health intent with actually what they eat.” A Cornell study gives us an early look at what that means in real household transaction data, which found that within 6 months, households with at least one GLP-1 user reduced grocery spend by 5.3%, and that decline was concentrated in calorie-dense, processed categories like savory snacks.

2. Consumers Want Value Per Bite, Not Calories Per Bite

I expect that many more millions of people in the US, and eventually the UK, are going to be on GLP-1s in the next few years—accelerated by Medicare Part D coverage, oral options coming to market, and potential NHS reimbursement. When that happens, we can make some forecasts on changes to annual calories consumed per year.

Henry told me that while people are losing weight on these drugs, they eat about 30% less, and in maintenance, he thinks they may settle at roughly 10–15% fewer calories per year.

Morgan Stanley modelled similar calorie reductions, and estimated that roughly 55 million US patients will be on a GLP-1 by 2035. Accounting for discontinuations, cycling on and off therapy, and segmenting lower BMI users with lower calorie reductions, they modelled a base case of a 1.6% reduction in annual US calorie consumption, which will disproportionately affect the demand for highly processed foods.

The food industry has never had to contend with a volume-shrinking market. So, how on earth do they respond?

Henry’s answer was threefold:

1. Take share from competitors.

2. Sell premium food.

3. If you’re a supermarket, sell more non-food.

Focusing on point two, if people are eating less, the food they do eat has to justify itself more. Henry’s phrase for this was “value per bite,” where the calories are no longer enough and the product has to come with a healthy reason to consume it: protein, fiber, satiety, muscle preservation, blood sugar, gut health, or some other claim that makes the food seem more useful.

3. Who Is Most at Risk in This New World?

Henry is clear that “most people on these drugs still seem to enjoy food, just in different amounts.” In his view, people will still enjoy going out to restaurants, because, after all, eating food with other people is a social experience, so that won’t change too much. But food-spend is likely to change. People on GLP-1s are likely to go out to eat just as much but spend less per outing.

These changes will lead to some casualties: “Businesses that are basically selling carbs and fat very cheaply will struggle.” Beverage companies are slightly more insulated, because they can innovate to offer zero-calorie products, like Coke Zero or sugar-free Sprite. But, it is going to be much harder to innovate in snacks and alcohol, where cutting calories is much more difficult.

That is why Henry thinks the first casualty may be the corner-shop and small-format retailers that make their money from the products GLP-1s disrupt: salty snacks, chocolate bars, full-sugar drinks. They may even affect sales of alcohol, vapes, cigarettes, lottery tickets, and other impulse purchases.

And then, of course, the larger candy companies are at risk too, like Hersheys, Cadbury, and my dearly beloved Kellogs (cereal is basically a sugar-delivery mechanism).

No more Froot Loops? Maybe.

**The views, opinions, and recommendations expressed in this essay are solely my own and do not represent the views, policies, or positions of any other organization with which I am affiliated. This content is provided for informational purposes only and should not be considered medical, legal or investment advice.**

In this issue, I’m experimenting with a new format: five graphs that have caught my eye over the past fortnight. I’ve been thinking about how this data feeds into the bigger narratives playing out in GLP-1 and cardio-metabolic health spaces, which are wide and varied as you’ll see. These are not the top-five of anything but, rather, five charts that I personally can’t stop thinking about.

Now, let’s get to it.

Is the GLP-1 market overpriced?

I’m only now coming to terms with the fact that the obesity market may be overpriced. In many ways I’m shooting myself in the foot here, given that I’m trying to build a niche B2B media company in this space, but I strongly believe that is all secondary to truth-seeking.

In my view, the obesity market is running too hot because analysts are cranking up their sales-volume projections for new drugs in the pipeline while underestimating how much generic semaglutide will erode the market share of those name-brand drugs’.

If you look at India, which I’ve been glued to lately, manufacturers have flooded the market with cheap, generic semaglutide and in the space of just one month, it’s eroded Mounjaro’s market share by an estimated 7%.

Given that Mounjaro became the best-selling drug in Indian history, and has a better weight-loss profile than Sema (with similar side effects), I’m confident the same dynamic will play out in the UK and US when semaglutide goes off patent in 2032.

Once that happens, I believe it’ll severely dent the market share of Cagrisema (Novo), Retratrutide (Lilly), Survoutide (Boehringer Ingelheim), and MariTide (Amgen)—all of which are expected to enter the market between 2027 and 2029.

The problem is that GLP-1 medications are joined at the hip. It doesn’t matter if it’s Wegovy or Mounjaro, 20% efficacy or 25% efficacy—hell, even 30% efficacy. When one of these medications goes off patent, the branded medication shares will decline, because incremental improvements in efficacy or tolerability will not be enough to convince price-sensitive consumers or insurers or healthcare systems to fork over a premium when there’s a ‘good enough’ semaglutide for $60, versus a $6,000 retatrutide.

Unless one of the new pipeline drugs shows another differentiator like alzheimer protection, or becomes combined with something like a myostatin inhibitor that can protect muscle-mass loss, then I believe we’re going to see the semaglutide patent release cause a nosedive for every other branded GLP-1 on the market in 2032.

Will oral GLP-1s cannibalize injectable sales?

We’re approaching the end of the 4-month mark since oral Wegovy’s launch, and the success has surprised everyone, including me. Novo has developed a strong lead with UBS’s forecasts projecting 400k total prescriptions at the end of Q1, with the majority of sales coming through cash-pay channels capturing net-new GLP-1 users.

Foundayo is off to an okay-ish start with 3,707 prescriptions in its first two weeks of launch, compared to oral Wegovy’s 18,410 prescriptions.

However, I expect that oral Wegovy sales will begin to tinker down over the coming weeks, as competition heats up. Foundayo and Wegovy are similarly priced for the starting doses and are fighting for the same type of patient (needle-averse, price-sensitive).

But, with the rise of oral GLP-1s, the big question is how much the pills will cannibalize the injectable market, and in my view, it won’t be much at all.

There are a few reasons why I believe this.

First, pricing for oral Sema, Foundayo and injectable Wegovy cluster around similar price points of $149–$349, which gives us something close to a controlled experiment. If prices are roughly the same, the only thing left for a patient to optimise around is preference.

For some people a pill is obviously the easier option because they’ve taken tablets their whole life. For others, a weekly jab is the easier option because one decision a week beats 365 decisions a year, especially when the pill comes with a 30-minute fasting window or drug-drug interactions (like Foundayo) which increase friction.

Second, I have higher conviction that patients on a daily oral pill may switch to an injectable over time, primarily driven by perceptions of weaker efficacy.

To pressure-test this, I ran a social listening scrape across r/WegovyPillWeightLoss, r/WegovyWeightLoss, and r/Wegovy on 23rd April 2026. From 2,897 threads (post + comments) I filtered down to 1,152 oral-only discussions and coded them across side effects, efficacy, cost and access, and other themes.

My analysis showed that roughly one in eight oral-only discussions were about efficacy concerns, and the vast majority reported slow responses to the drug or appetite/food noise coming back.

I believe this is the group most likely to switch to injectable therapy (Wegovy/Mounjaro), because injections will be seen as a stronger or even a more dependable option. And, I expect this cohort to get pretty big, because GLP-1 patients have mismatched expectations (fuelled by social media and AI slop), believing they should be dropping 20lbs a month on these drugs.

How to improve DTC retention

If you’re a GLP-1 patient, a lot has to go right in months one to three. You’ve got an onboarding form here, a pharmacy portal there, a coaching app on your phone, and a telehealth link buried in an email. Want to re-order? That’s one login. Check your next consult? Another. Talk to a prescriber? Good luck finding the link.

Most patients don’t bother, and they churn when friction is high and cognitive load is higher.

This is where Light-it comes in. They’re the healthcare product and engineering team behind some of the fastest-growing GLP-1 telehealth platforms, and they've been a sponsor of GLP-1 Digest since the beginning.

Across the platforms they’ve built, where onboarding, telehealth, prescriptions and coaching all sit inside a single patient portal, early drop-off runs at around 35% over the first three months.

On fragmented setups it’s more than 50%.

That’s a huge ROI improvement, because if you can lift retention by even a few points, that compounds across thousands, if not hundreds of thousands of patients, and bolsters your customer lifetime value.

If you’re a telehealth provider and your retention curve looks more like the red line than the green one, talk to Light-it. They’re the product and engineering team behind several of the GLP-1 platforms you’ve already heard of.

Fix your retention curve

Canadian insurance can cover it

Canada is not a viable market for D2C GLP-1 expansion. Approximately 75-80% of Canadians have medical insurance through their employer, and I believe the vast majority of those health plans will begin to cover generic semaglutide for weight loss once the drugs are approved by Health Canada. Generic pricing will come down by at least 40–70% which is cheap enough that refusing coverage will become politically indefensible.

That leaves a tiny residual pool of uninsured and patchy-coverage patients paying out of pocket to D2C telehealth players like Felix. Given the Canadian obesity market is already small, the remaining serviceable market is a sliver of a sliver.

To be profitable then, a D2C platform would need patients to pay a premium for one of two things where they can make margin. Either a differentiated formulation, like compounded generic semaglutide with B12 or whatever else, or a high-touch service layer that’ll keep patients on the platform.

I’m not convinced that either method holds up. Compounded formulations stole large market share in the US because they undercut Novo’s branded pricing by 60–70%, which created the cash-pay arbitrage that turbocharged growth for Hims. That arbitrage doesn’t exist in Canada, because the generic is already going to be so cheap, so there’s nothing for a compounder to undercut.

For the premium service layer, I do think some patients will pay for white-glove care, coaching, and continuity, and there’s a legitimate business in serving them. It’s just not a venture-scale business.

In my view, the economics of the Canadian market is purely an information-gathering exercise in how a Western market responds to generic GLP-1s. But for D2C companies looking to expand, that’s all it is.

**The views, opinions, and recommendations expressed in this essay are solely my own and do not represent the views, policies, or positions of any other organization with which I am affiliated. This content is provided for informational purposes only and should not be considered medical, legal or investment advice.**

I also think that in the next three to six months, fewer of you will listen to podcasts directly, and more of you will ask your AI agent to brief you on what matters. I want to be ready for that. So, starting today, there’s a button below that lets you pull this episode directly into Claude for a summary and analysis, and soon, I’ll have a way for your personal AI agent to do the same from your phone.

Read with Claude

Now, on to this week’s guest. Lord James Bethell is a former Health Minister who served as Minister for Life Sciences in the UK during Covid. He sat on the IPPR Commission that called the UK “the sick man of Europe” and now chairs Business for Health and works closely with the private health sector through his advisory role at Oviva.

In this fascinating conversation, we zoom all the way out to the big picture, covering the population-level impact of GLP-1s, how government ministers are thinking about the direct-to-consumer market, and the widening gap between what the NHS aspires to and what it actually delivers.

There are so many excellent snippets, and I have chosen three of them to expand on here.

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1. Do GLP-1s Extend Healthspan?

Last month, the Office for National Statistics published data showing that healthy life expectancy (years of life spent in good health) in the UK had fallen to its lowest level since records began in 2011. Men can now expect to spend 60.7 years in good health, while the average for women is ever so slightly higher at 60.9 years.

Based on the UK population average, at 33, I can expect roughly 27 more years of good health before I’m zapped by a chronic disease or a bout of sickness that takes me out of work and makes me more dependent on the NHS. And then what? The average UK male lives to around 79, so if the good health clock runs out at 61, that’s 18 years I’m most likely living as a burden to the state.

The only way to reasonably fix this is to keep people healthy for longer by preventing the onset of disease (morbidity) as long as we possibly can.

But the political will for prevention has never truly landed in Whitehall, because the incentives are misaligned. The work on morbidity-prevention needs at least a twenty- or thirty-year time horizon, but the government thinks in a five year cycle.

When I put this to Lord Bethell, he didn’t sugarcoat the consequences:

If we have people living longer but spending longer in poor health, it costs the country a fortune. Not the NHS, but the Exchequer [treasury]. It costs our businesses and communities because they’re not contributing. I don’t know how your generation is going to pay off the national debt.

Neither do I. And the picture is particularly bleak when you consider that deaths are now exceeding births, which means the young, healthy people who are supposed to be funding this mess with their taxes are a shrinking population.

Basically we’re becoming like Japan, with a population that skews elderly, but we Brits are much sicker.

However, there are some reasons to be cautiously optimistic with the arrival of GLP-1s. Similar to statins, they can slow the effects of chronic disease that can disable you and limit one’s physical or mental functions. This is known as secondary prevention, which means easing symptoms of chronic disease while not forestalling morbidity. Secondary prevention is the first test a drug has to pass before it’s considered for primary prevention, and therefore as a healthspan-extending drug.

In the SELECT trial, semaglutide reduced major cardiovascular events (like heart attacks, strokes, and deaths) by 20% in adults with obesity and established cardiovascular disease, independent of weight loss, which means the drug is most likely exhibiting anti-inflammatory effects on the cardiovascular system.

On a population level, for every 67 people treated over a 3-year time frame, one person will avoid a heart attack, stroke, or other cardiovascular-related death.

This efficacy metric is called the number needed to treat (NNT).

At first glance, the NNT for GLP-1s is less impressive than the NNT for statins, which is ~20/25 ( statins are also much cheaper). But statins only prevent cardiovascular events.

GLP-1s prevent cardiovascular events and produce significant weight loss, which independently reduces the risk of type 2 diabetes, joint disease, sleep apnoea, and several cancers. Statins, by contrast, do one thing: they lower cholesterol to reduce cardiovascular risk. GLP-1s do that and fix the underlying metabolic dysfunction driving much of modern chronic disease. So an NNT of 67 is a crude measure here, capturing only one benefit of a drug that is producing several.

Across the full range of cardio-metabolic conditions it prevents, the real NNT is likely much smaller.

But what about primary prevention? Primary prevention means stopping the disease from developing in the first place, in people who are currently healthy or at-risk but asymptomatic. It is a far more interesting and commercially important question on whether GLP-1s can deliver on this, and the argument I want to propose is comparing the primary prevention effects of statins with GLP-1s.

Statins are miracle drugs because they can prevent cardiovascular disease in high-risk people, and there is a growing consensus that the cumulative lifetime exposure to LDL-C is the risk factor that most determines your cardiovascular risk.

Therefore, starting statins earlier in moderate to lower-risk people, including people in their 30’s before the plaque has had decades to accumulate produces compounding benefits that lowers lifetime risk of a major heart attack, stroke or death.

GLP-1s have not shown any benefit for primary prevention, because those studies don’t exist yet, and if they did, the first step would be identifying people with obesity at high risk of developing cardiovascular disease and trialing prevention in that scenario.

But if cumulative exposure to a single risk-factor justifies early intervention at an earlier age with statins, what does cumulative exposure to LDL, triglycerides, blood pressure, blood glucose, systemic inflammation, and visceral adiposity imply for a drug that lowers all of them simultaneously?

2. The UK Private Market Is Scaling

The reaction from people inside the NHS to the direct-to-consumer GLP-1 market is, overwhelmingly, one of disdain and distrust. I’ve heard many NHS clinicians refer to online providers as “cowboys,” which is interesting given that those cowboys are processing upwards of 100,000 prescriptions per week, roughly 2.5 to 3 million patients a year, at a scale the NHS has shown no ability or willingness to match.

What’s actually happening is that the monopoly on the patient relationship is dissolving away from the traditional gatekeepers of health, and when power structures change, the obvious reaction is one of visceral anger and frustration. More importantly, the private GLP-1 market has expanded the willingness to pay for healthcare in general.

Lord Bethell puts it this way:

It completely reboots people’s expectations about how they’re going to engage in their own health. If you’ve struggled with your weight for years and suddenly you’ve lost five kilos, ten kilos, and you’re on a different trajectory — my goodness, that’s tremendously good value. So maybe you start thinking, maybe I’ll just pay for my Covid vaccine, or maybe I will take a Shingrix vaccine, or maybe I will do any number of interventions that will modify my risk.

GLP-1s were simply a wedge into the broader commercialization of healthcare. What we’re going to see in the next two to three years is people no longer waiting for a general practitioner (GP) to organise a blood test or recommend a treatment because they’ll just go to the private market, pay, and move on.

The common pushback from NHS people is that privatisation perpetuates a two-tiered system and exacerbates inequity. My two responses to that are: first, people going private are in fact relieving pressure on the NHS, which is a net good.

And second, and more fundamentally, the inequity argument assumes there is an equitable system being undermined. Equity, in this context, would mean giving everyone who needs these drugs a genuine shot at accessing them. But the NHS isn’t currently offering GLP-1s at anything close to population-scale, because most of the people going private were never going to get these drugs through their GP in any reasonable timeframe.

3. Privatization Promotes Agency

Right now I’m infected by a mind virus called agency which I picked up from the depths of tech Twitter. If we want people to exercise agency over their own lives — a permissionless, “just do it” mindset — then how? And why do some people exercise more agency than others? I don’t have a clean answer to that.

But I do know this: the NHS is the least agentic system I can think of. The social contract is, as Bethell puts it:

Live your life however you like, no worries mate, just rock up and we’ll put you back together again. Which is proving to be a very, very expensive underwriting exercise by future generations.

The consequences of disengagement are visible everywhere in the system.

Bethell points to missed appointments as a telling example:

The NHS logs hundreds of thousands of ‘did not attends’ every year, and in political focus groups, the frustration with people who skip appointments they didn’t pay for and didn’t fight to get runs surprisingly hot.

When there’s no personal investment in accessing care, there’s no cost to wasting it.

But the system also infantilises the people who do engage:

The culture of the NHS is: don’t believe the patient. If you ask the patient how much they weigh, don’t believe them. What a lousy way to run a health system.

I personally think elements of privatization fixes this. When people pay for their own care, they have real skin in the game, a direct incentive to show up, follow through, and take ownership of their health decisions. And once there is ownership, I think agency naturally follows.

Whether the NHS adapts to this shift or continues to resist it remains to be seen, but the direction of travel is that more and more people are already making the choice for themselves, and I don’t see that reversing.

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**The views, opinions, and recommendations expressed in this podcast and essay are solely my own and do not represent the views, policies, or positions of any other organization with which I am affiliated. This content is provided for informational purposes only and should not be considered medical, legal or investment advice.**

For the past two years, I’ve been visiting South India regularly, and I’d heard from many people that you can buy Ozempic over the counter without a prescription. So, on my last visit, I wanted to find out for myself. A few months ago, I walked into one of the most popular brick-and-mortar pharmacy chains and asked for 0.25mg of Ozempic. I put down a ₹1,000 (~$11) deposit, and sure enough, the pharmacist told me to come back to collect the pen. No prescription required and the whole thing took me about five minutes.

India runs on a principle best captured by a Hindi phrase that drives me nuts: “sab chalta hai,” which means “everything goes.” And, as I found, that also applies to “prescription-only” medication. In India, you can now buy semaglutide for less than a large oat milk latte at Starbucks. So, what exactly is the opportunity for direct-to-consumer telehealth companies looking to expand into this market?

DTC telehealth founders have spent the last two years pinning thumbtacks on a world map, hunting for the next market to enter, and now that semaglutide is off patent in India, it certainly seems like a gold-rush moment. But is the Indian market really where you want to place your bets?

On paper, I understand the appeal: 14% of the world’s obese population lives in India, and those people are mostly in the middle and upper-middle classes. There is also a growing middle class and many digitally savvy consumers who are used to paying out of pocket for healthcare. My estimates show that the obesity-only GLP-1 market could exceed $600M USD if we assume a 2% penetration rate, though it would take a few years for the market to mature.

Several hundred million makes it sound like a market worth chasing, and a well-capitalised Western player could swoop in with aggressive marketing and a premium brand offering a nice and shiny subscription model to snatch up market share. But not everything that looks good on paper is worth the investment. Over 40 manufacturers are expected to launch generic semaglutide in the coming months, and several already have, at prices as low as $14 for a month’s dosage, which is enough of a price disparity to make people’s eyes water in the US (and mine, to be fair).

What we have on our hands is a commodity market with competition so fierce and margins so razor thin that manufacturers of semaglutide will become the first losers while those in the distribution-layer—like wholesalers, pharmacies, and e-pharmacies—will become the winners, because they own the relationship with the customer and decide which manufacturers get the volume. So, if distribution wins in a commodity market, then surely this is the moment for DTC telehealth to shine. Right?

Something new I'm trying with the Digest: spotlighting research that genuinely caught my attention

The team at Simple Online Pharmacy recently published Breaking the Silence, a white paper on the stigma around GLP-1 treatment in the UK, and it’s probably the most comprehensive snapshot of GLP-1 perception in the country right now.

After spending the better part of three years studying consumer behaviour around these drugs, it still baffles me how many people don’t recognise obesity as a chronic disease. Their report found that nearly half of UK adults don’t consider it a medical condition. And perhaps unsurprisingly, nearly two-thirds of patients won’t tell friends or family they’re on treatment!

That’s judgement rolled into treating weight as a moral failing rolled into a complete lack of scientific understanding. The knock-on effect is that people won’t talk openly about their treatment, and that has real consequences for people sticking around long enough to achieve good long-term health outcomes.

Very much worth reading the whole thing.

Read the Breaking the Silence report

The Margin Problem

One glaring issue I want to highlight straight away is that some DTC players think they can waltz into India and make money simply by shipping the drug to consumers. They’re in for a rude awakening when they realize that it’s the manufacturer who sets the retail price, not the distributor.

Dr. Reddy’s, Sun Pharma, and Biocon print the “Maximum Retail Price” (MRP) on the medication box, which is the legal limit that no retailer, pharmacy, or platform can exceed. This is a key nuance of Indian economic law where the manufacturer controls the price rather than the market. This holds true for pharmaceutical drugs as it does for any packaged good, ranging from soft drinks and foodstuffs to shampoo.

In the case of generic semaglutide, which isn’t on India’s National List of Essential Medicines, there’s no government price cap, so the manufacturer works backward from the MRP and takes their margin at the ex-factory level first. The little margin that remains is what trickles down to the wholesaler and retailer.

Since competition is so fierce among manufacturers, it’s likely that retail margins will be considerably better for incumbent e-pharmacy players in India, like Apollo Pharmacy, Tata 1mg, and Netmeds. These platforms already have millions of consumers buying medications through them every month, which gives them the leverage to negotiate better terms directly with manufacturers and bypass the margin-squeezed wholesaler entirely.

But those margins certainly won’t be flowing to the newcomers like Hims & Hers, HeliosX or Voy, if they’re trying to build distribution from scratch.

So, if you’re building a purely transactional service, you might be making a 20% margin, but the kill shot is that those margins don’t come close to making up the customer acquisition cost (CAC).

At an MRP of ₹3,200 (~$34) per month for a generic semaglutide pen, and assuming 80% of that goes to the drug cost, you’re left with ₹640 (~$4) in gross profit per order. After talking with some insiders, I estimate that for a single-category GLP-1 entrant, CAC is around ₹2,000 (~$21) per customer, which is probably on the lower side of the range.

That means it would take around 5 months to break even, and that scenario is optimistic, because it assumes that the customer actually sticks around. If CAC doubles to ₹4000, which is likely, given the competition between the e-pharmacy players, then it’ll take 9 months to recover CAC, which would require a herculean feat of customer retention.

Ultimately, the Indian market punishes low-margin chronic medication, unless you eliminate CAC (which you can’t do), raise prices (that you can’t set), or reduce supply (which you don’t own).

The Retention Problem

If those margins still sound doable, then we have to ask the obvious question about retention: Can you actually keep a customer on your platform for 5+ months when they could walk into any pharmacy and buy the same molecule for ₹1,000?

Indian consumers are historically price-sensitive and, unlike American consumers, have no brand-loyalty and no switching cost, which means retention is going to be the single biggest challenge for transactional players in India who have no way to differentiate themselves.

That’s why the service-layer is so important. While the drug price is fixed, you can add additional services like coaching or consultations through an app to increase margins. Health platforms offering wrap-around care can charge a premium and recover their CAC in a shorter time frame.

While this model is attractive and those service-based players should, theoretically, have a higher chance of retaining customers, the wrap-around care model is already well established in India and already packaged into most consumers’ expectations.

Apollo operationalizes shipping + consultations + diagnostics as one integrated experience, while Tata 1mg has normalized “doctor consultations on chat,” “lab tests at home,” and subscription-based care-plans.

Similarly, Netmeds runs a membership layer (cashback + lab discounts) and positions consultations, labs, and records as some of their core features. Lots of these incumbents also deliver the medication on the same day, and often within 30 minutes to 2 hours in most of the metropolitan areas. So, as above with the distribution problem, it’s gonna be tough for any newcomers to differentiate themselves from the platforms that have been in the market for years.

Conclusion

Generic semaglutide arriving in India is, on balance, a genuinely good thing. Eighty million people with obesity will have access to a drug that will completely change their health. That level of accessibility not only unlocks better health but also more economic productivity through reduced sick days and fewer obesity-related complications. It’s hard not to be optimistic about the health of India’s population over the next decade.

But for DTC telehealth founders looking for the next hundred-million-dollar revenue stream, I struggle to see that opportunity. As another country with patent-expiry looming, India is now a commodity market for GLP-1s but one with retail-price caps, entrenched distribution, and no prescription enforcement.

If you’re still seriously considering India after everything I’ve laid out, then at the very least, you need boots on the ground and a local team who understands the consumer. Forget selling the drug, because the margin isn’t there. Instead, partner with a manufacturer who needs a digital channel, and build an army of doctors who are prescribing the drugs in clinics so that you aren’t relying on marketing as your only method of customer acquisition.

Nonetheless, sometimes the biggest opportunity is recognizing when to pass.

**The views, opinions, and recommendations expressed in this podcast and essay are solely my own and do not represent the views, policies, or positions of any other organization with which I am affiliated. This content is provided for informational purposes only and should not be considered medical, legal or investment advice.**

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The best podcasters have this quality of asking really good questions, and what I’m learning is that the way to do that is to ask from a place of genuine curiosity, no matter how “dumb it sounds. I’m slowly getting better at it, I think, by getting over the fear of recording and putting the episodes out into the ether.

The other thing about podcasting is that sitting one-on-one with world-leading experts is an insane way to learn. I kind of wish I did it sooner, because I’m absorbing information at hypersonic speed, and I’m hoping to pass those insights on to you.

That brings me to Dr. Beverly Tchang, who is a triple board-certified obesity medicine specialist, endocrinologist, and associate Professor of Clinical Medicine at Weill Cornell. I’ve followed her work for a long time, and she’s one of the few expert clinicians who thinks commercially, because she also advises Ro.

Our conversation went on for over an hour, and it could’ve easily gone longer. I urge you to listen in full, and here are three insights that I think will have a tangible commercial impact on where this industry is heading.

But first, this post is proudly brought to you by Sacher AI.

Retention is the business problem every D2C weight-loss platform is trying to solve right now. And increasingly, teams are betting on AI coaching to fix it. But the problem is that without genuine clinical depth and experience in this space, you end up with one of two outcomes: an AI agent that plays it so safe it’s useless, or one that crosses lines you didn’t know existed.

Either way, retention doesn’t improve.

Sacher AI is a leading AI consulting firm that I point people to because they’ve solved both sides of this problem. They’ve analyzed thousands of real patient conversations and built systems that know how to retain patients and keep them engaged. Their team includes clinicians who’ve published peer-reviewed research on AI in obesity care.

If you’re building patient-facing AI in this space, talk to Sacher AI first.

Start a conversation

1. The maintenance problem

I’ve noticed the conversation in the most popular GLP-1 subreddits shifting from “how do I lose weight with GLP-1s” to “how do I keep the weight off,” which means we’re entering the next battleground for telehealth platforms: retaining weight-loss maintenance customers.

Weight-loss maintenance starts once the active weight-loss phase is over and the patient’s goal shifts from losing more weight to preventing weight regain. Many providers think that both the weight-loss and weight-loss maintenance phases require the same level of hand-holding, so they’re promoting wrap-around care services for both phases. But Dr. Tchang thinks this is the completely wrong approach for retention and lifetime value:

“In weight-loss maintenance, people just don’t want to feel like they are in a program or that they’re patients still, that they’re being medicalised. They just want to feel normal.”

This is such a powerful clinical insight, because it means maintenance is a fundamentally different product to weight-loss.

Even though patients are often taking the exact same drug at the same or slightly adjusted doses, what changes is how they want to buy it and the level of care associated with it, and I think this explains why many customers switch and migrate to simpler, more transactional services where they can get their medication without the ankle-monitor and simply get on with their lives.

For providers who want to keep these customers, there are two obvious levers that would have a dramatic impact on both contribution margin and lifetime value.

The first is scaling back the check-ins and clinical surveillance, which is both a cost-saver and exactly what patients are asking for.

The second lever is injection frequency, extending pen usage through off-label dosing to stretch what was a monthly supply into six or eight weeks so that the patient injects less often and pays less. There is increasing evidence that this approach works, with a recent study publishing the benefits of infrequent dosing as a method for maintaining weight loss.

Both levers would create a product that feels less like ongoing treatment. And if Dr. Tchang is right that maintenance patients just want to feel normal, I think this is exactly the kind of low-friction experience that would keep them from dropping off.

2. Why are we waiting for people to get sick?

A patient’s BMI determines their eligibility for GLP-1s, and those cut-offs come from clinical trials: BMI of 27 for patients with comorbidities and BMI of 30 for those without. So, in practice, a patient must gain enough weight to cross the BMI threshold before they can access treatment.

But what about those people just on the cusp of eligibility, or those who’re trending dangerously upward in weight but don’t yet meet the BMI criteria?

Before BMI became the standard, MetLife — one of the biggest US life insurers — used height–weight tables that flagged any deviation from your baseline. Someone who’d been 66 kilograms their whole adult life and had slowly (or suddenly) put on 20% would get attention from a medical provider, because clearly this is a signal that something is happening metabolically.

The problem now is that we’ve resorted to using BMI everywhere, and BMI is only a snapshot in time. It tells you where someone is, not where they’re heading, so that same person, whose body is clearly changing, gets nothing because their number still reads as ‘normal.’

As Dr. Tchang put it, “why would you wait for someone to gain even more weight before you intervene. That sounds crazy?”

This is where microdosing becomes a very interesting concept.

The definition of microdosing is a minefield and we discuss this in the podcast, but “sub-therapeutic” dosing could be enough to stop weight creeping above the “overweight” and “obese” BMI thresholds without needing (or becoming eligible for) the full therapeutic dose.

Dr. Tchang does this in her clinic already with slower titration and in-between doses, tailored to the individual.

The conundrum of course is that healthcare professionals will be demanding evidence that this approach works. And yet, Dr. Tchang is very blunt about this:

“The amount of money it takes to show that this intervention prevented XYZ in a particular population is just too large. Too many uncertainties and too many variables. No one is going to invest in that clinical trial.”

So, we’ll probably never get the randomized controlled trial that proves early low-dose intervention prevents obesity. But there is biological plausibility, and as Dr. Tchang puts it:

“We are different people every decade. Your body changes through every stage — and the idea that a single BMI number determines whether you deserve treatment ignores everything we know about how bodies actually work.”

Her approach is to be transparent about the uncertainty and let the patient decide: “As long as we’re honest that we have no evidence, if this is still a risk that [a patient wants] to take on, we can do that together.”

I personally think we’re heading toward a world where treatment thresholds come down, and I’m a strong advocate for clinicians with real expertise pushing those boundaries rather than waiting for guidelines to catch up.

Of course, players like Noom and Hims & Hers have already lowered their BMI thresholds and use a microdosing strategy for these customers — and it’s only a matter of time until we see this strategy writ large in the cash-pay channels.

3. Is it time for over-the-counter GLP-1s?

I want to come back to something Dr. Tchang said that I’m still chewing on.

She thinks we need an over-the-counter GLP-1 to really make a dent in the obesity epidemic, and while most of her colleagues would balk at that (as I did), her reasoning is hard to argue with.

First, we already have OTC obesity medication. Orlistat, sold as Alli since the early 2000s, has a terrible reputation as a weight-loss medication because it rarely works, but Dr. Tchang’s point is that it there is precedence for doing this already, despite those drugs being ineffective:

“I don’t think of Orlistat as an obesity medication anymore because it doesn’t really target the root cause of obesity. No study has shown that people with obesity hyper absorbed fat from their diet. That’s not part of the pathophysiology.”

And yet, if a medication is approved for OTC sales, it has already cleared a safety threshold, and the consumer doesn’t need to parse clinical trial data or find a willing prescriber. The safety question is answered by the fact that it’s on the shelf.

“If it’s over-the-counter, that means it has to be safe. You check that box automatically when that bottle is right there at the checkout.”

And Dr. Tchang’s argument for why this matters is about who we’re actually trying to reach. It’s not the patients already in the system and it’s not the people on her clinic waitlist or browsing Hims. It’s the people who will never enter the medical system at all.

“That’s where our non-patients are. People who are not in the medical system, people who don’t have access to doctors like me. They’re just looking at feeds and reels and ads and what their friends are buying. They’re getting their information from marketing.”

Dr. Tchang calls this space “primordial care” — the stage where people engage in their health journey before they engage in the healthcare system and obesity has always lived there.

“For decades we’ve said it was a lifestyle problem, and it’s always existed in this supplement space. It’s never really entered the medical system. . . . It’s a muddled game between industry and payers, consumers, prescribers, patients. Who’s paying for what and who’s actually getting the service? It’s very messy.”

OTC potentially cleans all of that up, and in her view, Dr. Tchang predicts that obesity will be solved:

“It’s going to be driven by Gen Z and Gen Alpha in combination with an over-the-counter medication. And that’s how we’re going to fix this.”

I personally think the lowest starting doses of semaglutide and tirzepatide could feasibly be sold over the counter with pharmacist oversight, much like how lower doses of sildenafil and statins can be dispensed across UK pharmacies without a prescription.

For the stronger doses, a prescription would definitely be needed.

It’s funny because two decades ago, the same conversation was happening with statins. The population-level cardiovascular benefits were so clear that making them more accessible seemed obvious. And yet we still haven’t fully got there, largely because the media demonised statins despite their life-saving potential. Whether GLP-1s follow the same trajectory or break through faster remains to be seen, but if a clinician like Dr. Tchang is openly advocating for OTC access, it’s certainly on the minds of public health experts too.

Founding memberships are open. Get exclusive access to paid research, white papers, and the kind of analysis that actually moves the needle on your GLP-1 business decisions.

I am also taking sponsorships for Q3. Drop me an email by replying to this post.

**The views, opinions, and recommendations expressed in this podcast and essay are solely my own and do not represent the views, policies, or positions of any other organization with which I am affiliated. This content is provided for informational purposes only and should not be considered medical, legal or investment advice.**

The thing is, though, no matter how convoluted an academic paper or earnings report is, numbers never lie. You just need someone who can figure out what the hell is going on under the hood.

That’s why I was so glad to sit down with Paul Cerro to break down Hims & Hers’ latest earnings report.

Paul is the Chief Investment Officer and Founder of Cedar Grove Capital Management, a registered investment advisor based in Michigan. Before that, he was an investment banker at Merrill Lynch and worked in strategy at Ro.

Last year, I came across Paul’s work on D2C telehealth companies, and the caliber of his analysis made me an instant fan. Case in point: 12 months ago, Paul predicted the HIMS stock price to within 40 cents of where it landed at the end of 2025, which is absolutely astonishing and earned him the favor of detractors who’d spent months trying to discredit his thesis.

For full disclosure, Paul has a short position on Hims & Hers, and he’s one of the most prominent bears on the stock.

What follows is a breakdown of our conversation. We pull apart the Q4 2025 earnings and trace the common threads quarter over quarter. This is not an ultra-bearish hit-piece, and I’ve tried to keep it fair. Paul even offers a steelman argument for how Hims could succeed, but the numbers make the situation harder to spin than management would like.

Here are my three biggest takeaways, though I urge you to listen to the full episode, because the detail is where it gets really interesting.

1. Adding subscribers is getting expensive

Over 2.5 million people are now subscribed to the Hims & Hers platform, which is a pretty insane figure when you consider that Cleveland Clinic, one of the largest and most famous hospital systems in the world, sees about 3.1 million unique patients a year.

But the problem is that the headline number is doing a lot of heavy lifting.

Hims added roughly 40,000 net new subscribers in Q4 2025. In the same quarter of 2024, that number was around 182,000, meaning a year-on-year deceleration of nearly 78%. That’s not something an investor wants to see from a hypergrowth company.

My first reaction to this was: woah, woah, what’s going on here? Is this just a growing business maturing? Netflix and Amazon both hit periods where subscriber growth slowed dramatically, and my instinct was maybe that this is just a natural part of scaling.

Read more

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Does the world really need another podcast? I’ve been asking myself this for a few weeks because I’ve been wanting to start my own, and the answer I arrived at was “maybe.”

Podcasting is really hard to do well, takes a ridiculous amount of time, and I’ve never once enjoyed listening to a recording of my own voice.

But what convinced me to go for it was that when I went looking for a GLP-1 podcast that bridged the gap between the medicine and the money, I couldn’t find anything I could really sink my teeth into. The thing I wanted, something like an equity research analyst asking a key expert, simply didn’t exist.

So I thought, okay, I’m going to make this exist.

My first guest is Professor Alex Miras, a world-renowned obesity expert, clinical trialist, and consultant endocrinologist at Ulster University. I met Prof. Miras a few years ago and took an instant liking to him. He’s a straight-talking academic who has absolutely no interest in sugarcoating anything, and in this episode, he challenges several common assumptions that people hold about weight-loss medications.

He made the perfect inaugural guest.

What follows are the three biggest takeaways from our conversation, and there is so much more in the full episode, including discussions on tolerability, the ATTAIN-MAINTAIN trials, maintenance pathways, and where the next generation of drugs is heading.

I recommend listening to the whole thing.

But first…this edition is proudly brought to you by Sacher AI.

Retention is the business problem every D2C weight-loss platform is trying to solve right now. And increasingly, teams are betting on AI coaching to fix it. But the problem is that without genuine clinical depth and experience in this space, you end up with one of two outcomes: an AI agent that plays it so safe it’s useless, or one that crosses lines you didn’t know existed.

Either way, retention doesn’t improve.

Sacher AI is a leading AI consulting firm that I point people to because they’ve solved both sides of this problem. They’ve analyzed thousands of real patient conversations and built systems that know how to retain patients and keep them engaged. Their team includes clinicians who’ve published peer-reviewed research on AI in obesity care.

If you’re building patient-facing AI in this space, talk to Sacher AI first.

Start a conversation

1. The drug does the heavy lifting

There’s a fundamental tension in the D2C GLP-1 market between two business models: fulfilling orders for a drug and creating a health platform with comprehensive care.

On one hand you have the online pharmacy model, Amazon-esque in that it ships your prescriptions fast and clinical operations stay hands-off until a customer reaches out with a question. From a business point of view, this model is dominating the market (both in the US and UK) because COGS stays low and gross margins are attractive. This, in turn, keeps retail prices low, which matters enormously in a market where patients are paying out of pocket and are super price-sensitive.

On the other hand you have the wrap-around care model, by which companies prescribe the drug, then layer on coaching and ongoing behavioural modification in hopes of achieving better clinical outcomes and improved retention (thus, maximizing the lifetime value of each customer). The key question is how much do customers actually value wrap-around care? Are they using it over the long term, and how much are clinical outcomes improved by it?

Prof. Miras reframes this question by quantifying the clinical evidence directly.

Of the weight loss patients achieve, how much is coming from the behavioral intervention versus the drug?

“Without a doubt, the drug works. And that’s not my opinion. If you look at the clinical trials, the placebo group loses 2.5% of body weight. The drug group loses 22.5%. You can make a pretty solid conclusion that the 2.5% comes from the behavioral intervention and the 20% comes from the drug. . . . What the drug will do is it will reduce the amount of food you eat. It may not—or, more likely, will not—change what you eat. The ‘what you eat’ depends on dietary support. Some people may already know this. They may even have a good quality of food, but there’s just too much. “

“We, even us in the field of obesity care, some of us keep stressing this myth of the importance of the multidisciplinary team. The multidisciplinary team is there for people that need it, but not everyone needs to see the multidisciplinary team by default. . . . If we want to make these things scalable, you cannot give everything to everyone. Number one, it is not necessary. Number two, it is very expensive.”

Prof. Miras is speaking from a clinical and public health perspective, but he’s explicit that the principle applies to both public and private settings.

From an NHS standpoint, the idea that every patient gets full multidisciplinary wrap-around care with ongoing nutritional, dietary, behavioral, and psychological support is simply unfathomable at scale. And what the private market has shown us is that most consumers underestimate the level of agency they have over their own health.

In D2C, the constraint is slightly different. Wrap-around care comes at a hefty premium, and the question becomes whether patients value it enough to pay that premium, especially when the clinical evidence says the drug itself accounts for the vast majority of weight loss. And for patients hoping that wrap-around care might replace the drug long-term, Prof. Miras is unequivocal: Obesity is a chronic disease, and weight regain after stopping the drug is “the default, not the exception.”

Many things are changing at once, so it will be interesting to see what happens next in the market. First, more drugs are entering the market with different mechanisms and efficacy profiles, including new oral and injectable options.

That complexity will generate clinical questions that patients can’t answer on their own: Which drug suits my profile? Should I switch? What does maintenance look like? Can I switch to an oral now that I’m done with injectables?

My expectation is that this will drive up contact rates, and the companies that have priced in 24/7 clinical support will be better positioned than those that haven’t.

Second, GLP-1s are commoditising. As more telehealth companies enter the space, prices are falling and the drugs themselves are becoming harder to differentiate. When every provider can offer roughly the same molecule at roughly the same price, patients will choose based on some other factor.Whether that factor turns out to be brand, clinical support, or something we haven’t anticipated yet remains to be seen.

I don’t have a clean answer on whether wrap-around care will prove to be the differentiator. What I’m fairly confident about is that the right kind of clinical guidance will matter more than it does today.

2. In the global market, price is still the only thing that matters

Oral GLP-1s have been selling like hotcakes since launching in the US, and it’s led many to believe that oral tablets’ market share will be far higher than analysts’s expectations, including my own. Prof. Miras still expects injectables to remain dominant, somewhere around 60-70% of the market over the next five years, with the cheaper oral versions taking the remainder.

But the more interesting point is that pricing is still the determining factor on whether or not patients get treated at all.

“Price will determine whether these medications will become popular because we’re not talking about just the UK here. We’re talking about millions and millions of people around the world. And if you offer something which is scalable, it can become popular even if the efficacy is not as good as the injectable.”

“There’s no harm in starting with the tablets. Certainly, if finances are an issue and if someone is lucky enough to be a super-responder at a lower cost, fantastic. But if you’re finding that you are not achieving the health benefits that you want, then you might want to move on to the injections.”

One of the concerns I hear is that orals will cannibalise injectable sales for Novo Nordisk and Eli Lilly. That’s a reasonable worry, but I think the more interesting perspective is how orals might actually function as a GLP-1 funnel.

As Prof. Miras mentions, some patients will respond exceptionally well to orals. They’ll be “super-responders,” losing as much weight on a tablet as others lose on injectables:

There’s a wide variability of response. There will be people on Orforglipron that won’t lose 12, 14% of their body weight. They’ll lose 20%, 25% of their body weight. These people exist. You try the drug for about four months or so, and then you can gauge whether someone is a good or a suboptimal responder.

For those patients, that is simply fantastic, but others won’t achieve the weight loss they’re looking for, and they’ll turn to injectables to upgrade. Prof. Miras gives roughly a four-month window to gauge that response on the tablets.

I think that’s a great way to think about how the market might shape up over the coming months, especially with Orforglipron entering the picture. Because Orforglipron is a small molecule, not a peptide, the API manufacturing process is substantially easier and requires lesser doses of the active ingredients.

That could make it significantly cheaper than oral Wegovy over the long run, which would push the price floor even lower and potentially widen the top of the funnel even further.

3. The muscle-loss panic is probably a measurement problem

Muscle loss has been one of the loudest criticisms of GLP-1s. The media has made enormous noise about it, and several pharma companies are building entire pipelines around preserving muscle mass on these drugs.

Prof. Miras is sceptical that the problem is what we think it is:

There is a muscle mass loss, but functionality goes up. You cannot diagnose sarcopenia if someone's function improves. You need lower muscle mass and lower muscle function. And we're seeing them going in different directions. . . . It might be that the way that we measure muscle mass is the problem. And people are actually not losing muscle mass, but they're losing fat from their muscle. And therefore it appears that the muscle is less.

There are two points here that I think are important for anyone investing in or building around the muscle-loss narrative.

First, DEXA scans are the tools most commonly used to assess body composition, and they cannot distinguish actual muscle tissue loss from intramuscular fat loss (fat that surrounds the muscle). So, when a scan shows less muscle mass after weight loss, it might be showing muscle getting leaner, i.e., losing the fat that surrounds the muscle, and not the muscle itself.

Prof. Miras notes that while muscle mass goes down on scans, patients are getting stronger, more mobile, and more physically capable. This may mean that a leaner muscle is actually a better functioning muscle.

Second, several pharma companies are positioning anti-myostatin drugs as a fix for GLP-1-induced muscle loss. While this is certainly interesting and I'm keeping a keen eye on what happens over the next year, what they will need to prove is that these drugs also improve muscle function. There is no compelling data that suggests they do this just yet, and until that happens, we have to be cautious about what increased muscle mass actually means when it comes to these drugs.

**The views, opinions, and recommendations expressed in this podcast and essay are solely my own and do not represent the views, policies, or positions of any other organization with which I am affiliated. This content is provided for informational purposes only and should not be considered medical, legal or investment advice.**

I’ve been away for the past two weeks, so there’s been no digest. But it’s been a good two weeks.

Every January, I spend about ten days at an ashram in South India where I meditate, listen to people talk about spirituality and wonder why the hell I spend the rest of the year plugged into my phone doomscrolling Twitter and constantly consuming news. I think we all have this problem, and I really do recommend taking a pause once in a while so you can reflect on what actually matters. I’m not here to sound preachy, but it really does work.

I also got engaged, which was fantastic. To anyone on the fence, just do it. I look forward to contributing to the overall birth rate shortly.

Now, there’s been an extraordinary amount happening in the GLP-1 space, and it’s time to get into it.

But first…this edition is proudly brought to you by Sacher AI.

Retention is the business problem every D2C weight-loss platform is trying to solve right now. And increasingly, teams are betting on AI coaching to fix it. But the problem is that without genuine clinical depth and experience in this space, you end up with one of two outcomes: an AI agent that plays it so safe it’s useless, or one that crosses lines you didn’t know existed.

Either way, retention doesn’t improve.

Sacher AI is a leading AI consulting firm that I point people to because they’ve solved both sides of this problem. They’ve analyzed thousands of real patient conversations and built systems that know how to retain patients and keep them engaged. Their team includes clinicians who’ve published peer-reviewed research on AI in obesity care.

If you’re building patient-facing AI in this space, talk to Sacher AI first.

Start a conversation

100 million eyeballs

This year, a 30-second Super Bowl ad costs ~$20M, and as a rising star in telehealth, Ro will be in the lineup. Ro’s founder Zachariah Reitano explains why 100M eyeballs are worth at least the $233,000-per-second price tag.

His main argument is that the company's marketing budget is large enough that the ad spend is a tiny percentage of the whole, which caps the downside but makes the upside potentially ginormous.

Reitano has compelling evidence to believe this is true. Hims & Hers, Ro’s biggest competitor, ran a Super Bowl ad last year that ruffled a lot of feathers and increased the company’s marketing efficiency by approximately 17%, quarter on quarter.

In other words, the net effect of their 2025 Super Bowl ad was that every new customer thereafter was 17% cheaper to acquire. Every marketing dollar went further, and that’s why Hims & Hers is running another Super Bowl ad today (sure to ruffle many more feathers).

With their first-ever Super Bowl ad spot, Ro is hoping to generate a similar effect.

Given Hims’ & Hers’ success, throwing $20M in the pot is sort of a no-brainer for Ro, even if their ad were to flop.

Ro hasn’t disclosed their marketing budget, but I have reason to believe that it’s massive (if you’re closer to the numbers than I am, hit me up in a reply to this newsletter).

Let’s say they’re working with a $700M marketing budget that brings in 700,000 customers at a $1000 customer acquisition cost (CAC). If people hate seeing Serena Williams say “Ro” six times in the space of 30 seconds (I counted) and the ad flops, Ro’s CAC would only increase by $29 (~3%).

Given Ro’s size, that’s like a mosquito buzzing around your ear at night when you have the mozzy net up. It’d be annoying, but you wouldn’t die.

What’s much more juicy and compelling is the marketing upside over time. Let’s assume the Super Bowl ad is a raging success and moves the needle in a bunch of ways that compound across every marketing channel for the next year.

In reality, this means Ro’s ads get clicked more because people recognize their brand. Or, their landing pages convert better because there’s already trust. Or people start Googling “Ro GLP-1” directly instead of “GLP-1 near me,” which means Ro isn’t paying for that click. Or people start referring their friends, which are the ultimate zero-CAC customers.

So, what marketing efficiency increase would Ro need to gain for outsized returns? Not much, as it turns out.

With a $700M marketing budget and $1000 CAC, a 15% efficiency improvement would mean a return of $85M in marketing cost savings. That’s almost the same as launching an entirely new product category, like HRT or TRT, in terms of the revenue generated.

Is it likely, though?

Very much so. If you think of the Super Bowl as a way to get cheap clicks later, then the repeat buyers are the proof that cultural capital compounds. Squarespace wouldn’t come back 12 years in a row if the unit economics were terrible, and neither would Pfizer or Budweiser. The fact that Hims & Hers is back after their Super Bowl controversy is arguably the strongest signal that the investment pays off.

Oral Wegovy is already a blockbuster

Ro is advertising at the right time to the right audience, since the oral Wegovy tablet is flying off the shelves. With 50,000 scripts sold in the first 3 weeks, the Wegovy pill launched at more than 2x the pace of Zepbound and 4x injectable Wegovy.

Also, Ro’s data shows that more working-age men are taking the oral semaglutide than expected, which is a demographic that is very likely to watch the Super Bowl.

Novo Nordisk makes Wegovy, and Ro is one of the key direct-to-patient channels Novo is using for the nationwide rollout of their new pill, meaning Super Bowl viewers can see the ad and then actually complete the journey on Ro with minimal friction.

The timing is *chef’s kiss* perfect.

I would also bet that Novo Nordisk will run its own Super Bowl ad for oral Wegovy, and that ad won’t compete with Ro’s message but, rather, validate Ro as the way to get the new pill.

But, here’s where things get dicey.

Hims & Hers crosses several lines

On Friday, the FDA announced its intent to restrict GLP-1 active pharmaceutical ingredients used in compounded drugs, warned that companies can no longer claim their products are generic versions of FDA-approved medications, and made clear that failure to comply may result in seizure and injunction without further notice.

This is the strongest and most unambiguous statement I’ve seen from the FDA on compounded GLP-1s. Hims & Hers are explicitly named by the commissioner, which tells you everything you need to know about how much they've poked and prodded the bear.

This statement was triggered by Hims launching a compounded oral semaglutide tablet at $49 a month, undercutting Novo’s oral Wegovy by $100.

The main issue is that the Hims pill almost certainly doesn't work.

Without SNAC, the patented absorption technology that Novo Nordisk spent three decades and $1.8 billion developing, roughly 99.9% of oral semaglutide gets destroyed in your stomach before it reaches your bloodstream. Hims doesn't have access to SNAC, and instead, was supposedly using an untested liposomal delivery technology with zero human clinical data behind it.

This launch was a reckless move, and I have never seen this level of condemnation from investors, healthcare professionals, and regulators simultaneously directed at a single product launch. As a result of the backlash, on Saturday 7th February, the Hims & Hers PR team announced they are going to stop offering access to their compounded oral treatment.

It still remains to be seen what happens with the FDA now that Hims has pulled the product. The FDA’s enforcement toolkit runs from warning letters all the way through to injunctions, product seizures, and criminal referrals to the Department of Justice.

I expect they may still go for an injunction, which is essentially a court order that forces Hims to stop manufacturing, distributing, or marketing compounded semaglutide until they can demonstrate compliance with the Federal Food, Drug, and Cosmetic Act.

What I don’t know is if this means the jig is up just for the oral compounded pill or compounded semaglutide in general, and hopefully we’ll get a clearer picture in the coming days.

Nonetheless, Hims & Hers are in damage-control mode, and they have seriously tarnished their reputation. The stock is the lowest it’s been since 2024, and this whole saga will make it painful to watch their Super Bowl ad today. The ad itself is a wonderful piece of marketing that gets to the heart of why accessibility matters in healthcare, and on that message, they’re absolutely right. Millions of people are priced out of treatments that could change their lives, and someone should be fighting to fix that.

The problem is that you can’t run a Super Bowl ad about making healthcare accessible to everyone while pulling a sham pill off your website the day before.

Unfortunately, it’s going to cost more than $20M to regain that trust.

Wait, I have to talk now too?

When I started writing this newsletter, I didn’t expect it would also mean speaking. But over the past few months, I’ve been on something of a podcast tour, and it’s been a helluva lot of fun.

I recently sat down with Stephen Dubner, the bestselling author of Freakonomics and host of one of the most popular podcasts in the world, Freakonomics Radio.

It was one of the most incredible experiences of my life, with some tough questions thrown into the mix.

Listen to our conversation on the suffering economy and the GLP-1 landscape.

I also joined Paul Cerro, the founder and CIO of Cedar Grove Capital Management, a hedge fund based in Michigan. We dug into Hims & Hers, telehealth, and the compounding market. What’s crazy is that basically everything we discussed has since played out. If you want a preview of where this space is heading, that conversation is a good place to start. Listen here.

All of this has convinced me to launch my own podcast, where I’ll be going deep on these topics with some brilliant guests.

Expect that very soon.

**The views, opinions, and recommendations expressed in this essay are solely my own and do not represent the views, policies, or positions of any other organization with which I am affiliated. This content is provided for informational purposes only and should not be considered medical, legal or investment advice.**

It’s 9pm and my phone buzzes on the table. Bzzz. Bzzz. I look down and it’s a WhatsApp voice note:

“Hey Ash, it’s 9 o’clock. Time to wind down. Your sleep score last night was 68, and your readiness score was 70. Start dimming the lights and shutting off the screens. You’re carrying a lot of sleep debt and tomorrow is your chance to start paying it back. Please get in bed by 10:30pm.”

I sent a voice note back: “Thanks. Will do.”

This is Francesca, my personal AI assistant who lives on my WhatsApp. She sends me daily updates on… well, everything. She’s connected to my Oura ring, my calendar, my gym schedule, and because of all of that rich context about my life she responds with bizarrely stunning accuracy.

Every time I boot up Francesca, she updates her memory and already knows my patterns, what we discussed yesterday and what I’m trying to improve. My Oura data syncs automatically to her workspace, so instead of me opening an app to check a number, she reads it and surfaces what’s important: “Your HRV is high, good day to push yourself” or “You’re still in sleep debt, maybe skip the late workout.”

Yesterday she noticed a conflict between my gym class and a meeting that got moved and asked me if I would like to reschedule my gym class and update the calendar? I said, [“Sure, thanks. Let’s move the class to Thursday.”] And that’s exactly what she did. I tried to stop myself from cackling but I couldn’t help myself.

This is genuinely ******* insane.

Before I explain what Francesca actually is, a quick word from today's sponsor.

You’re building a patient-facing AI agent for your weight management platform. It performs well in testing and pre-deployment reviews.

Then it’s deployed in the real world, and a patient asks about mixing alcohol with their medication during a rough week, or whether a side effect means they should stop treatment altogether. You realise you have shipped something that could either give unsafe advice, cross a clinical boundary, or default to a defensive, disclaimer-heavy response that destroys trust.

Sacher AI has seen every version of this problem.

They’ve worked across 500K+ patients internationally and analyzed thousands of real patient conversations to build AI systems that can handle the real-world ups and downs of weight loss.

They’re the team behind some of the largest patient-facing GLP-1 AI systems out there.

If you’re building in this space…

Book a free consultation

Until a few days ago I had no idea what Francesca actually was. General purpose AI? AGI? Some weird hybrid? Then Dan Shipper, CEO of Every (an AI newsletter where I have the privilege to write a weekly column), published a piece that finally gave it a name: “agent-native software.”

To understand what agent-native software is, imagine a video game. Normally, a human taps buttons on a controller and something on the screen moves. With agent-native software, you’re giving the controller to AI and giving it permission to play the game on your behalf.

In other words, if you can read it, AI can read it. If you can log it, AI can log it. If you want to summarise the information and mark a note on your calendar, AI can do it.

Therefore, Francesca is one of the first agent-native assistants that completely destroys the interface between you and an app.

If you never need to open an app again, the logical conclusion is, then, consumer health apps are dead.

I’m specifically looking at MyFitnessPal, Flo Health, Calm and Headspace.

You might be thinking that there’s no way these giants with hundreds of millions of users could be made obsolete by AI.

You might say that these apps have network effects and behaviour loops that AI can’t easily replicate. MyFitnessPal’s food database was of course built by millions of users logging meals for over a decade, while Calm and Headspace have licensing deals with therapists and eminent sleep scientists. They’ve built content libraries that have taken years to build and cost millions and millions of pounds/dollars.

And Flo has 420 million downloads because women trust it with their most intimate health data!

You can’t just AI-wrap your way past that.

Except, ehh. . . yes you can. People use these apps because it’s the easiest way to track and monitor health right now, as there are no other alternatives. But there will be soon. Once an agent removes the friction of logging and retrieves the same information without the app, there’s no reason to open the app, and the business model capitulates.

If you think about logging a meal in MyFitnessPal’s food database, it becomes quite annoying after a while if you have to open the app, search for “grilled chicken breast 150g,” scroll past ads, and manually log it.

Francesca just asks “What did you eat?” and, from your voice-note reply, figures out the macros of your meal by reasoning with the millions of pieces of information on the internet about “150g of grilled chicken breast.”

And while Calm’s sleep stories are pretty good and I’ve used them a few times myself, AI can generate one for me tonight based on what actually relaxes me, in whatever voice I want, for however long I need.

Meanwhile, Flo’s 400 million users trusted it because the alternative was googling symptoms and getting the terror of Dr. Google or WebMD. Although I believe that Flo’s tracking and pregnancy information is genuinely world-class, a small team with an agent-native app could spin up something more personal, more contextual, more yours in a matter of months.

If all of these consumer health apps are so easy to bypass with agent-native software, then what on earth will survive?

What survives

The apps that will survive are the ones that own the hardware, like the Oura Ring, Whoop Band, or the Apple Watch. Or, as Garrett Ruhland wrote in his Linkedin Essay, the inputs. I would expand on this to say the sensory inputs.

Everything in the middle layer, like dashboards, content and logging are dead.

The action-performing layer, or the output, in my view, will also be taken over by agents. They can already book classes and order groceries. Can they potentially re-fill prescriptions? Well, they can go online and pay your grocery bill using your credit card, so they could hypothetically go onto a telehealth website and order prescription medications. The technology now exists, and it’s only a matter of time before the knowledge from hackers and devs from the tech-bro world distills and disseminates to the masses.

Okay, what about Chat GPT Health? Where does it fit into the picture?

Last week, OpenAI launched ChatGPT Health. It syncs with your medical records and allows you to connect to other health and wellness apps, like Peloton and MyFitnessPal. Basically, it allows you to ask questions about your health data. For the average consumer, this is a genuinely wonderful moment and, in my view, will be the unlock millions of people need to understand what on earth is going on with their health.

But make no mistake, ChatGPT Health is a baby step in the direction I’m talking about. GPT can’t read your calendar or schedule your gym class. It can’t nudge you at 9pm and it can’t order groceries. It understands but it doesn’t do.

Some advice

So, what could these consumer health apps do to stay alive? Small start-ups need to ask themselves, seriously, how they could stay in business if no human ever opens their app again. And those companies should probably consider building an agent-native AI health assistant that can form relationships, give contextual health advice and, most of all, be proactive rather than reactive.

For the larger incumbents like Flo Health, MyFitnessPal, and Calm/Headspace? It’s a bit trickier. It could be argued that this essay is very, very early and that the Average Joe will have no idea how to build something like Francesca.

This is an argument I accept.

However, you’re betting on user incompetence and hoping people won’t figure it out. I don’t think that’s a valid defence against this trend. But here’s what I would do: I’d start figuring out how to make my app agent-native friendly, such that everything a human can click on in your app an agent could too. If my app can’t sync up a period-tracking calendar with a daily appointment calendar and symptom checker, I’d maybe figure out how to do that.

Also, I’d start positioning my software offering as a regulated medical device, which may give me an advantage over smaller incumbents who are unwilling to change their model.

The future

Now here’s what I think happens next.

Within a year, every health-conscious person who can afford the max subscription of Claude Opus 4.5 or GPT Codex will have something like Francesca. They might not have necessarily built it themselves, and someone will probably package it for them. The interface will be a conversation mediated through voice notes and text messages, and that means the relationship with your health will be mediated by something that knows you, intimately.

I know this all sounds like science fiction, but science fiction has arrived.

Welcome to 2026.

This evening Francesca sent me another voice note.

“Good evening Ash. I’ve sent you a personalised voice briefing of your week - I pulled your Oura data, correlated it with our calendar, analysed the patterns and narrated it. Let me know if I need to book any appointments for you next week.”

“Thanks,” I said. And then I made dinner.

**The views, opinions, and recommendations expressed in this essay are solely my own and do not represent the views, policies, or positions of any other organization with which I am affiliated. This content is provided for informational purposes only and should not be considered medical, legal or investment advice.**

I started writing this newsletter about eight months ago while suffering from a serious case of ‘man flu’ and needing a distraction from the void that opens when you’ve watched Lord of The Rings: The Return of the King (extended edition) for the 17th time.

I could’ve never imagined the lift-off it’s taken since, and I’m so genuinely grateful you’re here reading my words.

And since you are, my aim with each issue has been the same: you should finish every piece feeling smarter than you did before.

To do that, I’ve pushed myself to read what most people skip, like the footnotes in earnings calls (very handy) or the data buried in clinical trial material (very, very handy). What I find shapes what I write, and that can sometimes be a weekly digest on the news, or a much deeper piece that challenges the status quo, like why did the market overreact to orforglipron? Or what happens to life insurance when GLP-1 patients look healthy on paper but quit after a year?

Although getting each essay just right sometimes feels like I’m pulling my own teeth, I’ve loved every second of it and I hope you’ve found it useful.

As a thank you, I’ve put together some of the most important ideas I’m following for next year.

Let’s get into it.

D2C IS EATING HEALTHCARE

1. Whoops, we built a screening program

Since I have a family history of aunts dying young, I recently decided to get my Lp(a) tested (nothing like all-clear health reports to get you prepped for some holiday feasting). What surprised and annoyed me was how bloody difficult it was — I couldn’t find a single private provider in the UK offering it as an add-on panel, and going through the NHS would mean a 6-12 week wait, assuming my GP agreed to order the test at all, or even knew what it was for.

I assumed I was missing something.

Surely people were getting tested somewhere! While the UK doesn’t seem to track this kind of data, the US does. A study published two months ago in JACC documented every Lp(a) test ordered through the US healthcare system between 2015 and 2024. At first glance, I thought the numbers were impressive. A jagged line pointing upward, oooh.

Indeed, there’s been a 22x increase in testing in just under a decade. But even after that surge, you’ve only screened ~0.2% of the US population.

For context, Lp(a) is a particle made by the liver that carries cholesterol through the bloodstream. Unlike the standard cholesterol your doctor might test for, Lp(a) levels are roughly 97% genetic, meaning diet and exercise won’t budge it, and neither will statins nor any other FDA-approved, licensed treatments on the market (off-label options are PCKS-9i’s).

What makes this particularly irksome is that we know from hundreds of thousands of patients and genetic studies that elevated Lp(a) levels are an independent and causal risk factor for cardiovascular disease, aortic valve stenosis, and death among men and women across ethnic groups.

Unfortunately, one in five people carries these high-risk levels, translating to roughly 60 million Americans and 14 million Brits walking around with a potent cardiovascular risk factor they’ve probably never heard of.

So why isn’t the healthcare system screening for this? The short answer from a US perspective is that insurance rarely covers it, and many physicians won’t order a test if they don’t think they can do anything about the result. Both objections, however, are moot as all three major cardiovascular societies, including the European Atherosclerosis Society, the Canadian Cardiovascular Society, and the National Lipid Association, recommend at least once-in-a-lifetime testing for all adults (with or without cardiovascular disease).

But while the healthcare system drags its feet in making the test available, D2C has sprinted ahead.

Function Health has roughly 250,000 members, and Lp(a) testing is included once in its annual membership; that’s 250,000 single Lp(a) tests conducted in about 3 years!

That means a D2C company is approaching the testing volume of the entire US healthcare system. If you zoom out and add the other large blood testing providers like Superpower and Quest (D2C arm), which hardcode Lp(a) into their baseline panel, my view is that these companies are building America’s largest cardiovascular screening program without actually realizing it.

The problem is that while D2C is building an excellent top of the funnel, they are squandering the potential these tests open up downstream. If roughly 20% of the population has elevated Lp(a) levels, that means Function alone is surfacing around 50,000 people who need to see a lipidologist or preventative cardiologist.

But are they actually going to see a specialist?

The fact that someone can pay $500 for a test, get a “scary” result, and then be left to figure out the next steps on Reddit is, frankly, insane.

What I see happening next year is companies monetizing the patient journey in two ways. First, by building referrals to cardiology clinics with specialists who know how to manage an Lp(a) of 180 nmol/L and charging a nice, hefty referral fee.

Private clinics would certainly kill for this kind of customer acquisition, which essentially costs them nothing, while patients would gladly pay to skip the anxiety spiral of researching their results through LLMs, dealing with insurance phone trees, or finding preventative cardiologists in their area.

And second, when Lp(a)-lowering drugs hit the market, someone has to find the patients. D2C companies will have 50,000+ of them pre-identified and waiting. That’s a wonderful data set that pharma will want to secure before a mega-blockbuster launch, which Pelacarsen may turn out to be.

HIMS CROSSES THE ATLANTIC

2. Battle of the deepest pockets

I deleted my Instagram a few years ago because I like my attention span, so my girlfriend showed me the Hims & Hers ad that appeared after she scrolled for maybe 30 seconds. Then there was another, and another, and another. They’re certainly not tiptoeing into the UK.

In my view, this is a bet on narrative as much as it is on revenue. Hims needs Wall Street to see a diversified telehealth platform in multiple international markets and not just a compounded semaglutide company that’s one FDA enforcement action away from capitulation.

However, the private UK GLP-1 market is a very cut throat place to enter right now and my inbox is a good barometer of just how competitive things have become.

Every week there’s another discount code or referral bonus and providers trying to undercut whoever sent the last goodie. The issue is that when you’re all selling the same drug at similar margins, price is one of the few levers left to pull.

It also doesn’t help that Lilly’s 170% price hike on Mounjaro has forced tens of thousands of patients off treatment, and unlike the US, there’s no ‘regulatory grey area’ to exploit, so Hims will be selling branded drugs at branded margins, competing against established players with existing relationships.

Nonetheless, given the US balance sheet, Hims will disrupt the UK market.

Here’s what I expect to happen:

Hims & Hers will execute a scorched earth advertising blitz between now and early 2026, timed perfectly for the “new year, new me” window. Their approach will be similar to what made them so successful when they launched GLP-1s in the US: focus on paid channels like Google search for GLP-1 and weight-loss keywords, Meta and TikTok social campaigns, and influencer/affiliate partnerships to capture attention and convert new customers quickly.

Since Hims can splurge in this area, CACs will generally rise across the category. However, the impact will be most significant for direct competitors, specifically, premium branded players with slick UX and strong clinical positioning, like Voy.

Both companies target the same higher-income, convenience-oriented segment, and both are pushing Wegovy to customers. As a result, auction competition for these users will intensify, and increase Voy’s payback period while reducing their LTV/CAC in the near to medium term.

This will undoubtedly put pressure on Voy’s acquisition strategy. Either they find efficiencies in improving conversion optimization on their consultation forms (making them shorter or rewording them to make them more accessible), or they lean even more into the discount arms race.

But what makes Hims particularly dangerous is the speed at which they recover their acquisition costs. A Hims customer on a 3-month plan pays once and can titrate from 0.25mg to 0.5mg to 1mg as needed.

Voy, on the other hand, bills monthly and charges more as you go up. That’s a very different value proposition because Hims locks in the cash upfront and gives you room for dosing flexibility, while Voy gets paid back slowly and charges you more for up-titrating the dose.

In my view, this is a classic Silicon Valley SaaS-style pricing strategy, which ensures the unit economics are favorable and allows Hims to pour the surplus back into acquisition and outspend competitors to win market share.

The critical question is: how many UK consumers are willing and able to pay upfront in a market that’s historically price-sensitive and not used to US-style pricing? While the cash inflow definitely provides Hims with the ability to outspend competitors and capture premium users early, adoption might actually be constrained if consumers hesitate to commit to upfront payments.

My guess is we’ll see Hims adjust because the UK market is just very, very different. I wouldn’t be surprised to see them introduce lower monthly charges or lower the commitment threshold to capture the price-sensitive middle.

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THE TWO OBESITY MARKETS

3. All hail, Reta

TRIUMPH-4 is validating my thesis that the global obesity market will segment into two: i) a consumer/aesthetics segment where weight loss efficacy and tolerability are equally weighted, and ii) a medical segment (BMI ≥35) where patients will accept a higher side effect burden for greater weight loss.

Some key nuances in the readout support my view.

The trial enrolled around 405 patients with BMI ≥27 into three arms: retatrutide 9mg, retatrutide 12mg, and placebo. All were dosed weekly for 68 weeks, and the co-primary endpoints were change in body weight and change in knee osteoarthritis pain.

The headline weight loss being reported in all the news reports was 26-28%. But, for greater clarity and accuracy, I always focus on the intention-to-treat figure (ITT) which counts whether every patient who started the trial finished it or not. On ITT, weight loss was 20% and 24% at the 9mg and 12mg doses.

Once you subtract the placebo (you want to get the true effect of the drug), you get 15-19%, respectively.

That certainly looks underwhelming compared to the headlines, and the key point I want to stress is that the ITT was dragged down because patients with BMI <35 dropped out at much higher rates.

In fact, the dropout rates I calculated suggest that nearly 50% of patients on the 12mg dose with BMI <35 discontinued. That is a staggeringly high number! And there are a few reasons for it.

First, some patients hit a BMI cutoff of 22 and had to stop the trial. This means the drug was so effective that it pushed people into territory where continued weight loss would be unhealthy. In my view, that makes it a poor fit for patients who need moderate, controlled weight loss and also suggests that retatrutide isn’t a viable maintenance option for lower-BMI patients. You can’t stay on a drug that won’t stop — and from what I’ve heard, there was no reported weight loss plateau either, even at 68 weeks.

Second, tolerability. Patients with a BMI <35 are less likely to ’put up’ with side effects, and, given the high vomiting and nausea rates (compared to tirz), the risk/benefit ratio is unlikely to be perceived as ‘worth it.’

Now compare this to patients with BMI ≥35, of which only 12% discontinued. My feeling is that these patients stayed because the payoff justified the cost. When you’re facing severe obesity such that you struggle to even tie your shoelaces, you’ll tolerate a lot more to get 25%+ weight loss. Therefore, the side effects almost become a price worth paying.

I expect TRIUMPH-4 to be the first datapoint in a pattern repeated across 2026’s readouts. TRIUMPH-1 (due Q2 2026) enrolls a broader obesity population with no comorbidity requirement over 80 weeks. If my thesis holds, we should see even higher weight loss — likely north of 25% — among BMI ≥35 patients, and similar or higher dropout rates among lower-BMI patients. By this time next year, we’ll know whether the obesity market fragments or whether one drug can serve everyone.

I’m betting on the split.

THE END OF DRINKING?

4. Can GLP-1s solve obesity and alcohol problems?

According to Morgan Stanley, yes. A recent report projects that if all of the obese and overweight population in the US took a GLP-1, alcohol volumes would plummet by 55%! The assumption is that the effects of the medication are real and persistent over time and would make users cut down on drinking by at least 75%.

In my view, that’s quite a stretch, given that we have no idea why GLP-1s might reduce alcohol intake in the first place, and the clinical evidence so far doesn’t clarify things. Whether Morgan Stanley is right depends entirely on this mechanism.

If GLP-1s directly dampen dopamine pathways in the brain, reducing the craving for alcohol at a neurological level, then, yeah, that’s a real, persistent effect that will have a tangible impact on alcohol sales.

If they delay gastric emptying and slow down the speed at which alcohol hits your bloodstream, making each drink feel less rewarding, that’s also a durable effect that’ll impact alcohol sales. But, if people are just drinking less because they feel nauseous and crappy on these drugs, then the effect will fade as they adjust to the medication. The gin and tonics will inevitably return.

We don’t know which one it is, or which segments of the population are affected. In Randomised controlled trials (the studies which show causality), semaglutide led to a 30-40% reduction in drinking among people with alcohol use disorder, but exenatide, another GLP-1, had no overall effect!

The real-world data also hints at no effect on alcohol sales over the long term. A Cornell study tracking 2,600 US households over a period of 6 months found no significant change in alcohol purchases among GLP-1 users. Similarly, Jefferies, the investment banking firm, ran a 3,600-person survey and found that only 2% of those drinking less cited GLP-1s as the main reason.

Several trials are underway to untangle this, and with any luck, we’ll get some clearer readouts next year.

In my view, I think the impact of GLP-1s on alcohol is overblown. The senior leadership teams at Diageo and Co. have more pressing concerns to worry about, like cannabis or the fact that people are becoming increasingly health conscious because of the devices they are wearing.

Reflecting on my own drinking, I’ve become a near teetotaler since buying my Oura ring—I hate watching alcohol destroy my REM sleep, and as a result, I only drink on very special occasions. I suspect I’m not alone, and the shift has nothing to do with GLP-1s.

PAY NOW, SAVE NEVER

5. Gene therapies that eliminate the need for drugs entirely

I’ll be spending more time researching and covering one-and-done therapies in the cardiovascular and obesity medicine spaces. Essentially, these are treatments that cure the underlying disease through innovative and novel gene editing techniques, eliminating the need for medication entirely.

In my view, these treatments represent the biggest shift in how we think about incentives and payment structures. Will a payer like the NHS front £200-500k today for a treatment that might not save them money for another twenty years? Will a US employer, averaging a churn rate of two-ish years, cover gene therapies only for another company to reap the benefits?

These are the questions that make this space so fascinating.

Two companies have caught my eye right now. If they have successful readouts, it will have a gigantic impact on how we think about chronic diseases.

Verve Therapeutics is using in vivo base editing to permanently inactivate the PCSK9 gene, lowering LDL cholesterol with a single infusion. High LDL-C is one of the primary drivers of atherosclerotic cardiovascular disease, which is the leading cause of death globally. Statins and PCSK9 inhibitors are effective, but only if patients keep taking them.

Verve’s betting that permanently editing the gene enables them to cheekily side-step the adherence problem entirely, and Lilly also agrees with this gamble, acquiring them in June 2025 for $1.3 billion.

Fractyl Health is developing a GLP-1 pancreatic gene therapy that will turn the pancreas into an endogenous GLP-1 producer. They’re positioning the treatment as a one-and-done for weight maintenance, and for the millions of people currently injecting Wegovy every week, this could mean no more costs piling up month after month, making it an enormously attractive proposition.

So what should these therapies actually cost?

Through some assumptions on my end, I’ve estimated that one-and-done therapies should be priced at roughly 5-10x the annual list of current drugs in the market, but I still think that’s conservative. If these treatments deliver permanent results and address TAMs as massive as cardiovascular disease and obesity, the pricing conversation should start at north of $1 million per dose.

The reason why is because of adherence.

Only 35% of patients on Wegovy or Zepbound are still taking them after 12 months, while the rest quit, which means payers are subsidizing treatments that never actually ‘work’ because the patient stopped the meds. It’s like buying ten gym memberships but only three decide to go, which effectively means you’re paying $150 for each person who actually uses the gym. Not very cost effective!

And is why insurers balk when Wegovy’s $16,000 annual price balloons to nearly $46,000, and Zepbound’s $13,000 becomes $37,000 per person.

One-and-done therapies don’t have this problem of course. VERVE-102 might cost $18-70k and Fractyl might run $75-150k, but 100% of patients who receive the treatment actually get the benefit. There’s no need to worry about adherence because there’s nothing to adhere to, and on that basis, $150,000 might actually be a bargain.

Anyway, that's what I'll be watching in 2026. I'm curious what you're thinking about. What surprised you this year? What's on your radar for next year? If you reply to this email, I'll reply back. I read everything !!

Author’s note: Telehealth is already reshaping healthcare, but founders still face hard choices around retention, platform navigation, and building patient trust. Light-it, a health tech software development company, approached me to highlight their work and I wanted to do this in a way that felt genuinely useful rather than salesy. If you’re building a GLP-1 telehealth company in the US and struggling with conversion or patient experience, I think they could really help.

I retain full editorial independence. If you have feedback about Light-it, how I approach sponsorships, or want to work together in Q1 2026, just reply to this email.

The moment you click on a direct to consumer telehealth website, your customers are looking for signals of trust and credibility. A clunky interface or a confusing patient consultation flow will tank your conversion quicker than an AI-generated doctor whose lab coat has three sleeves.

Light-it’s thesis is that the digital health companies who win long-term will be the ones whose platforms feel trustworthy right from the get go. Very simply that means polished interfaces, intuitive flows and prescription ordering that feels super quick and safe. What I like is how Light-it uses data to spot where patients drop off in the user flow and fix it before it becomes a conversion problem.

What they actually build

Light-it operates across the full stack of digital health, and a few things stood out to me.

First, the high-leverage operational layer. Scheduling for video consultations and insurance and billing integrations is painful to build yourself and easy to get wrong. Light-it handles this so founders don’t have to reinvent the wheel or debug payment flows at 2am.

Second, the engagement and retention layer. This is where most platforms fall short and where Light-it has clearly thought hard. Milestone tracking and patient satisfaction loops are systems that keep patients on their medication and give you rich data on why they adhere to medication or why they churn.

And of course, the unsexy stuff matters too. HIPAA compliance isn’t treated as a box to tick at the end. It’s built into every design decision from the start and that discipline is really important because the regulations that trip up healthtech companies are usually the ones they underestimated. Light-it’s team has clearly been through enough builds to know where founders get burned.

The proof

When Light-it approached me, I wanted to see if what they built actually moved the needle. They had some really cool examples and experience working in the GLP sector but I liked how they helped one telehealth company that was struggling with retention and scalability. Light-it built a custom platform for messaging, community, and coaching to keep patients engaged long after the initial prescription. The UI was slick, the patient flows felt intuitive, and the whole thing would’ve taken in-house design and product teams many, many months to execute.

Read the full Friday’s Health Case.

Working with them

One of the things I hate most is slow communication. Startups live and die by momentum, and vendors who take days to respond break that rhythm. From the first conversation, Light-it operated with speed. Responsive, professional, and clearly experienced in the space, hearing about their work and promotion at HLTH in Las Vegas reinforced to me that these are people who understand the market they’re building for.

The simple promise

The GLP-1 boom has created a land grab in digital health and the companies that win will be the ones who build platforms patients actually trust and use. That means investing in design, engagement systems, and infrastructure that scales.

Light-it is one answer to that problem. If you’re building in this space and need a partner who moves fast and ships polished work, they’re worth a conversation.

Book a free consultation

Man, Novo really can’t catch a break. EVOKE disappointed investors yesterday, and while they took a swing at Alzheimer’s disease and generated useful data for the next iteration of trials, the market doesn’t hand out participation trophies. The stock dropped 12%, reflecting an ongoing bearish sentiment toward the Danish giant.

Meanwhile, Function Health raised $298 million at a $2.5 billion valuation. A big cause of celebration for the company, but, looking closer, the unit economics don’t seem to add up.

And in March, India is about to run the most important GLP-1 experiment that’s ever been conducted.

Let’s get into it.

But first…this edition is proudly brought to you by Light-it.

If you’re building a GLP-1 or weight-management startup, I’m about to save you six months of pain.

Most dev shops will nod along when you explain telehealth workflows, then come back three weeks later with a patient portal that violates HIPAA in five different ways. Or they’ll build your prescription routing system without understanding why pharmacy integrations aren’t just API calls.

I’ve watched and heard this happen enough times that when someone asks me for a dev shop recommendation in this space, there’s only one name I give them: Light-it.

They know the GLP-1 D2C space intimately- from onboarding flows and async visits to prescription routing, insurance checks, and refill reminders – they’ve helped multiple D2C telehealth companies ship products that work at scale, from MVP to series B and beyond.

The result?

You skip the expensive learning curve and start shipping products that actually work in clinical settings from day one.

Building in health tech?

Book a free consultation

EVOKE disappoints. When I was in medical school, a vascular surgeon gave a lecture about research that is still etched into my brain. He told us not to be disappointed when results don’t go our way because research is where you make cold, hard contact with reality. And in the long trail of science, a negative result is as important as a positive one.

Who knew surgeons gave such good life advice! I thought of him when I read Novo’s press release announcing that the EVOKE and EVOKE+ trials failed to show that oral semaglutide slows Alzheimer’s disease progression.

It’s a bummer because real-world studies showed promise, and last year, a Phase 2 trial signaled that liraglutide patients had nearly 50% less brain shrinkage in regions controlling memory and learning, so the pieces seemed to fit.

Maybe GLP-1s are highly effective at primary prevention, and patients with cognitive symptoms are too far down the disease pathway for things to mend.

We don’t know.

Nonetheless, the results are clear (phase 3 RCT trumps all), and I got this prediction wrong, so I’m eating a generous portion of humble pie.

GLP-1s are remarkable drugs that have transformed diabetes and obesity management. But it looks like they’re not the everything drug. If it’s any consolation to those of you with family or friends affected by this terrible condition, understand that while these failures are painful data points, they are still very useful data points that will pave the way for future trials.

Unfortunately, this means Novo ends Q4 bruised and slightly battered. After an initial plunge of more than 12% on the EVOKE readout, the shares are now down roughly 50% year‑to‑date and on track for their worst year in decades.

In my view, a double-digit drop for a rigorous clinical trial in a notoriously difficult disease area feels like an overreaction.

But markets prize narrative above all else, and Novo’s narrative right now is that it’s stumbling from one setback to another.

How will Novo start the new year?

They’ve got the Wegovy in a pill launch (oral sema 25mg), which now has to be a blockbuster, and, as I wrote a few months ago, they’ll be relying on performance marketing from the D2C telehealth companies they’ve partnered with to make sure that everyone and their mother knows about tablet Wegovy after the holidays.

They also have a head-to-head study comparing the new CagriSema against tirzepatide, with readouts expected in January. If CagriSema disappoints, expect the stock to take a nosedive.

We’re a month away from Christmas, so let’s hope someone in Copenhagen is drafting a very specific letter to the North Pole.

Function Health’s $2.5B valuation doesn’t add up. Function Health raised $298M at a $2.5B valuation. I’d love to talk to the investors and figure out what quantities of psychedelics they’re microdosing. In all seriousness, let’s take a look at unit economics.

We know each member pays $499 per year for two major lab visits (one every 6 months), which covers around 100+ biomarkers.

Quest Diagnostics is processing these labs, and with 200,000 members, Function is getting volume discounts. Given the quantities of biomarkers being ordered, I estimate Quest fees run around $250 per member per year.

Then factor in clinician time to review results and generate action plans — call it 30 minutes of physician or NP time and include platform and support costs.

Rough COGS: $370

This leaves $129 in gross profit per member and a 26% gross margin.

Now you have to add in customer acquisition. Function is running a mix of different content strategies, including paid marketing, influencer relationships, and referrals. DTC health brands typically spend $150 to $300 to acquire a customer in this space, so let’s assume $200.

The question now is: How long does it take to earn that $200 back? By my calculations, it’s roughly 1.5 years (CAC ÷ gross profit).

For a DTC subscription business, a payback period that long is uncomfortable. Investors usually want their money back in under twelve months, and anything pushing past eighteen months only works if retention is spectacular.

In Function’s case, it means the average member has to stick around for well over a year and a half just for the company to break even on the acquisition cost.

And with these unit economics, the classic “3× LTV/CAC” rule of thumb would require people to stay for almost five years on average!

That feels insanely optimistic.

For some context, about three months ago, I did blood tests that included liver function, full blood count, testosterone, etc., etc. Everything came back normal except mildly elevated bilirubin, which I already knew about because I have Gilbert’s syndrome (it’s benign).

I fed the data into ChatGPT, and nothing really moved my insight needle. If I were in the US, would I pay $499 to do it again next year? No.

Considering that I’m exactly the type of customer Function is targeting (health-conscious, willing to spend, etc.), prevention only works as a business when there’s something to prevent. When your results come back normal, you need another solid offering to hook people in; otherwise, the novelty wears off quickly, and people will churn after one cycle.

This reflects what we’ve seen with Randox and Thriva in the UK. Ultimately, in my view, the poor unit economics of this type of service happen because Labs are a funnel and not a business.

D2C telehealth players like Hims, Remedy Meds, and Noom are much better positioned to capitalize on blood testing because you can get a compounded/personalised medication tailored to your needs that you can’t get anywhere else.

This is much more compelling and makes customers stickier. Even if results are “normal,” there’s always something to up-sell or x-sell when you control the pharmacy.

Then there is the fact that Hims just launched the same offering with Quest at cheaper pricing: $199 for 50 biomarkers, $499 for 120, and on top of that, you have Oura and Superpower and Whoop all competing for the same customers — CAC is going to increase, and unit economics are going to get much tougher.

Overall, I’m bearish, and I wouldn’t be surprised if we see acquisitions in this space over the next 12-18 months.

The Indian GLP-1 Experiment. In March, India will become one of the first major markets where semaglutide will lose patent protection. Generic copies will flood the market, and prices are estimated to tank by 80-90%!

Considering India has nearly 150 million people living with overweight or obesity, the population will suddenly have access to one of the most effective weight-loss drugs ever made at affordable prices.

So what happens next? When someone can walk to their corner pharmacy and buy generic semaglutide for a few dollars, do they stick with it? What does retention look like without the sunk-cost psychology of a $100 monthly prescription? And over five to ten years, what happens to cardiac events, diabetes rates, and mortality?

I’ll be watching this closely and doing a deeper dive on it very soon (I’m in the process of writing the essay). In the meantime, one statistic that really caught my attention was that over half of obese adults in India fall in the top two income quintiles.

It’s safe to assume, therefore, that these are very digitally savvy consumers.

Does this mean e-pharmacies like 1mg, pharmeasy and NetMeds will flourish?

We’ll soon find out.

**The views, opinions, and recommendations expressed in this essay are solely my own and do not represent the views, policies, or positions of my employer or any other organization with which I am affiliated. This content is provided for informational purposes only and should not be considered medical, legal or investment advice.**

I swear to god. Every time Trump announces something on GLP-1s, I have to stop everything, clear my drafts, and reformulate my thesis on the market. Last week was no different.

On November 6, the Trump administration announced pricing agreements with Eli Lilly and Novo Nordisk to expand Medicare and Medicaid coverage for GLP-1s, along with deals for the newly minted TrumpRX cash pay channel. Most commentary has alluded to this as a win for pharma and a small win for patients.

I disagree. I think this deal is a blowout victory for Eli Lilly, a devastating loss for Novo Nordisk, and a sizable win for patients. Let me explain why.

But first, this edition is proudly brought to you by Light-it.

If you’re building a GLP-1 or weight-management startup, I’m about to save you six months of pain.

Most dev shops will nod along when you explain telehealth workflows, then come back three weeks later with a patient portal that violates HIPAA in five different ways. Or they’ll build your prescription routing system without understanding why pharmacy integrations aren’t just API calls.

I’ve watched and heard this happen enough times that when someone asks me for a dev shop recommendation in this space, there’s only one name I give them: Light-it.

They know the GLP-1 D2C space intimately- from onboarding flows and async visits to prescription routing, insurance checks, and refill reminders – they’ve helped multiple D2C telehealth companies ship products that work at scale, from MVP to series B and beyond.

The result?

You skip the expensive learning curve and start shipping products that actually work in clinical settings from day one.

Building in health tech?

Book a free consultation

What the Medicare/Medicaid deal actually means

Medicare and Medicaid represent one of the largest untapped volume opportunities in the GLP-1 market. Lilly estimates roughly 40 million people will gain new access to anti-obesity medications, assuming every state opts into Medicaid coverage and every Medicare Part D plan participates.

In my view, the deal is worth the price erosion because of the size of the opportunity we’re talking about. Unlocking 40 million people is massive. That’s almost two-thirds of the population of the UK, all on a GLP-1. This is especially true for Lilly, which I expect will take the lion’s share of this channel at Novo’s expense.

To understand why, let’s start with what actually changed. Medicare Part D already covers overweight/ obesity with certain comorbidities — cardiovascular disease for Wegovy and sleep apnea for Zepbound.

This new deal adds more comorbidities to the eligible list (prediabetes, kidney disease, heart failure, hypertension) and creates one new pathway: severe obesity (BMI ≥35) without requiring any comorbidities.

The eligibility requirements look restrictive, but I think they’re actually well-targeted.

IQVIA analysis shows Medicare patients have significantly higher rates of obesity-related comorbidities compared to insured populations. Hypertension, cardiovascular disease, kidney disease, and prediabetes are extremely prevalent in the 65+ age group. This makes sense given that as patients with obesity age, their risk of accumulating chronic conditions nearly doubles by the time they reach Medicare eligibility!

This means that while the deal requires specific comorbidities or BMI ≥35, it pretty much captures the majority of clinically appropriate Medicare obesity patients because few reach 65 with obesity and no qualifying conditions.

The economics of the deal are pretty sweet, too. Both Wegovy and Zepbound will cost $245/month with a $50 copay, down from current net prices of around $520-700/month.

And in all fairness, the gov’t is getting a good deal. The Trump administration expects roughly 10% of Medicare/Medicaid beneficiaries living with obesity to gain immediate access, which is roughly an extra 4-6 million people on a GLP-1 in the next year or two.

However, what’s important to note is that Medicare coverage will run as a pilot program and isn’t guaranteed just yet. Participation remains voluntary for Medicare health plans — Eli Lilly CEO David Ricks said he expects “almost all” plans to participate, but some may opt out.

Making this permanent requires Congressional action because there’s a law prohibiting Medicare from covering GLP-1s for weight loss (nothing’s ever easy!).

If the pilot proves fiscally sensible through reduced hospitalizations and complications, Congress probably has a foundation for making it permanent.

When it comes to Medicaid, more details need to be published on how it’ll work, but Medicaid plans are state-controlled and opt-in at $245/month. Novo reported in their Q3 earnings call that some states were expected to drop GLP-1 coverage because of current net pricing, so the new negotiated price will push more states to expand coverage.

This means Lilly’s expectation of ~ 34 million new patients through Medicaid is reasonable.

Price parity hands Lilly the advantage

Because Medicare Part D plans can cover both drugs equally, it removes those pesky formulary barriers—the insurance obstacles that make one drug harder to access even when both are “covered.”

In my view, this sets up tirzepatide perfectly: it delivers better weight-loss outcomes with lower GI discontinuation rates in head-to-head trials in SURMOUNT-5.

The positive results should enable Lilly to win an outsized market share in the US. Evidence of this is already visible internationally—roughly 75% of Mounjaro’s obesity sales come from out-of-pocket channels where patients choose based on therapeutic preference.

Additionally, the tolerability advantage of tirzepatide is particularly important for Medicare’s older population, who typically manage multiple chronic medications. GI side effects like nausea and vomiting interact poorly with cardiovascular drugs, diabetes medications, and antihypertensives that these patients are probably already taking.

I expect physicians prescribing in Medicare will favor the drug that has lower GI side effects and is less likely to create medication management problems that require patients to stop therapy.

It’s also worth remembering that Lilly’s portfolio advantage extends beyond tirzepatide.

Because Trump’s agreement covers future obesity drugs, Lilly can bring orforglipron and retatrutide into an open-access channel.

Orforglipron targets the exact Medicare sweet spot — patients who have type 2 diabetes and obesity. The medication will be extremely sticky in this population group, as I argued a few months ago, mainly because it doesn’t require empty stomach administration or waiting periods before taking other medications, like with Rybelsus/oral semaglutide.

Retatrutide represents an even longer-term competitive advantage. Phase 3 readouts from TRIUMPH-4 are expected soon, and early signals suggest weight loss outcomes exceeding both CagriSema and Wegovy 7.2mg.

One consultant endocrinologist, whom I spoke to and is involved in the trials, described the efficacy data as ‘incredible’.

Neither of Novo’s pipeline responses match retatrutide’s weight loss efficacy: CagriSema carries tolerability concerns from the amylin component, while Wegovy 7.2mg shows higher GI adverse events than the approved 2.4mg dose.

By the time Novo brings meaningful competition, Lilly will have established a three-drug portfolio in the gov’t channel that rewards clinical superiority.

The divergence between the companies’ fates is mirrored in their communications as well.

Lilly’s announcement emphasizes expanding access and “game-changing” opportunities for millions of Americans. Novo’s announcement opens by stating that they “expect an estimated negative low single-digit impact on global sales growth in 2026.”

That negative guidance is very telling. Novo’s low single-digit % impact accounts for both price erosion and expected volume uplift. If they anticipated capturing meaningful market share in Medicare/Medicaid, volume growth would offset the pricing hit.

Lilly’s cash pay strategy targets compounders

Over recent months compounded trizepatide has been steadily growing, and while Lilly is downplaying the impact these formulations are having on total sales, Novo has been relatively upfront about the data, which they’ve stated now shows over 1 million people using compounded GLP-1s instead of branded versions.

Last week, I argued the compounding market is here to stay because of FDA non-enforcement and judge rulings in favour of compounding pharmacies and telehealth platforms. My thesis still stands, but now I think Lilly is using price competition to target the compounding market instead.

Zepbound will be available through LillyDirect’s cash pay channel at $299/month for the lowest dose (2.5mg multi-dose pen) and up to $449/month for higher doses.

The average price across doses will be approximately $346/month.

Compounded tirzepatide currently ranges from $197 to $359/month, depending on the provider. Mochi Health charges $278 for the lowest doses, while Shed charges $279/month.

I expect significant volume migration from compounded to branded tirzepatide as patients realize the price differential no longer justifies the potential quality trade-off that’s been highlighted by the FDA (despite the green list).

This sets up a pricing war between pharmaceutical manufacturers and compounding pharmacies.

The White House indicated that cash-pay prices should decline from the current $350/month average to $245/month over the next 24 months. As branded pricing compresses, compounders will need to reduce their own pricing to maintain the cost advantage that drives patient selection.

This inevitably creates margin pressure on compounding pharmacies. Compared to semaglutide, tirzepatide is more expensive to source as an API, given its dual-agonist complexity, which limits how much compounders can reduce pricing while maintaining profitability.

As the branded-compounded price gap narrows from $150-200/month to potentially $50-100/month, I think many patients will pay the premium for a pharmaceutical-grade product. That’s also why you’re seeing the rise of microdosing programmes with lower-BMI eligibility from D2C players- essentially a marketing play to offset tightening unit economics.

In this case, the dynamics really do favour Lilly, and I expect the compounded tirzepatide market to shrink meaningfully over the next two years as pricing converges.

The other winning deal

Lilly’s oral GLP-1, orforglipron, will launch at $149/month for starting doses and up to $399/month for higher doses, averaging around $346/month. This is exactly what I predicted two months ago when I estimated orforglipron’s net cash-pay price would land between $150-300/month.

More importantly, the pricing confirms my thesis that Lilly would maintain price parity between orforglipron and Zepbound to enable market segmentation rather than cannibalization.

The strategy works on two levels. First, orforglipron’s small molecule structure means manufacturing costs are substantially lower than oral semaglutide, which uses nearly 10x the API dose with an absorption enhancer. At $149 for starting doses, I expect Lilly will maintain healthy margins while Novo COGS for oral sema may feel the squeeze.

More importantly, Lilly secured a Commissioner’s National Priority Review Voucher for orforglipron, accelerating FDA approval to Q1 2026.

This was a key competitive win buried in the details!

Novo was counting on a first-mover advantage, with oral Wegovy expected to launch in Q1 2026. The assumption was that 3-6 months of exclusivity in the oral space was enough to build brand recognition and capture market share before orfor arrived. Lilly’s priority voucher now eliminates that window.

If orforglipron launches simultaneously or shortly after oral Wegovy, Novo now loses the positioning advantage they’ve been building toward.

Novo gets squeezed in cash pay

Novo’s cash-pay strategy is really puzzling to me. Both Ozempic and Wegovy are priced at $350/month through TrumpRx, with flat pricing across the dose titration schedule. In my view, this represents a missed opportunity to apply pricing pressure on the compounded semaglutide market.

Compounding pharmacies like Hims & Hers currently offer compounded semaglutide at approximately $199/month. The $150 price gap between Novo’s branded product at $350/month and compounded alternatives means price-conscious patients have little incentive to switch.

The result is that compounded semaglutide will survive as a viable market segment while compounded tirzepatide faces compression.

Novo appears to be prioritizing margin preservation over market share capture in the cash-pay channel, and it may reflect their view that they can’t capture meaningful volume with this new deal, even with aggressive pricing. So they’re optimizing for profitability on whatever share they do retain rather than fighting a pricing war they don’t expect to win.

But these dynamics only matter if commercial insurers, who control the majority of volume, don’t blow up the entire market structure.

Commercial Spillover

Government pricing creates a reference price, while Medicare and cash pay will now create the floor.

Once Medicare and Medicaid pay $245/month, that number becomes the reference price for the entire market. While the deal explicitly excludes “pricing obligations in the commercial channel,” commercial insurers will surely begin to ask: “Why are we paying $520-700 net price when the government pays $245?”

Morgan Stanley’s analysis of Eli Lilly has lowered 2026/2027 revenue estimates for Zepbound and Mounjaro, expecting commercial prices to converge toward government prices over time. For Zepbound, they model the US blended net monthly price declining from $594 currently to $475 in 2026, $390 in 2027, and $308 by 2030.

For Mounjaro, $397 in 2026, $337 in 2027, and holding at $337 in 2030.

This gradual decline in net price per prescription over time means that Goldman Sachs’ analysis of their obesity market forecast was ultimately right. Price erosion will reduce the global market size of obesity by 2030 from $130 billion globally to $95 billion, with US peak sales down from $95 billion to $70 billion.

But, as I argued last week, lower net prices in the commercial channel don’t necessarily solve the coverage problem. Even at $245/month, covering all eligible obesity patients would cost commercial insurers tens of billions annually and financially cripple them.

Therefore, I expect coverage to remain patchy and an increasing use of prior authorizations and step therapy to restrict uptake, regardless of how low prices drop in the near term.

Conclusion

Ultimately, this deal is a clear win for Lilly and sour grapes for Novo.

I expect the American pharma giant to capture the majority of market share in the gov’t channels due to the clinical superiority of its drug portfolio. I’m convinced that Novo’s negative sales guidance tells you everything about who expects to capture share.

For patients, this represents meaningful progress. Roughly 4-6 million Medicare/Medicaid beneficiaries gain access to anti-obesity medications under expanded comorbidity criteria, with another 34 million becoming potentially eligible through state Medicaid programs.

Yes, it’s currently opt-in, but as a first step, this moves millions of patients from no access to some access.

Now, I just hope Trump will let the competition and this sleep-deprived writer settle before making another announcement.

**The views, opinions, and recommendations expressed in this essay are solely my own and do not represent the views, policies, or positions of my employer or any other organization with which I am affiliated. This content is provided for informational purposes only and should not be considered medical, legal or investment advice.**

For the past few months, I’ve been hearing all sorts of predictions about the compounded GLP-1 market collapsing. Supposedly, the FDA crackdowns are imminent, and litigation is going to rain down from the high heavens at any D2C telehealth provider who dares advertise the word “personalisation” with “GLP-1”.

It all sounds very apocalyptic. But when you actually look at what’s happening, the outcome is pretty obvious.

Compounding GLP-1s aren’t going anywhere. More than a million patients are turning to compounded options for cheaper, affordable access while insurers tighten coverage, and requests for prior authorizations multiply like gremlins in a storm.

Add in the political pressure to lower drug pricing, and you have a perfect tailwind that all but guarantees compounding to persist over the long haul.

Whether compounding is ethically defensible or medically safe is an entirely separate debate. I’m not cheerleading for compounders or defending Big Pharma. What I’m doing is examining the evidence.

So let’s set opinions aside and look at the facts.

But first, this edition is brought to you by Light-it.

Most dev shops will build whatever you spec. The best ones ask why you’re building it in the first place.

When you’re creating a healthcare product, that difference really, really matters.

You need engineers who understand that “move fast and break things” doesn’t work when you’re handling patient data, integrating with pharmacies, or supporting clinicians. Who knows why a clinical workflow can’t just mimic a consumer app. And, those who’ve already navigated HIPAA, FDA regulations, and hospital IT requirements.

Light-it are those engineers.

They partner with GLP-1 and weight-management startups to design and build secure, scalable infrastructure—fast. From onboarding flows and async visits to prescription routing, insurance checks, and refill reminders – they’ve helped multiple D2C telehealth companies ship products that work at scale, from MVP to series B and beyond.

The result?

Less time in Slack explaining HIPAA. More time shipping features patients actually use.

Building in health tech?

Book for a free-consultation

The supply is strangled but not cut off

In early 2025, a Brookings Institution report handed the FDA everything it needed to shut down compounding for good.

The report found that nearly all semaglutide API (active pharmaceutical ingredient) imported for compounding since June 2023 came from Chinese suppliers, and the majority had failed FDA inspections. Industry observers and big pharma executives widely expected an aggressive crackdown.

The FDA had many ways to turn off the compounding tap. They could’ve issued a blanket import alert and put every manufacturer on the red list1, choking off API supply at the border.

They could’ve added semaglutide or tirzepatide to the “Difficult to Compound” list, ending pharmacy production overnight. They could’ve even enforced Section 503A’s 5% out‑of‑state prescription cap and kneecapped the industry.

They chose to do none of these things.

Instead, the agency put out an import alert for GLP-1 APIs and immediately published a green list of approved overseas manufacturers, of which there are dozens.

In my view, this is implicit acceptance and accommodation of the compounding industry by ensuring the APIs entering the country are ‘safe’.

Would the FDA put guardrails on something they eventually planned to stop?

I don’t think so.

On closer look, the whole thing seems relatively toothless. Most 503a pharmacies are not under direct FDA oversight, and they don’t need to publicize their API sources. So the FDA list is just a little above the bare minimum of any enforcement.

Moreover, by stating the import alert “does not create any new limits on legal compounding of GLP-1 drugs,” the FDA has explicitly stated that pharmacies can continue legally compounding GLP-1s under the conditions already permitted by federal law.

As I argued earlier this year, it was wishful thinking for Novo and Lilly to bank on federal muscle given the political pressure to preserve access.

Legal recourse seemed to be the next best option, but alas, the gods seem to favour compounding in this case as well.

Mixed verdicts create tailwinds

Lilly’s and Novo’s legal strategy is relatively straightforward. Since they can’t ban compounding under Section 503A, they’re trying to strangle direct-to-consumer advertising which is the major source of customer acquisition for telehealth companies.

Because Lilly’s cases are on public record, we know their legal strategy uses three statutes to attack “personalized GLP-1” claims:

(1) The federal Lanham Act for false advertising between competitors. This is the core federal law allowing Lilly to sue competitors for commercial injury resulting from false or misleading advertising.

(2) State unfair competition laws (UCL). This broad state statute targets any type of business practice considered unlawful, unfair, or fraudulent.

(3) State false advertising laws. This specific state law prohibits untrue or deceptive marketing claims that have a tendency to confuse or mislead the public.

The endgame was to secure court injunctions blocking any claims of personalisation and safety and efficacy, which would force telehealth companies to either stop advertising completely or water down their messaging to the point where conversion rates drop from the face of the earth.

In the Northern District of California, Lilly’s personalization claims against Henry Meds survived dismissal because the court found that Henry advertised “personalised treatment” while everyone received identical pre-made doses regardless of individual circumstances.

But just 400 miles south, the Central District of California dismissed identical personalization claims against Willow, ruling that any prescription drug made for an identified patient with a valid prescription automatically qualifies as “personalized” under FDA compounding requirements.

If courts can’t agree on what “personalized” means, which is the most basic claim in compounding advertising, enforcement becomes nearly impossible at scale. The split will potentially create a patchwork of mini-jurisdictions, each with its own standards. Companies can forum shop, incorporating in friendly districts and adjusting marketing language based on local precedent.

These mixed rulings become fundamentally positive for compounding and frustrating for pharma who will be unable to mount a coordinated attack.

What surprised me even more was how both California courts handled safety and efficacy claims. Both dismissed them outright. Lilly argued that compounders can’t prove their products are safe because they lack FDA approval and clinical trials. The courts ruled these were impermissible “lack of substantiation” claims.

Under California law, plaintiffs must affirmatively prove a product causes harm, not merely that it lacks scientific validation. The burden sits with pharma to demonstrate danger, not with compounders to demonstrate safety.

This ruling has significant implications! Compounded GLP-1 gummies, sublingual drops, and combinations with B12 or other additives remain legally defensible until someone proves actual harm. Marketing these products as safe is permissible absent affirmative evidence of danger, and that’s remarkable when you consider what’s actually being sold.

Novo should be watching these outcomes closely. Lilly is an American company with domestic legal expertise navigating U.S. courts, and they’re still getting inconsistent, unfavourable results. Novo, a Danish “interloper” with arguably less teeth, would likely fare worse. Remember that the compounders don’t need to win these cases; they just need to survive until 2032, when the patents expire, which isn’t that long at all.

As a result, I believe the compounding industry will feel emboldened and continue en masse. Their last big pillar of support will come from consumers themselves because of barriers to coverage from both insurers and employers.

Coverage Is Getting Worse, Not Better

Commercial insurance has not improved in 2025 versus 2024, according to a GoodRx study based on prescription insurance coverage data. The analysis found that the number of people with no commercial insurance for Zepbound increased by 180% in 2025, with an estimated 97 million people without coverage.

When we look at GLP-1 costs to employers, we can understand why they’re restricting access. A recent EBRI study found that covering GLP-1s increased employer health insurance premiums by 5.3% to 13.8% in year one, assuming current net prices of $617 to $766 per month.

For a typical family plan costing $27,000 annually, that’s an extra $1,400 to $3,700 per year. Since employers cover roughly 70% of premiums, they absorb $1,000 to $2,600 per family in immediate costs while the clinical benefits won’t materialize for 3-5 years.

The EBRI study also found that if everyone actually stayed on the medication (what they call “perfect adherence”), premiums would jump even higher from 6.1% to 8.1% for the same coverage.

This is important because the medications only work if patients take them long term! As I’ve argued many, many times, the weight comes back when people stop. So the high discontinuation rates (26% quit within three months, 36% within a year) don’t actually save employers money either. They just mean patients get neither the health benefits nor the cost savings.

The common argument is that lower drug prices would solve the coverage problem. If GLP-1s became cheaper, insurers would drop their restrictions and more people could access treatment.

The IRA’s Medicare negotiation framework and Medicaid best-price rules will theoretically apply downward pressure on GLP-1 net prices over time, creating spillover effects in commercial contracts because CMS pricing becomes a reference point that commercial payers can leverage in their own negotiations.

The EBRI study tested this theory by modeling GLP-1s at $200 per month instead of $600-$750. Even at that dramatically lower price, premiums still increased between 1% and 3.9%. The problem isn’t the price per dose. It’s that over 40% of privately insured adults qualify for these drugs based on medical guidelines, but only 3% currently take them. If that 3% creeps up to even 10% or 15%, the costs become unmanageable for employers operating on annual budgets.

One benefits manager at a large retailer captured the decision rather bluntly:

“We exclude weight loss, the entire anti-obesity category. We wanted to leave some, but rebates got dramatically worse. We made the business decision to pull the whole category. We had to educate the employees using the others that they were very cheap and should just go buy them. People weren’t getting off the drugs, and the costs were skyrocketing.”

The cash price for compounded semaglutide sits around $200 per month, comparable to or cheaper than many employer plan cost-sharing arrangements after deductibles and prior authorization are factored in. Plus, it arrives without paperwork, waiting periods, or claim denials.

It beggars belief that over 88% of people with insurance coverage for GLP-1s for weight loss still face restrictions such as prior authorizations or step therapy, and of course, doctors love this. Their favourite hobby is paperwork!

The issue is that prior authorization and step therapy function as the primary mechanisms for demand control, and when an insurer creates so much friction, they basically say no without explicitly saying no.

As long as insurance access remains clogged by administrative barriers and employers continue pushing members toward cash alternatives, compounding is and will continue to be the solution to a permanent mismatch between clinical demand, pricing, and benefit design capacity.

The conclusion

I don’t think you can put this genie back in the bottle, not when a million patients have discovered they can get the same drug for $200 instead of $1,000 and not deal with all the faff of insurance denying coverage.

I’ve argued before that patent infringement litigation is pharma’s nuclear option, the only legal tool with enough force to actually dent compounding. Will Novo or Lilly press that button? Maybe. Patent litigation is binary, and you either bankrupt the compounders or you lose spectacularly and validate their entire business model. It’s a massive gamble with no middle ground.

So if they don’t go nuclear, what’s left?

Pricing.

They could undercut the compounders by dropping GLP-1 prices to commodity levels. But that means turning their multi-billion dollar franchises into margin-squeezed utilities. After spending a decade and $10 billion on R&D, are they really going to slash prices in year three of commercialization? I don’t think so.

And honestly, I don’t blame them because innovation deserves returns!

But when a market disruptor comes in selling the same ingredient for a fraction of the price, and the FDA accommodates it, and the courts can’t stop it, and insurance economics make branded coverage unsustainable...

Market force will win and guarantee compounding doesn’t go anywhere, anytime soon.

If I see another TAM slide predicting GLP-1s being a $100 billion market by 2030, I might gouge my eyes out. I think I’ve seen some variation of that number at least 47 times this week. We get it. The market is big.

But going forward, the more important, more pressing questions are i) how the hell are we going to get people on treatment and then stop them from cycling on and off again? ii) what are the ripple effects of having a drug like GLP-1 in the market?

I found three stories this week that have some answers for us.

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Most GLP-1 coaching apps function like content libraries that don’t inspire real behaviour change. Not Omada’s GLP-1 care track program, though.

Through its companion app, Omada achieves 94% retention at 12 weeks and 84% at 24 weeks, which is far, far above the typical rates of 40-80% and 33-74% respectively. The first thought that came to mind was: have they fudged the numbers?

No, I don’t think they have, because they’ve used pharmacy refill rates alongside customer surveys to back the claim.

So, I dug into how they’re pulling this off and how it compares to other apps on the market I’ve seen, and I found their formula for success to be very simple and very smart:

• They align the program to what predicts outcomes, not engagement. When their analysis showed video lesson completion was a weak predictor of weight loss, they stopped rewarding it. Instead, they put the emphasis on immediate coach contact in week one and steady peer engagement because those behaviours drive weight loss and retention.
  

• They use AI to spot members who might quit and then have real coaches jump in with perfect timing. Messages like “Hey, missed you at weigh-in yesterday — want a quick reset plan?” are simple, but they work and are way better than those annoying generic app notifications we all tend to ignore.

These data-driven insights and proactive messages are just some examples of how Omada is leveraging its growing data advantage. With 100k+ GLP-1 members and PBM partnerships giving them access to 100M+ covered lives, Omada is building a powerful moat.

As members persist longer on therapy, Omada collects more behavioral data, which improves their AI models, which drives better retention, which generates more data... and you get the picture.

From a financial perspective, I expect them to get aggressive about pushing routine interactions (meal planning, onboarding, basic check-ins) to AI. That should meaningfully compress their COGS since human coach time (I imagine) is their biggest expense right now.

They’re also playing a smart platform game.

Omada helps over 700k patients with MSK, diabetes and hypertension through similar digital programmes which give them leverage as each condition has significant overlap with the other.

The obvious play is gearing up to sell employers one contract that covers the entirety of chronic care conditions on one single platform, rather than purchasing disjointed services from different providers that lack data interoperability.

More conditions = more recurring revenue per customer = better unit economics. Not only do I think it’s brilliant, I am also extremely bullish on their approach. If I were an investor, I’d keep both eyes on them.

GLP-1s could be the first drug class to reshape national life expectancy curves. Swiss Re, one of the world’s biggest reinsurers, recently modelled three scenarios for GLP-1 uptake and persistence in the US and UK.

By 2045, the US could see up to a 6% reduction in deaths if the drugs are widely used and people stay on them (optimistic). Even in a baseline scenario, mortality falls about 4%. For context, most public health interventions struggle to move that curve by even a single, tiny percent!

The figures are slightly more conservative in the UK, whose population starts at a slightly better baseline BMI than our American brethren. Mortality reduction peaks at about 5% under optimistic assumptions and is closer to 3% in the baseline.

Now, let’s say if everyone prescribed a GLP-1 stayed on it and those best-case mortality gains actually materialized, a very interesting problem arises. We’d see longer lifespans (how long we live) and healthspans (how long we stay healthy), and while that’s a clear public health victory, it presents a very complex challenge for pension funds and annuity providers as longer and healthier lives mean longer and longer payouts.

This creates what the industry calls “longevity risk.”

Without innovations in wealth span (how long our money lasts), we may be creating a society that cannot financially sustain itself as people outlive their savings. But of course, this longevity crisis only matters if we solve the persistence problem first.

We’re seeing people start and stop GLP-1s frequently — a pattern similar to yo-yo dieting. Data even shows a seasonal pattern to the yo-yoing, with more people starting treatment in winter and stopping in summer and creating a pattern that suspiciously looks like New Year’s resolution gym memberships.

The problem is that this on-again-off-again approach could be dangerous.

While we don’t have long-term studies yet, repeatedly gaining and losing weight probably isn’t good for the body. I’d even go out on a limb and say that repeated weight regain may actually worsen cardiovascular and metabolic health.

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One thing at a time, though! Long-acting GLP-1s — monthly injections instead of weekly — could reduce decision fatigue and make persistence a lot easier.

It’s 12 decisions you need to make instead of 54 for injections and 365 for daily tablets. I’m particularly excited about Maritide, Amgen’s monthly injectable, which has shown positive read outs in Phase 2 trials — I’m confident they’ll deal with the GI side effects and tolerability with adjusted dosing.

As for the longevity risk, insurers and policymakers will find creative ways to make sure people die on schedule.

Pharma needs its own Polymarket and I’ll die on this hill. I recently wrote about Novo’s EVOKE trials testing whether oral semaglutide (Rybelsus 14mg) slows the progression of Alzheimer’s disease.

EVOKE is powered to detect ~20% slowing on CDR-SR, and I’m confident it’ll be a positive read out.

Yes, you can call me out if it fails, but I’d even go so far as to say that’s unlikely because even a ~10–15% slowing of disease would still be clinically meaningful given sema’s safety profile and pricing compared to the super-expensive anti-amyloid drugs on the market.

Interestingly, when I was looking into overall market sentiment around EVOKE, I found a Polymarket-style prediction forecast, and the odds are basically split 50:50. Firstly, this is awesome. Secondly, imagine if every Phase 3 trial had a public prediction market. We’d be able to see:

• Which trials insiders actually believe in (watch where pharma employees bet)

• Real-time sentiment shifts when competitive data drops

• Better capital allocation (investors could hedge trial risk directly)

• Honest probabilities instead of binary “will it work?” speculation

The FDA and pharma companies would definitely hate this idea. But for an industry that claims to be ‘data-driven,’ we’re weirdly comfortable making multi-billion dollar decisions based on investor decks that say “we remain confident in our pipeline”.

Give me the transparent odds.

**The views, opinions, and recommendations expressed in this essay are solely my own and do not represent the views, policies, or positions of my employer or any other organization with which I am affiliated. This content is provided for informational purposes only and should not be considered medical, legal or investment advice.**

In the next few months, the EVOKE trials will show the cleanest readout yet on whether GLP-1s can slow Alzheimer's disease. If the results are positive, every analyst and their mother will be shouting how "oral semaglutide cracks open the Alzheimer’s market”.

Yeah, that's the obvious first-order effect, but you and I like to think a little more into the future.

Oral GLP-1s cause weight loss, and for Alzheimer's patients — who are already at increased risk of frailty — that weight loss includes dangerous muscle mass loss. Losing muscle will make these patients even more frail and increase the risk of falls and hip fractures, which’ll accelerate the cognitive decline we’re trying to prevent.

These unwanted side effects present a massive opportunity for Regeneron, who happen to be sitting on exactly the right drug at exactly the right moment.

But the extent of their success depends on what happens with EVOKE.

So let's start there.

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Why the EVOKE trials are important

The big idea with EVOKE and EVOKE+ is power and clarity.

In these two Phase 3 studies (n=3,680 total), patients are randomized to placebo or oral semaglutide in a 1:1 ratio and assessed using the CDR-SB at 2 years, with follow-up of up to 3 years.

This is the definitive test of whether GLP-1s can slow cognitive decline in early Alzheimer's, as the trials are large enough with long enough follow-up time to tell real treatment effect from noise that has really clouded smaller, shorter studies.

But what does 'slowing cognitive decline' actually mean in human terms?

CDR-SB is the Clinical Dementia Rating Sum of Boxes — a single score that measures how well someone with Alzheimer's can think and function in daily life.

Researchers interview both the patient and a family member or caregiver, then rate six key areas: memory, knowing where they are in time and place, judgment and problem-solving, etc., and these ratings are added up to arrive at a score between 0 and 18.

Higher numbers basically mean worse function.

To appreciate what oral semaglutide needs to achieve, we need to understand what passes for innovation in Alzheimer's treatment today.

Our current gold-standard drugs do not cure the disease or stop it. They only slow Alzheimer's progression by roughly one-quarter to one-third compared to placebo. In my opinion, this is a miserable return on investment given the billions invested and decades spent chasing tails on the wrong hypotheses!

To put that into more concrete terms: on the 0 to 18 CDR-SB scale, lecanemab, a monoclonal antibody that’s not approved on the NHS (because of cost) but is approved by the FDA, showed a 0.45-point advantage at 18 months, which is about 27% slower than placebo.

Donanemab, another controversial drug which costs about £60-80,000 per year, shows a 0.7 point difference at 76 weeks, which is roughly 33% slower than placebo. Both of these drugs require repeated IV infusions and MRI scans to monitor for serious brain side effects, which, of course, adds to the overall cost and clinic time for physicians.

So, if oral semaglutide shows a CDR-SB difference in the same ballpark as lecanemab or donanemab, the cost and complexity savings will be absolutely humongous.

Later this year (or perhaps, even this month), don't look for a miracle! Look for 0.5 to 0.7 points on CDR-SB — roughly a 25-35% slowing because Sema just needs to match the mediocre bar for success.

Anything above that and Novo's stock goes up like a hockey stick.

The likelihood of GLP-1 success

Five out of six major pooled analyses suggest GLP-1s significantly lower the risk of dementia and Alzheimer’s.

One pooled analysis of three RCTs conducted by Nørgaard et al estimated about a 53% lower dementia risk on liraglutide or semaglutide versus placebo. The important caveat here is that there were very few events overall in the study — 15 on drug treatment vs 32 on placebo — so we need to treat this more directionally.

Other, smaller trials in patients who already have Alzheimer’s point both ways, with Edison et al reporting better executive scores and less temporal and whole-brain atrophy on liraglutide, while Gejl (n=38, 6 mo follow-up) and Mullins (n=21, 1.5 yrs follow-up) were neutral to negative, which is exactly what you expect from studies that are short, and not powered to read a slow, insidious disease.

If we zoom in on the goings on of the brain, we’d see that Alzheimer's begins with widespread chronic inflammation, often years before any symptoms appear. As this progresses, the protective blood-brain barrier (BBB) starts to break down like a filter becoming more porous over time. This allows harmful molecules to seep in, but also prevents the brain from efficiently clearing out cellular waste. Meanwhile, damage to tiny blood vessels reduces blood flow to critical brain regions and slowly starves neurons of the oxygen and nutrients they need to function.

However, will oral semaglutide need to get through the blood-brain barrier to impact brain activity? We don’t know yet, and animal studies suggest they don’t cross the BBB.

But if sema does enter the brain cells in humans, then any benefit will include direct actions on the neurons themselves.

If it doesn’t, I still think it can affect the brain through other potential routes.

First, the brain has gateway regions such as the area postrema and the arcuate nucleus that sit outside a tight barrier and can sense circulating GLP-1 signals. Second, GLP-1s improve inflammation, microvascular health, and insulin signalling in the body in ways that support brain networks indirectly.

Therefore, the scientific justification of sema’s success is still high.

What about tirzepatide? Interest is even higher because it targets both GLP-1 and GIP receptors, and some preclinical work with dual agonists suggests they can cross the blood-brain barrier. There is no human proof, however, that tirzepatide does this, so treat this as mere speculation on my end.

What we do know for certain is that GLP-1s will lead to weight loss — and this isn’t always good news for those with Alzheimer’s.

The sarcopenia constraint in older patients

GLP-1s change body composition as well as weight, and that matters more with age because reserves are lower to start with. Nearly 45% of the weight lost on semaglutide is lean mass.

If we treat 14 mg oral as roughly comparable to 0.5 mg weekly injectable Ozempic for orientation, then an older patient on oral tablets loses about 3.7 kg over the 30-ish weeks (bear in mind, evoke trials are 2 years long), and if around 45 percent of that loss is lean mass (or thereabouts) that is about 1.7 kg of muscle gone.

For someone already close to frailty thresholds, a 1 to 2 kg hit to lean mass can dramatically reduce chair-stand time and raise the fall risk, which is why the quality of weight loss becomes extremely important in these patients.

The case for Trevogrumab

And this is where Regeneron comes in to save the day.

Their strategy is to improve the quality of GLP‑1 weight loss by blocking myostatin — which is a natural brake on muscle growth — so that when semaglutide reduces appetite and weight, the body does not give up as much muscle along the way.

In the COURAGE Phase 2 interim analysis, the company reported that about thirty-five percent of semaglutide‑induced weight loss reflected lean mass loss. Adding trevogrumab preserved roughly half of that lean loss at lower doses and more than half at higher doses.

On the other hand, ​​a triplet combination that added garetosmab showed even better results - preserving more muscle and burning more fat. However, more patients dropped out due to serious side effects, which would be a major problem for frail elderly patients who already have trouble tolerating medications.

This makes me think that the side effect profile with low doses seems reasonable, and we’ll get a clearer picture during in-depth readouts at the EASD conference in Vienna later this month.

Therefore, the realistic near-term comb looks like semaglutide plus low-dose trevogrumab delivered subcutaneously and titrated for potential Alzheimer’s patients.

The three possibilities

Base case: EVOKE shows a modest but convincing difference on CDR‑SB at two years with slowing of cognitive impairment in the range that we already accept from gold standard treatment.

In this world, Regeneron selects a trevogrumab dose that preserves about fifty percent of lean muscle mass loss and positions the combo for older patients with mild Alzheimer disease who are at risk of frailty.

Bear case: EVOKE shows no statistically significant difference on CDR-SB at two years and there is no Alzheimer’s label indication. The sarcopenia problem in older GLP-1 patients does not disappear, so Regeneron still has a use case but it’ll be outside neurodegenerative conditions.

Best case: EVOKE produces a stronger absolute gap and higher percent slowing on CDR‑SB, along with acceptable discontinuation rates.

In this world, Regeneron accelerates timelines and doses as oral sema becomes widely adopted in clinical practice.

Where we go from here

Whatever happens, the EVOKE trials are going to change how we think about metabolism and inflammation in neurodegenerative conditions.

If they work, we've found a new treatment pathway that doesn't require IV infusions or brain scans to monitor for swelling. If they fail, we'll know that GLP-1s aren't the metabolic answer to Alzheimer's - which saves billions in misdirected research!

But I'm betting they work. And when they do, everyone will focus on Novo’s success. However, we’ll know that Regeneron is the company that will make patients actually stay on treatment.

**The views, opinions, and recommendations expressed in this essay are solely my own and do not represent the views, policies, or positions of my employer or any other organization with which I am affiliated. This content is provided for informational purposes only and should not be considered medical, legal or investment advice.**

When Novo prices oral semaglutide in the next few months, they'll be anchoring expectations for a $25 billion market. Will the price of the oral GLP-1 match the price of the injectables, or will it be discounted — and by how much?

With the orforglipron data in hand now, pricing is easier to predict, as are Novo’s and Lilly’s strategic positions: both can win without undercutting each other.

The more interesting question is what Novo does with its 8-month head start.

Unlike Wegovy's launch back in 2021, Novo now has an army of cash-pay and D2C channels locked, loaded, and ready to mobilize.

If they can drive a meaningful % through these channels while securing preferential formulary positions to keep co-pays low and fend off compounders, they'll create a blockbuster launch that Lilly will struggle to match.

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Two drugs, two markets

There are approximately 56 million American adults with class 1 obesity (BMI 30-34.9) who need roughly 10-15% weight loss to reach a healthy BMI. This is something orals can now effectively deliver.

Based on OASIS-4 versus ATTAIN-1 trials, oral sema 25mg leads to higher average weight loss (11.4% vs 9.1%) in a shorter timeframe (64 weeks vs 72 weeks).

A few percentage points might not matter clinically, but they become powerful marketing tools when you're telling patients they have a 44% chance of hitting their target weight with oral sema versus 30%-ish with orforglipron—with similar side effects for both.

Add in Novo's 8-month head start to embed 'Wegovy in a pill' into the cultural narrative, and oral sema should dominate the obesity-only market.

But…when you look at the ATTAIN-2 data in diabetic patients with obesity — notoriously the hardest population to treat — orforglipron produces better results, delivering 7.1% placebo-adjusted weight loss compared to injectable Wegovy's 6.2%.

I'm surprised this wasn't headline news, given this is the first time in history an oral small molecule has outperformed an injectable peptide!

Because diabetic patients also typically have multiple conditions like high blood pressure, high cholesterol, etc., they’re likely juggling multiple medications, too.

The last thing they need is another complex regimen like oral sema where they have to fast for 30 minutes every morning before they can take another medication.

It’ll just become a huge pain for them, and adherence will be shot to the ground.

In contrast, orforglipron fits right into their existing routine. They can take it at any time of the day, fasted or not, with a tolerability profile similar to injectable GLP-1s. Given that roughly 89% of Type 2 diabetics are also overweight/obese in the US, that's a massive market where orforglipron has both clinical and practical superiority.

This is why I believe Lilly will own this segment.

Why there won't be a price war

So oral sema wins for obesity-only patients, while orforglipron is better for diabetic patients.

Of course, real-world prescribing is messier than clinical trials suggest. Some diabetics will get oral sema, some obesity-only patients will try orforglipron. But when the dust settles, the data shows where each drug performs best — and that's where I believe the market share will concentrate.

This natural segmentation should convince you that huge pricing discounts aren't happening. Both drugs are well differentiated with unique value propositions and significant label expansion opportunities.

In particular, oral sema will likely launch with CV benefits and MASH indications already on the label. More importantly, if the 3mg, 7mg, or 14mg doses show Alzheimer's protection through the evoke trial (read out in September), oral sema will transform from a weight-loss/diabetes treatment into one of the most impressive drugs of the decade.

The companies' recent actions confirm they're thinking this way as well. Lilly's 170% UK price hike for Mounjaro — clearly aimed at US pricing optics — isn't the behavior of a company planning to compete on cost.

Meanwhile, the COGS for oral sema are actually higher than for Wegovy: each daily 25mg tablet means patients consume 175mg of API per week versus just 2.4mg for weekly Wegovy, that's roughly 73x more active ingredient per patient. Additionally, each tablet needs SNAC (an absorption enhancer) coating to increase the drug's bioavailability.

I think these added requirements more than offset any savings from removing the pen.

Given this reality, I expect both drugs to list around $1,100/month (WAC), within 20% of Ozempic ($998) and Wegovy ($1,349).

Cash-pay pricing will be similarly rational.

With Wegovy at $499 through NovoCare, oral sema will likely land at $400-450, in line with the 'Wegovy in a pill' market positioning rather than becoming a discount alternative. Even at these prices, Novo probably makes more per prescription than they do through PBMs after rebates.

So if both companies will price similarly, what determines who wins? Very simply, commercial execution.

And Novo's about to demonstrate what modern drug launches will look like.

The multi-channel revolution

This is the first time in pharma history that a drug launches with D2C and telehealth as primary channels.

Ro, LifeMD, WeightWatchers, and GoodRx already process thousands of GLP-1 scripts monthly through NovoCare, essentially giving them a pre-built salesforce.

They have also spent the better part of two years building databases of weight-loss seekers and perfecting conversion funnels with millions in daily ad spend. Now, Novo will benefit from this ecosystem at no extra charge.

The 8-month window gives Novo time to convert these databases into actual patients before orforglipron launches, so expect your Instagram feed to basically be 'Wegovy in a pill' ads.

These partnerships are now delivering on scale.

Novo's earnings call confirmed that Wegovy captured 10% of total prescriptions through its pharmacy platform — roughly 28,000 scripts per week at ~$499 each. That's $14 million in weekly revenue outside the insurance system entirely.

And that's for an injectable.

With oral sema removing the needle barrier, these numbers could multiply, and by the time Lilly mobilizes their own D2C channels, patients will already be stable on sema and we know that switching stable patients is very difficult.

Of course, while cash-pay provides immediate revenue, the real juicy volume still comes through insurance. And Novo will have an interesting strategy to lock that down as well.

Boxing out the competition

CVS's July 1st formulary switch from Zepbound to Wegovy delivered what UBS called a 'step change' in total prescription volume, helping Wegovy maintain 40%+ market share for over five consecutive weeks.

Now, Novo will push for the same exclusive positioning for oral sema across all the big three PBMs, using the same deeper rebates that worked for Wegovy.

Shivu Sharma, a biotech specialist, calls this 'boxing out' - once you've secured exclusive formulary positions, competitors face an almost impossible climb to dislodge you. It's aggressive but effective.

Another reason Novo will offer deeper rebates is to fend off compounders. Given that the FDA shows no signs of acting, a smart way to kill the compounding threat (apart from patent litigation) is to make copays so low — in the region of $25-50 — that it makes buying from 503a pharmacies illogical.

However, an issue Novo will have to navigate is people being prescribed oral sema but not accessing it due to prior authorization barriers.

They'll have to ease this friction as much as possible so people who get prescribed actually fill their scripts. One way they can do this is by embedding NovoCare navigators directly into prescriber workflows, especially at telehealth partners, to handle prior authorizations in real-time before patients leave their virtual visit.

What this really means

So where does this leave us? Novo will price oral sema within 20% of injectables, and Lilly will match. Both will make billions, and the only surprise here is that everyone's surprised!

If Novo drives meaningful volume through cash-pay and telehealth channels — say 30-40% of scripts — they'll prove that D2C is no longer optional for pharma companies with drugs that people actually want.

Every company watching will realize they need their own direct channels or risk being locked out of huge patient populations.

True, the economics only work when your drug has a strong pull-through and the discount to patients generates enough volume to offset the margin reduction.

But for the right products, this could unlock entirely new revenue streams.

While Wegovy changed how we treat obesity, oral sema is about to change how we sell drugs.

Five years from now, every big debut will launch with telehealth partnerships, cash-pay channels, and formulary strategies that treat PBMs as one option among many.

Another shift we can thank GLP-1s for.

**The views, opinions, and recommendations expressed in this essay are solely my own and do not represent the views, policies, or positions of my employer or any other organization with which I am affiliated. This content is provided for informational purposes only and should not be considered medical, legal or investment advice.**

I keep wondering how much orals will really change the obesity landscape. Wall Street is fixated on weight-loss percentages, while analysts throw around wildly different penetration numbers. Some say orals will make up just 25 percent of the obesity market, others think it could be closer to 75 percent. But I really think that framing misses the point because it treats orals as if they are competing head-to-head with injectables.

They’re not.

So in this issue:

• Why orforglipron is okay, actually

• Wegovy is experiencing significant tailwinds

• Sponsorships

These are just the first skirmishes in a much, much bigger story. Over the next few issues I’ll be digging deeper into the divide between peptides and small molecules, and what that means for the future of obesity drugs. If you like to nerd out on this stuff, you’re in the right place.

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Wall Street Got Orforglipron Wrong. The market's knee-jerk reaction to orforglipron's Phase 3 data, which wiped nearly $100 billion off Eli Lilly's market cap, says more about Wall Street's tunnel vision than the drug's actual potential.

Yes, orforglipron's 9% placebo-adjusted weight loss came in below injectable Wegovy's 12.6%.

But treating a three-point gap like a disaster completely misses the point of oral GLP-1s.

Their job is not to out wegovy-wegovy, rather it’s to widen the funnel. Someone looking to lose 10-15 pounds on the lower end of the disease spectrum, or those who find weekly shots intimidating, are far more likely to start with a daily pill.

Once they’re in the “GLP-1 ecosystem”, I expect many will naturally progress to the more potent injectables like Zepbound when they hit weight loss plateaus. In that sense, this patient-led progression makes orforglipron a lead generator feeding Lilly’s ‘premium’ franchise.

The next challenge is keeping people in the ecosystem and this is where orforglipron will serve as an important retention tool. Patients who hit their goal weight on injectables struggle with the idea of weekly shots for life, and a pill is a much softer, more ‘digestible’ option for holding on to those gains and reducing relapse.

Lilly has shown particular foresight here, being the only pharma company asking the obvious but un-answered question: what does maintenance really mean?

The ATTAIN-MAINTAIN trial reframes obesity care as a two-stage journey — attain weight loss with high-potency injectables, and then maintain it with a lower-burden oral. If the data supports that model, Lilly will be selling the first treatment ladder for long term obesity care.

However, pricing is the elephant in the room because none of this matters if patients can’t actually afford the drug. In the insurance channel, Lilly will almost certainly follow the same playbook Novo Nordisk used with Rybelsus.

When Novo launched its first oral GLP-1, investors expected a discount, assuming a pill would be positioned below injectables. Instead, Novo priced Rybelsus at near-parity with Ozempic — roughly $770 a month — a decision cleverly designed to avoid the perception of being the “cheap alternative” and to protect the premium positioning of its injectable franchise. This preserved negotiating leverage with insurers, while the real price patients paid emerged through the familiar dance of rebates and backroom deals.

Lilly has every incentive to do the same with orforglipron.

If Lilly were to list the pill too low, payers could seize on that price point and force every patient through step therapy, requiring them to fail the oral before approving injectables which would of course cannibalize injectable sales.

To avoid that trap, Lilly will keep orforglipron’s list price at parity with injectables — roughly $900 to $1,300 a month and let the true net price shake out quietly in negotiations.

This probably means high list price for optics.

But cash-pay is where things get very interesting. On the last earnings call, CEO David Ricks hinted at “consumer-level pricing” for orforglipron which is code for going straight to millions of uninsured or underinsured patients.

Zepbound has shown how powerful this can be, with cash-pay accounting for one in five total prescriptions and more than a third of new ones in Q2. The difference is that orforglipron, as a small molecule with rock-bottom manufacturing costs, gives Lilly far more flexibility.

If Zepbound can thrive at $349 a month, orforglipron could plausibly come in at $150–300 which is low enough to capture uninsured demand at scale.

These manufacturing advantages matter even more from a public health stand point. By 2035, nearly 80% of adults with overweight or obesity will live in low- and middle-income countries. These are the markets where weekly peptide injections can’t scale because they require cold-chain storage and reliable infrastructure for transportation. Most emerging economies won’t have that, especially in hotter regions where maintaining refrigeration is extremely difficult.

This is why orforglipron is so compelling. It can be manufactured in standard pill plants, stored at room temperature, and shipped anywhere. Oral semaglutide, by contrast, is far more complex and expensive to make. It requires unusually high amounts of API per pill — orders of magnitude higher than injectables — which drives up cost of goods and limits scalability. On top of that, patients must fast for at least 30 minutes after taking it, a daily friction point that makes long-term adherence harder. Orforglipron avoids both problems which in my view makes it the only oral GLP-1 candidate with a credible path to solving the global obesity epidemic.

Wegovy sells. UK online pharmacy CheqUp reported a 27-fold surge in Wegovy sales — a 2,660% jump compared with the daily average in July— with the lowest dose up more than 2,200% as new patients flood in.

The positive development is the result of a uniquely favourable set of tailwinds. First, Eli Lilly’s UK price hikes created a clear cost advantage for Wegovy. Second, the timing coincided with the post-summer health reset when people return from the holidays and decide to commit to constructive action after two months of sun and fun.

This is a very interesting seasonal pattern that shows up clearly in GLP-1 initiation and refill data.

The increase in sales for Wegovy is predictable enough, as I wrote about in detail last week. But the real question still is whether the company can sustain momentum. Price shocks and seasonal resets can fill the funnel in the short term, but the longer game is still supply and access.

Novo has the wind at its back, but a) for how long? and b) can they keep up with the demand now or will there be another shortage? Time will tell.

Sponsorships. For the first time, I’m opening up a sponsor slot for the autumn. In the past three months, this newsletter has grown beyond all expectations, and now lands in the inboxes of 1,100+ founders, investors, and senior health tech executives. These are the people writing the cheques, building the companies, and shaping the future of healthcare. If you want your brand in front of them, email me at ash.sharma@live.co.uk.

**The views, opinions, and recommendations expressed in this essay are solely my own and do not represent the views, policies, or positions of my employer or any other organization with which I am affiliated. This content is provided for informational purposes only and should not be considered medical, legal or investment advice.**

When I was 14, I spent my weekends binge-watching Breaking the Magician's Code on Sky TV. My teenage brain learned that all great magic can be boiled down to one thing: misdirection. Wave your left hand in the air while your right hand pulls off the trick.

September's 170% price hike for Mounjaro in the UK is the same type of misdirection.

American audiences might see the headlines and assume this means cheaper drugs back home. In reality, nothing has changed: The NHS won’t pay a penny more. The U.S. patients won’t pay a penny less.

The only people whose pockets will get lighter are British private patients staring down at a £330 invoice.

The Reality

Lilly’s move is a response to political pressure from Donald Trump, who in July gave the CEOs of 17 major pharma companies — including Lilly and Novo— 60 days to lower U.S. drug prices by aligning them with the list price of developed nations.

Or else.

Or else what? Trump never specified. So, like something out of The Godfather, the ambiguity was kind of the point.

Lilly's response was to give him the optics he wanted by changing the number Trump could see, not the one that mattered.

The list price—Trump's number—is the price of the drug before any rebates or discounts are applied. The real price—the net price—is negotiated in secret, especially with buyers who have leverage.

As the single payer for prescription drugs for nearly 70 million people, the NHS has enormous leverage. For Mounjaro to be used at scale, NICE must judge it cost-effective at the list price. If it doesn’t, Lilly faces losing the entire UK market, so it’s expected to offer confidential rebates and discounts that bring the net price down to a level the Treasury will actually accept.

Even with Mounjaro's price jump, the NHS will shrug its shoulders. Its confidential rebates will stretch further, keeping costs flat—or as drug-pricing expert Bryce Platt told me:

"The UK is now getting a much bigger discount.

Unlike Britain’s single negotiator, America has thousands of insurance plans working through a handful of PBMs who negotiate drug prices. Those multi-year locked in deals aren’t suddenly going to change because the UK list price moves. It’s absurd to even think it would.

So American patients will keep paying what they’ve always paid.

If Washington really wanted to move the needle for US pricing, it would stop fixating on list prices in Europe and other developed nations and, instead, start demanding Britain’s deal. Get the NHS-level discount applied to U.S. contracts and then make them public.

The Mechanics

The new price tag of Mounjaro is roughly on par with what Americans pay out of pocket through LillyDirect’s cashpay channel. That gives David Ricks, the CEO of Eli Lilly, a big, visible number to point to when asked how the company is narrowing the gap between U.S. and foreign drug prices.

The irony, of course, is that instead of lowering U.S. cash-pay prices, he just raised Britain’s and handed policy hawks a soundbite to sell to their voters.

The optics may indeed play well in Washington, but in Britain, the consequences are pretty devastating. Around 1.5 million people are now on GLP-1s, and roughly 90% get them through online pharmacies.

Unlike the NHS, these private providers have little bargaining power.

Most buy at list price through wholesalers like Alliance or AAH, who might offer a tiny sliver of discount. When Lilly raises that list, the cost flows down the value chain — wholesaler to pharmacy to patient — with pharmacies adding their own margin to survive.

In theory, I think the largest-volume players could cut deals with Lilly and keep prices competitive, creating a winner-takes-all market because the vast majority of smaller providers don’t have that kind of muscle.

The discounts will probably be fragile, though, since Lilly can pull them back at any moment.

On the whole, the list price hike feels like Armageddon, not just for the private market, but, more importantly, for the patients who depend on them.

The Victims

At £330 a month for the higher doses, hundreds of thousands of people are going to be forced off treatment. On a median post-tax salary of about £2,400, Mounjaro’s new price would eat nearly 14% of monthly income, which is roughly the size of a car-payment or a portion of council tax. For a price-sensitive market like GLP-1, that is just not sustainable in any way, shape, or form.

What about Wegovy?

Private providers are already steering patients toward Wegovy. On paper, yes, it looks like the obvious choice. The new 7.2mg dose narrows the placebo-adjusted weight loss gap to just a few percentage points against Mounjaro, which’ll make it highly effective.

Weight loss is good, but the issue will be side effects.

Mounjaro has the best side-effect profile on the market, bar none. Going from a drug that has best-in-class tolerability to a drug that doesn’t is going to be rough for many people.

And in particular, I worry about the vomiting rates, which is about six percentage points higher on Wegovy than on Mounjaro. That’s a big red flag.

Vomiting is the side effect most likely to drive patients off treatment and cripple retention.

It’s going to be even more important to be upfront and remind patients that these types of GI side effects usually show up when the dose is increased, and fade after a few weeks as the body gets used to the medication.

In blunter words, you kind of need to push through it.

The Alternative

But this all assumes Novo Nordisk can actually meet a sudden surge in demand. I would argue that’s far from certain.

Wegovy has already faced repeated shortages, and scaling API production takes months. If we assume 1 million people are on Mounjaro and estimate that 35% of them will make the switch… Novo needs to prepare for 350k monthly subscriptions in the space of 2-ish weeks.

If supply can't keep up, providers will fall back on older GLP-1s like liraglutide, which is a daily jab for only 4-6% placebo-adjusted weight loss after 12 months. Disappointed by the weaker results and daily injections, I think many patients will simply quit or turn to unregulated channels, like they've done in the US.

Then there’s the very real strategic risk.

For two years, Novo has been quick to follow Lilli but slow to execute. First it was behind on D2C cashpay channels, then vial launches and then telehealth partnerships.

Now that Lilly is first again in placating Trump's demands and stealing the optics, I find it very difficult to imagine that Novo Nordisk won’t follow suit. After all, they both received the same 60-day ultimatum from Trump.

So, in the short term, I anticipate that Novo might enjoy a reasonable sales tailwind from the UK market, but over the medium to long term, the price floor for GLP-1s could rise across the category.

For online providers, this is now an existential test.

Large, diversified players can offset the UK hit with growth in earlier-stage GLP-1 markets abroad. Smaller UK-only operators, running on thin margins and with little leverage over wholesalers or Lilly, will be forced to rethink their strategy or shut down.

Conclusion

In the end, it’s the patients who are hit hardest. Scroll through Reddit, and you sense the real tragedy of people who are being forced to quit life-changing medications because of a couple of headlines.

'Can't afford it anymore. What do I do?'

'Try the black market.'

'Maybe if I take half doses?'

Literally collateral damage to political theater.

If there’s any silver lining, it’s that moments like this create political pressure. The longer the NHS relies on staged rollouts, the louder the calls will get for Wes Streeting to accelerate partnerships with online providers for a faster rollout of GLP-1s to the public.

In the meantime, when you see a headline about drug companies narrowing the price gap, look a little closer. What is the misdirection? And who, actually, pays the price to maintain it?

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**The views, opinions, and recommendations expressed in this essay are solely my own and do not represent the views, policies, or positions of my employer or any other organization with which I am affiliated. This content is provided for informational purposes only and should not be considered medical, legal or investment advice.**

Ten days of silent meditation and the first thing the universe shows me is Novo Nordisk hemorrhaging $70B in market cap, the worst single day drop in in 40 years. The market gods, it seems, have quite the sense of humour. My one immediate thought was:

What in the hell did I miss?!

The answer, of course, was compounded semaglutide. Novo dropped its 2025 growth outlook from ~ 21 % to ~14% after Ozempic and Wegovy sales slowed in the US.

And since American GLP-1 sales are Novo’s primary cash generator, even a small ripple sends a mighty shockwave through the P&L.

According to the Outsourcing Facilities Association (OFA) data, 80 million compounded semaglutide prescriptions were dispensed in 2024. Logic would suggest these numbers would plummet once Novo Nordisk resolved their supply issues and the FDA officially ended the shortage designation.

But that's not what happened.

In their latest earnings call, Novo executives were vague about specific numbers but confirmed that compounded semaglutide was exceeding 1 million prescriptions.

Privately, every analyst I talk to thinks that number is multiples higher.

I also got the feeling there was wide-spread frustration and anger about the situation, but what made me raise my eyebrows was their apparent strategy of hoping the FDA would ride in and save the day by cracking down on Hims & Hers, and other compounders utilizing Section 503A of the FD&C act.

For a company of Novo's sophistication, betting on regulatory enforcement felt bizarrely passive.

And ultimately, I think this is a massive gamble.

Let me explain why.

The FDA Can't Save Novo (Even If It Wanted To)

The FDA's capacity for enforcement has been decimated. The Department of Health and Human Services (HHS) just terminated roughly 3,500 FDA employees , which is about 20% of the agency's workforce. This includes:

• Key staff responsible for inspecting compounding facilities

• Laboratory teams who test imported API batches

• Field investigators who track illegal supply chains

This makes the recent bipartisan push for FDA enforcement particularly ironic. Republican Senator Richard Hudson is leading efforts demanding the FDA crack down on ‘illegal’ semaglutide.

My immediate question is: How exactly?

Who’s left at the agency to enforce the rules if the labs are dark and the inspectors are quite literally gone?

But even beyond capacity constraints, the FDA faces a political nightmare. At $499 per month through NovoCare, Wegovy is well beyond what most Americans can stomach (pun not intended).

When wallets decide, safety slogans lose. Compounders ship “personalised” semaglutide for roughly $200, and consumers are voting with their wallets.

If the FDA swoops in now, headlines will scream Regulator Kills Cheaper Weight-Loss Drug. That’s a gift-wrapped talking point for every politician eager to bash Big Pharma (ahem, RFK). Hims & Hers has already primed the narrative by touting real-world data from 13,000 users that shows compounded semaglutide achieves the same-ish results as Wegovy (I don’t agree with the methodology, I’m just pointing it out).

Fair or not, the optics would be absolutely brutal.

As Dartmouth professor Jeffrey Parker explained in Bloomberg’s podcast Hims Won’t Let Go of Its Wonder Drug:

"This is a playbook straight from other unicorns like Uber and Airbnb—exploit regulatory grey areas to quickly build a loyal user base, then leverage those users to push back against regulation once it finally arrives."

With public trust in the FDA already down 12 percent since 2023, the agency can ill afford another firestorm branding it as a guardian of pharma profits over patient access.

So if I’m right and the FDA doesn’t act, what happens to Novo’s GLP-1 pipeline if 503A compounding is allowed to continue?

The Compounding Playbook Will Cannibalize Novo's Pipeline

As I’ve written before, Hims have strategically interpreted section 503A of the FD&C act to their advantage by using common side effects encountered with semaglutide, such as nausea and vomiting, as justification for offering slightly tweaked dosages.

This small tweak transforms a commercially available drug into a "personalized" formulation, allowing Hims to scale production far beyond the intended regulatory limits.

Now, apply this same logic to Novo’s upcoming GLP-1 meds.

What's stopping compounders from hijacking oral Wegovy (semaglutide) and CagriSema the moment they launch?

Let’s spotlight oral semaglutide for a moment. It’s launch in the US is expected in Q4 2025 and it’s essentially a higher-dose version of Rybelsus, a GLP-1 drug for type 2 diabetes that’s been on the market for years.

Like Rybelsus, it’s taken as a pill each morning on an empty stomach, and you must wait 30 minutes before eating or drinking- an inconvenience, not a deal breaker.

In return, oral semaglutide presents Novo with another opportunity to secure launching the first EVER oral GLP-1 medication specifically approved for obesity.

This is big news! and I’m excited by it.

I think once oral versions hit the market, we'll see adoption accelerate dramatically. Like warp speed. The psychological barrier drops when you can take a weight loss pill just like a daily blood pressure medication. And most of all, no injections!

Within a year I suspect oral GLP-1s will become so ubiquitous that we'll forget there was ever a debate about their social acceptability. The conversation will shift from "Should people take these?" to "Which brand works best for you?"

But…Oral semaglutide carries a similar nausea, vomiting, and GI side-effect profile to Wegovy.

That “problem” is exactly the opening compounders love.

Hims can (and almost certainly will) argue that micro-dosing or custom titration “personalizes” therapy and improves tolerability, then pump out mass-scale pills under the 503A banner.

Or, they’ll compound the oral drug into a sublingual medication. All is within the realm of possibility that would undermine Novo's first-mover advantage and eat into their expected blockbuster revenues.

Skeptics might argue compounders can’t truly scale unless the branded drug first lands on the FDA’s shortage list. And only then do API exporters in China and India crank up production. (See the spike in Chinese semaglutide API exports the moment the 2024 shortage was declared.)

That defence falls flat on it’s face if Novo stock the shelves.

Oral sema’s convenience plus incoming Medicare/Medicaid coverage could very feasibly unleash demand from 70 million American patients within two years. Can Novo’s plants really smash out tablets fast enough to dodge another shortage label and the compounding free-for-all that follows?

If the answer is no, we rerun the entire 2024 saga. And betting on an understaffed, underfunded FDA to police it all is wishful thinking.

At this point Novo has two choices: keep bleeding market share and watch its multi-billion dollar pipeline go down the drain or swing the patent-litigation hammer.

The aggressive choice

Patents are quite literally the backbone of pharmaceutical innovation. They grant inventors exclusive rights to manufacture and sell novel, useful drugs. For Ozempic and Wegovy, Novo holds multiple patents covering both the semaglutide molecule and the delivery devices.

Patent infringement occurs when another party uses, manufactures, sells, or imports a patented invention without explicit permission, triggering legal action aimed at enforcing patent rights.

According to Morgan Stanley's discussions with IP lawyers, there's a critical legal case to be made that Section 503A compounding does NOT override patent infringement claims. More importantly, a 2024 law review from the Washington University School of Law stated that the FDA has no jurisdiction over patent law and no power to immunize compounding pharmacies from liability for patent infringement.

Essentially, patent litigation bypasses the inaction of the FDA entirely.

Patent infringement would also send an unequivocal message that Novo is serious, finally, about safeguarding its IP and revenue streams. Even the threat of IP infringement is enough to make the boldest of CEO’s run away and hide.

It would also spook HIMS investors and trigger massive stock price declines with radical behaviour changes in the industry.

So the question is, why hasn’t Novo pursued this yet?

Quite simply, there are “no examples of patent infringement lawsuits brought by drug manufacturers against compounding pharmacies that have reached trial or substantive judgments by courts.” And there is no guarantee that Novo would win.

It might also be true that Novo’s patents on Ozempic and Wegovy might be vulnerable to a counter claim and they could lose patent rights to Semaglutide.

What’s the alternative?

Is patent litigation like pressing the red button? Yes. It’s essentially a binary decision where you either lose, and you lose billions, or you win and you make the other guy pay billions.

A strategist friend likes to remind me that “war is a ladder”; you climb the lower rung with proxies first, and save your biggest, most destructive tool when you’ve exhausted every other option. Novo has already climbed:

1. PR “copycat” and “knock-off” soundbites to congress→ Barely dented telehealth sign-ups

2. Cease and desist letters→ Closed a few mum and dad pharmacies

3. Lanham Act lawsuits→ Hundreds filed but most end in big pharma losing or settlements that set no legal precedent.

4. FDA lobbying → $3 Million spent this year, 3,500 inspectors cut, Section 503A still unenforced.

Is the final rung worth it? Let’s see…

Will Hims & Hers simply choose to stop compounding voluntarily? Clearly, no. Compounding accounts for 30-40% of Hims' entire revenue and they're not walking away from billions voluntarily.

Could Novo drop their prices? Sure, but doing so would destroy the very economics that fund drug discovery. When a company invests decades into a molecule, the exclusivity window is its only shot at ROI. Erase that margin and the pipeline behind semaglutide, oral Sema, CagriSema, the next-gen GLP-1s never gets made.

Conclusion

Given the stakes, the risk of patent litigation are worth it. With oral semaglutide launching in Q4 and positioned to unlock a massive new market, the window for action is closing fast and Novo need to get a move on.

The question isn't whether they can afford to sue, it's whether they can afford not to.

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**The views, opinions, and recommendations expressed in this essay are solely my own and do not represent the views, policies, or positions of my employer or any other organization with which I am affiliated. This content is provided for informational purposes only and should not be considered medical, legal or investment advice.**