In short
“The Real Drivers of GLP-1 Growth” argues obesity/diabetes GLP-1 adoption is entering a new scalable phase (“GLP-1 unlock”) despite low current penetration.
Key claims
U.S. penetration is ~6% of eligible obesity patients; ~2% outside the U.S. Estimated peak market: ~$190B (bull ~$240B) across obesity and diabetes. Five growth drivers: shift to oral GLP-1s (just under 80% of oral users are new to the category), Medicare access with ~$50/month out-of-pocket potential, lower costs and rising employer coverage (out-of-pocket ~$120 vs $170; coverage ~50% to ~65% by 2027), global expansion (notably China and Brazil), and innovation beyond weight loss (cardiovascular, kidney, inflammation, neurological).
Notable examples
calorie consumption reduction estimated ~1.6% in the U.S. by 2035.
Guests
none mentioned; host is Terence Flynn (Morgan Stanley Head of U.S. Pharma and Biotech Research).
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOThe Current State and Future of GLP-1 Therapies
0:45 to 2:44
Discussion on the significant growth potential of GLP-1 therapies and their market drivers.
“Despite the surge in attention to GLP-1s in the last couple of years, penetration actually remains relatively low today.”
Implications of GLP-1 Adoption
2:44 to 3:56
Exploration of the broader implications of GLP-1 adoption on consumer behavior and chronic disease treatment.
“Well, globally, we estimate there are about 1.3 billion people eligible for these therapies.”
Transcript
Automatic transcript. May contain errors.0:00Welcome to Thoughts on the Market. I'm Terence Flynn, Morgan Stanley's Head of U.S. Pharma and Biotech Research. Today, the next phase of growth in obesity medicines, the GLP-1 unlock. It's Friday, April 17th at 2 p.m. in New York. There are moments in healthcare where innovation, policy, and patient demand all converge. And when they do, the impact can extend far beyond medicine. Now, we believe GLP-1 therapies are at one of those moments. We estimate that the obesity medications market could reach around$190 billion at peak across obesity and diabetes. Now, that's a meaningful step up from our prior expectations, and it reflects a shift from early adoption to a much broader, more scalable opportunity.
0:45Despite the surge in attention to GLP-1s in the last couple of years, penetration actually remains relatively low today. Only about 6 % of eligible obesity patients in the U.S. are currently using GLP-1 therapies, and just 2 % outside the U.S. So while the growth has been significant, the reality is that we're still early. And that's what makes this moment so important. So we see five drivers that are pushing the next phase of adoption. The first is a shift to oral medications. These therapies have historically been injectables, which limits adoption. But newer oral options are changing that. Notably, just under 80 % of oral GLP-1 users are new to the category, and this signals real market expansion.
1:31Second, expanding access through Medicare. A new U.S. framework is opening these drugs to millions of older patients, with out-of-pocket costs potentially around$50 per month. Now that's a meaningful shift, and one that could significantly broaden utilization. Third is lower costs and broader insurance coverage. We're already seeing progress here. Average monthly out-of-pocket costs have declined to about$120, down from$170 last year. Now, at the same time, employer coverage for obesity treatments is expected to rise from just under 50 % last year to around 65 % by 2027. Fourth is global expansion.
2:15Outside the U.S., adoption is more price sensitive, but the opportunity is large. As costs come down and access improves, especially in markets like China and Brazil, we expect uptake to accelerate. And fifth is innovation beyond weight loss. These therapies are increasingly being studied across a range of conditions, from cardiovascular and kidney disease to inflammation and neurological disorders. And that has the potential to further expand the addressable market over time. So how big could the GLP-1 market get? Well, globally, we estimate there are about 1.3 billion people eligible for these therapies.
2:52Now, our base case assumes roughly 12 % of the population is treated by 2035, including about 30 % penetration in the U.S. Now, even at those levels, we're looking at a$190 billion market with a potential bull case of around$240 billion.
3:10Terence Flynn:But the story doesn't stop at healthcare. We estimate GLP-1 adoption could reduce U.S. calorie consumption by about 1.6 % by 2035. Now, that may sound modest, but at a scale, it has real implications, with ripple effects across consumer behavior in industries like food, retail, and healthcare services. So stepping back, this is what defines the GLP-1 unlock. We're approaching a key inflection point that's driven by oral therapies, broader access, and ongoing innovation. With adoption still low relative to the eligible population, the growth runway remains significant. At its core, this is a long-term structural shift in how chronic disease is treated and how that reshapes markets.
3:56Thanks so much for listening. If you enjoy the show, please leave us a review wherever you listen and share thoughts on the market with a friend or colleague today.
4:17Terence Flynn:for you.
From the publisher
Our Head of U.S. Pharma and Biotech Terence Flynn discusses how the rapid pace of adoption of weight management treatments could have far-reaching implications across healthcare, consumer behavior and global markets.
Read more insights from Morgan Stanley.
----- Transcript -----
Welcome to Thoughts on the Market. I’m Terence Flynn, Morgan Stanley’s Head of U.S. Pharma and Biotech Research. Today: the next phase of growth in obesity medicines – the GLP-1 unlock.
It’s Friday, April 17th, at 2pm in New York.
There are moments in healthcare where innovation, policy, and patient demand all converge. And when they do, the impact can extend far beyond medicine. Now we believe GLP-1 therapies are at one of those moments. We estimate that the obesity medications market could reach around $190 billion at peak across obesity and diabetes. Now, that’s a meaningful step up from prior expectations – and it reflects a shift from early adoption to a much broader, more scalable opportunity.
Despite the surge in attention to GLP-1s in the last couple of years, penetration actually remains relatively low today. Only about 6 percent of eligible obesity patients in the U.S. are currently using GLP-1 therapies, and just 2 percent outside the U.S. So, while the growth has been significant, the reality is that we’re still early. And that’s what makes this moment so important.
So, we see five drivers that are pushing the next phase of adoption.
The first is a shift of oral medications. These therapies have historically been injectables, which limits adoption. But newer oral options are changing that. Notably, just under 80 percent of oral GLP-1 users are new to the category. And this signals real market expansion.
Second, expanding access through Medicare. A new U.S. framework is opening these drugs to millions of older patients, with out-of-pocket costs potentially around $50 per month. Now, that’s a meaningful shift, and one that could significantly broaden utilization.
Third is lower costs and broader insurance coverage. We’re already seeing progress here. Average monthly out-of-pocket costs have declined to about $120, down from $170 last year. Now, at the same time, employer coverage for obesity treatments is expected to rise from just under 50 percent last year to around 65 percent by 2027.
Fourth is global expansion. Outside the U.S., adoption is more price-sensitive, but the opportunity is large. As costs come down and access improves, especially in markets like China and Brazil, we expect uptake to accelerate.
And fifth is innovation beyond weight loss. These therapies are increasingly being studied across a range of conditions: from cardiovascular and kidney disease to inflammation and neurological disorders. And that has the potential to further expand the addressable market over time.
So how big could the GLP-1 market get? Well globally, we estimate there are about 1.3 billion people eligible for these therapies. Now our base case assumes roughly 12 percent of that population is treated by 2035, including about 30 percent penetration in the U.S. Now, even at those levels, we’re looking at a $190 billion market – with a potential bull case of around $240 billion.
But this story doesn’t stop at healthcare. We estimate GLP-1 adoption could reduce U.S. calorie consumption by about 1.6 percent by 2035. Now, that may sound modest, but at scale it has real implications, with ripple effects across consumer behavior and industries like food, retail, and healthcare services.
So, stepping back, this is what defines the GLP-1 unlock. We’re approaching a key inflection point that’s driven by oral therapies, broader access, and ongoing innovation. With adoption still low relative to the eligible population, the growth runway remains significant. At its core, this is a long-term structural shift in how chronic disease is treated, and how that reshapes markets.
Thanks so much for listening. If you enjoy the show, please leave us a review wherever you listen and share Thoughts on the Market with a friend or colleague today.