The GLP-1 Boom Is Creating Healthcare's Biggest Long-Term Growth Opportunity
GLP-1 weight-loss drugs started as a diabetes treatment but they are now being studied for Alzheimer's, addiction, kidney disease, and cancer. The market is accelerating, and the money is starting to move.
The duopoly with room to run
Eli Lilly and Novo Nordisk control the GLP-1 market today. Morgan Stanley recently raised its 2035 GLP-1 sales forecast from $150B to $190B for diabetes and obesity alone. That figure assumes 30% penetration among obese Americans by 2035, up from 6% last year.
For context, Pfizer's Covid-19 vaccine peaked near $40B in 2022. Merck's Keytruda does roughly $50B a year. The GLP-1 market is on track to dwarf both.
Two structural tailwinds are driving the acceleration. Medicare began covering obesity drugs on July 1, with a $50 monthly copay, replacing decades of federal prohibition.Employer coverage is also rising, from 44% of workplaces in 2024 to an estimated 65% next year.
Pills are expanding the total market
Novo launched the first oral GLP-1, a Wegovy pill, in January. Lilly followed in April with Foundayo, its branded version of orforglipron. Both companies report that more than three-quarters of pill users are new to GLP-1s entirely, they are not switching from injections.
The pills compete differently. Novo's pill has shown slightly better weight loss in trials but requires strict morning dosing with minimal water and a 30-minute food fast. Lilly's pill can be taken any time of day without food restrictions, giving it an advantage in markets where storage or routine adherence is harder.
Lilly holds roughly 60% of the injectable market. Novo has an early 85% share in pills, though total pill sales are still small. Pills are expected to represent about a quarter of the GLP-1 market by 2030.
The pipeline gap is widening
Lilly's next drug, retatrutide, targets three hormone receptors instead of two. In trials, patients on the maximum dose lost an average of 28% of body weight after 80 weeks.
That compares with 21% for Lilly's current Zepbound and 15% for Novo's Wegovy in separate trials. If the FDA approves it, retatrutide could launch as soon as late next year.
Novo's pipeline is under pressure. Its experimental heart drug ziltivekimab failed a late-stage trial this week, missing its primary endpoint for reducing major cardiovascular events.
Jefferies called the result "strategically negative" because it removes one of Novo's more credible non-obesity growth avenues.
Lilly's patent runway extends to 2036 on key US drugs. Novo's core patents expire in 2031. Generics are coming, but a UBS analysis of India (where semaglutide lost patent protection early this year) found that the global generic ecosystem can likely supply only 25%–30% of GLP-1 demand by 2030.
Compounders and collateral damage
About one in five GLP-1 users is still taking a non-FDA-approved compounded version, according to a Gallup survey. Compounded GLP-1s peaked at roughly 30% of the market in 2024.
The FDA proposed in May to exclude semaglutide and tirzepatide from large-scale compounding eligibility, which would be a significant win for the branded players if finalized.
The downstream effects are already visible. More than 1 in 10 American adults now takes a GLP-1, and food companies are losing volume as users shift toward protein, fresh foods, and cleaner labels.
General Mills and Kraft Heinz are both guiding to flat or declining sales. Conagra recently halved its dividend. Big Food stocks now trade at their widest discount to the S&P 500 in at least two decades.
Smaller biotech challengers are also entering the space. Structure Therapeutics has an oral GLP-1 drug advancing to late-stage trials.
Viking Therapeutics is developing both an injectable and oral rival to Zepbound, with a Phase 3 start planned for later this year. Amgen is working on a monthly injectable. None are yet profitable.
Demand for GLP-1 drugs continues to outpace supply, giving manufacturers strong pricing power. For investors, the biggest opportunity may still be ahead.
