What Kinds of Disruption are GLP-1s Expected to Face

A recent report shows that US prescription drug spending is expected to surpass $1 trillion this year. This increase in spending is largely attributed to the increasing popularity of GLP-1 prescriptions.

The report details that prominent GLP-1s, such as Tirzepatide and semaglutide, are hitting about $60 billion in spending. This number more than doubles the spending on the third highest drug, apixaban.

Pharmaceutical Executive recently spoke with Kevin Dondarski, a partner at Deloitte Consulting, life sciences strategy practice. He recently participated in the company’s annual report “Measuring the Return on Pharmaceutical Innovation.” According to the report, GLP-1s account for a significant percentage of projected commercial inflows.

This is occurring at a time when the industry appears to be consolidating around drugs that Deloitte describes as “mega blockbusters,” with less than 10% of these drugs expected to generate about 70% of sales.

Pharmaceutical Executive: What kinds of disruption are GLP-1s expected to face?
Kevin Dondarski: It's largely to use an old cliché: there's always risk when you put too many eggs in one basket. I would say, for organizations that have had commercial success in a therapeutic area or in the disease area already, they're probably in a pretty good spot.

For organizations who are entering that area without the same degree of historical expertise across the value chain, there's naturally going to be a little bit more risk, just because it's harder to exceed in a very difficult domain like drug discovery and development without that nuanced expertise.

But, if you simply look at it from a pipeline standpoint, and given how large all these companies are, analysts are always looking at projected top line growth. With the outsized commercial projections associated with drugs in this class, good news is great, bad news is really bad.