The landscape of obesity treatment is transforming with the arrival of the highly effective medications, offering benefits far beyond weight loss. Glucagon-like peptide-1 (GLP-1) receptors, like Wegovy, Ozempic and Mounjaro, have shown excellent weight loss results in the obesity treatment market. However, the current cost of these drugs is relatively expensive, making them financially inaccessible to people who need them the most. Pharma companies can adopt many ways to make GLP-1 medicines accessible to the general population. One of them involves dramatically lowering the price of GLP-1 medications and adopting a mass-market commercial strategy that prioritizes population health. This approach would remove a significant barrier to access for those in need of effective treatment.
However, lowering the prices will lead to an increase in demand, thereby placing an excessive burden on the supply chain. Even at current demand levels, many patients with GLP-1 prescriptions are having difficulties obtaining refills. To effectively scale access, manufacturers should proactively address these supply constraints through several strategies.
Future-oriented demand forecasting
One of the primary barriers in scaling GLP-1 medicines is reliance on short-term demand projections. The current focus is on treating tens of millions of patients in the coming years, whereas there is a need to treat hundreds of millions more globally. Manufacturers should shift their forecasting methods and make long-term demand projections. Instead of using current access, their projections should be based on future patient populations. This method will be crucial in ensuring that supply can meet the demand without any major disruptions.
Encouraging public-private co-investment
To meet the large-scale production demands, government and private institutions must collaborate. This partnership can help fund infrastructure expansion, support manufacturing capabilities, and incentivize production at a global scale. Similar to what was seen during the COVID-19 vaccine rollout, where governments worked with pharmaceutical companies to increase production and distribution effectively. Additionally, the U.S. government’s CHIPS Act, which bolstered domestic semiconductor manufacturing, can serve as a strong model for how public-private investments can transform an industry’s supply chain.
Global technology licensing
A key strategy to overcome the supply problem is to give manufacturing licenses to manufacturers worldwide. The pharmaceutical industry needs to take inspiration from the tech sector, where big companies market and design products but rely on manufacturing partners for large-scale production. While some pharma companies partner with manufacturing partners for GLP-1 production, scaling this model by 10–20 times its current capacity could significantly improve availability and affordability.
Digitalization of supply chain
To gain a comprehensive understanding of potential weaknesses and challenges as the supply scales, it is important to implement robust digital tools and insights. This strategy involves digitalizing the manufacturing process and inventory management to optimize workflow and improve responsiveness to market demand. Apple’s sophisticated inventory management system highlights the importance of such an approach. Pharma companies can quickly adjust their production, whether they are manufacturing themselves or relying on external manufacturers. This means increasing or decreasing the output accordingly and avoiding shortages or excess stock. Additionally, it can help companies use their resources more efficiently and enhance environmental sustainability.
Pharma companies can overcome significant barriers to access the GLP-1 medications by addressing the supply chain challenges. Addressing these challenges requires a multi-faceted approach that involves demand forecasting, public-private investment, expanding manufacturing licenses, and digitalizing the supply chain. With these drug positioning strategies, pharma can ensure that GLP-1 medicines are easily available for the general population affected by obesity.
