The Food and Drug Administration on Wednesday approved Eli Lilly‘s blockbuster drug tirzepatide for weight loss, paving the way for even wider use of the treatment in the U.S. 

The active ingredient in the drug, tirzepatide, has already been approved for the treatment of Type 2 diabetes under the name Mounjaro since May 2022.

But the FDA’s new approval means adults who have obesity or are overweight with at least one weight-related condition can use the drug, which will be marketed as Zepbound, for chronic weight management.

Zepbound should be available in the U.S. by the end of the year, and will carry a list price of about $1,060 for a month’s supply, according to a release from Eli Lilly.

Before Wednesday’s approval, many patients had used tirzepatide off-label for weight loss, adding to a frenzy of demand for treatments that can help patients shed pounds, such as Novo Nordisk‘s Wegovy and Ozempic. All three drugs have faced supply constraints for months due to soaring demand. 

The weight loss approval further establishes Eli Lilly as a formidable competitor to Novo Nordisk in the budding obesity drug market, which Wall Street analysts believe could grow to a $100 billion industry by 2030. The increased use of drugs has raised questions about how the changes will affect an array of industries — though it may be too early to tell how many people will use them.

The approval also comes as obesity affects an estimated 650 million adults globally, and roughly 40% of the adult population in the U.S. 

“Obesity and overweight are serious conditions that can be associated with some of the leading causes of death such as heart disease, stroke and diabetes,” said Dr. John Sharretts, director of the division of diabetes, lipid disorders, and obesity in the FDA’s Center for Drug Evaluation and Research. “In light of increasing rates of both obesity and overweight in the United States, today’s approval addresses an unmet medical need.” 

How well Zepbound works

Zepbound is an injection administered once weekly, and the dosage must be increased over four to 20 weeks to achieve the target dose sizes of 5, 10 or 15 milligrams per week.

The drug works by activating two naturally produced hormones in the body: glucagon-like peptide-1, known as GLP-1, and glucose-dependent insulinotropic polypeptide, or GIP.

The combination is said to slow the emptying of the stomach, making people feel full for longer and suppressing appetite by slowing hunger signals in the brain.

The FDA said the approval was based on two of Eli Lilly’s late-stage trials on tirzepatide, which evaluated its effects on weight loss after 72 weeks.

In a late-stage study of more than 2,500 adults with obesity but not diabetes, those taking 5 milligrams of tirzepatide for 72 weeks lost about 16% of their body weight on average. Higher doses of the drug were associated with even more weight loss, with a 15-milligram dose leading to 22.5% weight loss on average.

Another late-stage study found that tirzepatide caused up to 15.7% weight loss among people who are obese or overweight and have Type 2 diabetes.

Pricing, supply constraints

Still, access to tirzepatide and other diabetes and obesity treatments remains a big challenge. 

The list price of tirzepatide for weight loss is $1,059.87 per month for six different dose sizes, which is about 20% lower than that of Wegovy, Eli Lilly said in a press release. The company noted that the amount a patient pays out of pocket will likely be less if they have insurance. 

Eli Lilly also said it is launching a commercial savings card program to expand access to Zepbound, which could allow people with insurance coverage for the drug to pay as low as $25 for a one-month or three-month prescription. Meanwhile, those whose insurance does not cover Zepbound may be able to pay as low as $550 for those prescriptions.

“Broader access to these medicines is critical, which is why Lilly is committed to working with healthcare, government and industry partners to ensure people who may benefit from Zepbound can access it,” said Mike Mason, executive vice president and president of Eli Lilly Diabetes and Obesity, in a statement.

More CNBC health coverage

The bigger issue is that many insurance companies are dropping weight loss drugs from their plans. Those insurers cite the extreme costs of covering those medications, and some say they want to see more data demonstrating the health benefits of the drugs beyond losing weight. 

Preliminary data is already available: A recent late-stage trial found that Novo Nordisk’s weight loss drug Wegovy reduced the risk of cardiovascular events such as heart attack and stroke by 20%. The results suggest that Wegovy and similar drugs like Mounjaro could have long-lasting heart health benefits. 

Other challenges include the ongoing supply constraints on tirzepatide.

Eli Lilly last week said supply of Mounjaro has improved in the U.S. following months of widespread shortages, but noted that supply remains tight internationally. It’s unclear whether Zepbound’s entrance into the market will further strain supply of tirzepatide.

Eli Lilly said it is working to boost production capacity for tirzepatide amid increased demand.

This story is developing. Please check back for updates.

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