Digital health companies launch GLP-1 programs

Beard, 47, had previously requested a prescription for GLP-1, but his doctor “wouldn’t even try” to get it approved, assuming his insurance company would deny coverage for the expensive drug, he said. she declared. GLP-1s cost about $1,000 per month before insurance and other discounts.

Clients of the Ro’s Body program could be prescribed a GLP-1, such as Novo Nordisk’s weight-loss drug Wegovy, or the diabetes treatment Ozempic, and meet monthly with a doctor. They also have access to a training program, 24/7 messaging, one-on-one coaching with nurses, and help navigating the complexities of insurance.

Beard weighed 210 pounds when she started the program early last year. She has since lost 40 pounds and is an ambassador for Ro. She pays $30 per month for GLP-1 treatment, after insurance coverage, plus a monthly fee of $145 for the program. And she has no intention of leaving.

“I’m fine if I have to stay there forever,” Beard told CNBC.

Ro, founded as Roman in 2017, is part of a growing group of digital health companies aiming to capitalize on growing demand for GLP-1 by creating programs and services for users in addition to medications. The opportunity could be huge. Analysts at Goldman Sachs expect 15 million U.S. adults to be taking obesity medications by 2030 and predict the industry could reach $100 billion in annual revenue by then.

Besides Wegovy and Ozempic, the GLP-1 class includes Eli Lilly’s wildly popular weight loss drug Zepbound and diabetes treatment Mounjaro. GLP-1 mimics a hormone produced in the gut to suppress a person’s appetite and regulate blood sugar levels.

Like Ro, other non-pharmaceutical manufacturers, including Calibrate, Sesame, Omada Health, Noom, Hims & Hers and even telehealth industry veterans Teladoc Health and WeightWatchers, have rolled out offerings aimed at patients on GLP-1 , or have expanded their services to include popular medications.

Meanwhile, investors are cheering them on.

Shares of Ro’s competitor, Hims & Hers, jumped 28% on May 20 after the company announced that it now offers injections compounded with GLP-1 in addition to its oral drug kits. CEO Andrew Dudum told CNBC the company is confident customers will be able to access a consistent supply of shots.

Supply shortages are one of the main obstacles for companies in the market, as high demand has made it difficult for many patients to access treatments. There has also been an increase in counterfeit products, according to the World Health Organization, which said in January that the combination of shortages and the “increased circulation of falsified versions” was particularly problematic for diabetes patients. type 2 who rely on this medication to treat their illness. management.

That’s not slowing down industry executives like Ro founder Zachariah Reitano.

Ro didn’t start as a weight loss-focused company. Reitano started it to sell erectile dysfunction treatments online before moving on to hair loss and other conditions.

In 2020, Ro shifted to obesity management, and after Wegovy was approved by the Food and Drug Administration the following year, Reitano said patient requests began pouring in by the “tens of thousands.” .

Today, Ro pours marketing dollars into its GLP-1 program — from digital ads, TV commercials and posters lining subway stations, to influencer campaigns featuring patients like Beard.

Reitano told CNBC that GLP-1s are like a “jetpack for positive behavior change.” Patients tend to exercise more, eat healthier and see about a 30% reduction in their calorie intake, he said.

“Once you get a little momentum, once you lose a little weight, you sleep better, you have more energy, you can go to the gym, you can eat better and then It’s this positive flywheel,” Reitano said.

Ro has raised approximately $1 billion in funding to date, according to PitchBook. The company was valued at around $7 billion in early 2022, although that was before a sharp decline in tech stocks and the collapse of the IPO market forced many startups to significantly scale back their valuations.

WeightWatchers has been in business for over 60 years and is perhaps the name most synonymous with weight loss programs in the United States.

In December, the company entered the GLP-1 market, with a behavioral support program available through its general subscription, starting at $23 per month. Members can participate whether they obtain a GLP-1 prescription from their primary care physician or through the new WeightWatchers clinic, introduced alongside the behavioral program.

Because GLP-1 suppresses appetite, WeightWatchers quickly realized it needed an entirely new program for people taking the drugs, said Gary Foster, the company’s chief scientific officer.

“They don’t need help knowing what to make for dessert or how to handle bread on a restaurant table,” Foster said in an interview. “That’s 50 to 60 percent of what we would do for people without medications.”

Clinic members who participate in the GLP-1 program must pay an additional fee – starting at $99 per month – for exclusive access to registered dietitians, fitness professionals and care team coordinators.

WeightWatchers said in its first-quarter results earlier this month that 87,000 people had signed up for the clinic, although not all take GLP-1. The company hopes to have between 140,000 and 160,000 clinic subscribers by the end of the year, according to the report.

It wasn’t enough to change WeightWatchers’ trajectory. The stock has fallen 83% this year on concerns about the company’s debt levels, its core weight-loss business and Oprah Winfrey’s reported departure from the board in February.

When it comes to GLP-1s and their impact on weight loss, “the landscape is pretty exciting,” Foster said. “I think we should all rejoice and really be excited about the fact that there are more tools in the toolbox to help people who are trying to manage their weight.”

Jennifer VanGilder, a 51-year-old economics professor at Ursinus College in Collegeville, Pa., said she has tried countless methods to lose weight, from strict diets to services like that of the late Jenny Craig. She considered bariatric surgery before stumbling across a program from digital health startup Calibrate.

Calibrate, founded in 2019, was one of the first companies to treat obesity by combining GLP-1 with individual coaching. The program costs $199 per month, not including medication, and requires an initial three-month commitment.

VanGilder signed up almost four years ago and began taking the weekly Ozempic injection for diabetes, specifically to lose weight. She then moved to Wegovy.

VanGilder said GLP-1s are not a miracle drug, but by taking them and working out, she reported losing about 100 pounds from her 242-pound weight. The big difference between Calibrate and previous weight loss efforts, VanGilder said, is that it doesn’t feel like she’s dieting.

“That’s why I was able to stay there this long,” VanGilder said.

Calibrate is one of the only companies that regularly releases reports detailing the results of its weight loss program. The company’s 2024 report looked at data from about 16,000 members who completed at least one year of the program as of October, as well as a smaller group of patients who continued longer.

The average weight loss among patients was 16.2% at 12 months into the program, 17.3% at 18 months and 17.9% at 24 months, according to the report.

“Our proven outcomes data shows that we can deliver faster and better results than some of the leading GLP-1 clinical trials,” Dr. Kristin Baier, Calibrate’s vice president of clinical development, said in an interview. .

But Calibrate has encountered major obstacles over the past two years.

After raising $100 million in venture capital at the height of the tech market in 2021, the combination of supply shortages, insurance issues and the broader market collapse forced the startup to lay off hundreds of employees between 2022 and 2023. The company was acquired in October. at a discount by private equity firm Madryn Asset Management.

Calibrate CEO Rob MacNaughton said the industry was “ill-equipped” to handle the “dramatic demand that led, at one point, to severely, severely constrained supply” of GLP-1 last year.

Under new ownership, the company continues to promote its GLP-1 service, which is considered important because the drugs themselves are not enough.

“GLP-1 drugs, while safe and effective, are a tool,” Baier said. “They are not the entire treatment.”

Reitano de Ro said shortages of Wegovy and other GLP-1s last year prompted his company to temporarily pause its advertising. Ro also provided refunds and credits to patients in his program who were unable to pick up their medications within 30 days of receiving a prescription, he said.

Reitano said Ro had put in place “both technical and operational tools” to help patients resolve supply issues. This includes transferring prescriptions to different pharmacies based on their GLP-1 supply and proximity to a patient. From July to August, the company made 50,000 phone calls to pharmacies across the United States to coordinate these transfers, Reitano said.

Ro also expanded its drug offerings, adding Zepbound following its approval in the United States in November.

“We added it to our formulary, and that’s when we started advertising again because we were confident that we would be able to offer an option to patients,” Reitano said .

Insurance issues persist, however.

Some employers have removed weight loss medications from their plans due to…