There is a moment in the life of every blockbuster drug when the science stops being the interesting question and the invoice takes over. GLP-1s reached it this week, in three separate sections of the same newspaper.
Who pays for 13 million prescriptions
Roughly 13 million Americans now take GLP-1 medications, according to JPMorgan research from February. A drug class that size is not a specialty line anymore. It is infrastructure, and infrastructure shows up in somebody’s budget.
This week we learned whose. Medicare drug-plan premiums are rising because Part D plans have been hit by growing GLP-1 and specialty-drug expenses — and because 2022’s Inflation Reduction Act cut enrollees’ out-of-pocket costs while making insurers shoulder more.
The arithmetic for next year, per the administration itself: about 25% of Part D enrollees see premiums flat or down. About 30% see increases under $10 a month. The remaining 45% face increases largely in the $11 to $20 a month range. Those pressures run into 2027, said Juliette Cubanski of KFF.
Meanwhile the cushion is being pulled. A stabilization program cut the average Part D premium about 40% in 2025 and an estimated 27% this year — and the administration plans to end it. Put it together: the fastest-growing drug class in America is now a named cause of a rising bill for the country’s largest payer. Payers who can name the cause eventually negotiate the price.
Crowds, copies, and a founder’s warning
The competition picture came from a profile of Regeneron co-founder George Yancopoulos. On obesity, he was blunt: dozens of companies are racing to launch their own GLP-1 versions, and Chinese biotechs are replicating successful science fast. His question: “Do we need 168 GLPs?”
When a founder tells you the science is being copied by dozens of entrants, do not own the version of the trade whose entire value is the science. Volume growth in a crowded category with a squeezed payer is not a moat. It is a price negotiation with a countdown clock.
The more interesting idea is what the obesity race leaves behind. Patients on GLP-1s can lose significant muscle along with fat — a real risk for older adults who need strength to stay independent. Regeneron is building muscle-preservation drugs to pair with weight-loss shots, aiming at the quality of the weight lost. It even identified what Yancopoulos calls the “laziness gene” and is working on a drug to switch it off.
There is a darker file too. The Journal reported GLP-1s can sometimes trigger disordered eating — and anorexia kills a higher percentage of patients than any other eating disorder, second among mental illnesses only to opioid addiction. Novo Nordisk said it promotes only FDA-approved uses for appropriate patients; Eli Lilly said patient safety is its top priority. No label change has been announced. It belongs in the underwriting anyway.
The franchise war, in two numbers
Eli Lilly is up 14.3% in our fundamentals numbers this year. Novo Nordisk is down 2.2%. Same drug class, same calendar, sixteen points apart.
That is not a sector call. It is a franchise war with a winner. Lilly carries a pipeline — the Alzheimer’s program included — that Novo does not, and 13 million users is a base that does not un-prescribe quickly. Novo is the pure-play, and the copycat wave lands hardest on the pure-play already losing ground.
So: own the franchise leader, own the adjacency, rent the cheap option, and refuse to pay for the tail.