Liu Ping, a 25-year-old living in Beijing, is queuing up outside the obesity clinic of the Peking University People’s Hospital early one morning, seeking a doctor’s prescription for the so-called “skinny jab” — a weight loss drug that has created a buying frenzy in China, where half the adults out of a total population of 1.4 billion are either overweight or obese.

Like millions of others around the world striving to lose weight, Liu is holding out hope for the medication semaglutide, the generic name for a medicine better known globally as Ozempic. Heralded as a “miracle drug” in the war on weight, it has won praise from Western celebrities as diverse as Tesla’s Elon Musk and TV reality star Khloé Kardashian.

Made by Danish pharmaceutical company Novo Nordisk, Ozempic belongs to a class of medications known as glucagon-like peptide-1 receptor agonists, or GLP-1. It mimics the GLP-1 hormone, released in the gut in response to eating and has been used to regulate blood sugar levels to treat Type 2 diabetes.

Liu wasn’t always overweight. For him, the lockdowns that affected countless millions in China during the COVID-19 pandemic led to frequent overeating, a lack of exercise, and irregular work and life routines resulting in spiraling weight gain and Liu’s body mass index elevating to 28.

BMI is derived by dividing the weight in kilograms by the square of the person’s height in meters and is a key measurement in determining a healthy weight.

A figure of 28 puts Liu in the obese category, according to China’s public health guidelines, which define “normal” weight as a BMI of 18.5 to 23.9. Between 24 and 27.9 is “overweight,” and 28 and above is “obese,” according to the Chinese standards, which are a little lower than those set by the World Health Organization.

At least 2.8 million people die each year globally as a result of being overweight or obese, while an estimated 35.8 million or 2.3% global disability-adjusted life years (DALYs) — the loss of the equivalent of one year of full health — are caused by being overweight or obese, according to the WHO.

In China, expanding waistlines are the result of rapid urbanization and large-scale population migration, which have reshaped work and lifestyle habits, with labor-intensive jobs such as farming replaced by low physical exertion jobs in the manufacturing and service sectors, according to a July report in the Journal of Global Health.

That socioeconomic change has translated into the proportion of overweight and obese adults in China reaching 50.7% in 2022, according to the report, which cited the Chinese Nutrition Society.

Obesity ‘inevitable’

“Obesity is not the sin of an individual, rather it is almost inevitable in the development of society and the rise in economic levels,” said Li Guangwei, an endocrinologist at the China-Japan Friendship Hospital in Beijing.

Keen not to become a statistic, Liu has tried various methods to lose weight, but all have failed. In desperation, he’s turning to medicine.

“I can’t control my eating habits, and I struggle to exercise. What else can I do?” Liu lamented as he waited in line.

His BMI puts him squarely in the category recommended for drug intervention under medical supervision, according to guidelines from the Chinese Nutrition Society and Preventive Medicine Association.

Enter Ozempic. Approved for use in China in 2021 for Type 2 diabetes, it is a prescription medicine, although widely available to purchase online. The drug is administered by a subcutaneous injection once a week. A 2 milligram dose produced a weight reduction of 6.9 kilograms over 40 weeks, according to Novo Nordisk in a June 2021 study, which involved participants with a mean baseline body weight of 99.3 kilograms.

Designed primarily to treat adults with Type 2 diabetes by lowering blood sugar and reducing the risk of heart attack and stroke with heart disease, GLP-1 drugs could also help with weight loss, according to scientists, as they suppress the appetite and lengthen the amount of time food stays in the stomach.

The drugs have also shown promising results in areas such as treating kidney damage and non-alcoholic fatty liver disease.

“It is a miraculous rarity in the field of drug development,” said Ding Sheng, a professor at the school of pharmaceutical sciences at Tsinghua University in Beijing.

Several people on the medication told Caixin that they had lost about 10 kilograms one month after starting injections, with a greater amount of weight shed among those starting from a higher baseline weight.

GLP-1 is a game changer for traditional methods to treat obesity, said Alyssa Dominguez, an endocrinologist at the Keck Medical Center of the University of Southern California.

Doctors around the world have long believed a controlled diet and regular exercise are the keys to treating people who are overweight and obese, but with the addition of the medication, those efforts are more effective, said Dominguez.

Compared to lifestyle changes, which can require a significant investment of time and willpower, a seemingly one-stop fix-all medication offers a far more appealing route.

Cheap alternative

And then there is the cost advantage. While consulting a dietician will require three to six months of expensive consultations for weight loss of 5%-10%, a prescription for a GLP-1 drug can achieve similar results in the same period at a fraction of the cost, said Liu.

A three-to-six-month dietary plan issued by a doctor for Liu costs 7,000 yuan ($977) per month, compared with the 813 yuan per injection, he said.

Currently, the most popular GLP-1 shot used globally for weight loss besides semaglutide is liraglutide, which is also made by Novo Nordisk and marketed as Victoza and Saxenda.

American drugmaker Eli Lilly’s experimental drug tirzepatide has delivered promising data to compete with Novo Nordisk, with participants in a clinical trial losing up to 15.7% of body weight over 72 weeks, equivalent to 15.6 kilograms, according to results released in April.

And in China, Huadong Medicine Co. Ltd.’s liraglutide biosimilar injection and Shanghai Benemae Pharmaceutical Co.’s beinaglutide have recently been approved for the treatment of obese or overweight patients, becoming the only locally made GLP-1 available for that use, according to pharmaceutical news site BaiPharm.

The demand speaks for itself, with liraglutide in short supply.

“Significant demand for weight-management medicines has impacted the availability of Novo Nordisk obesity medications, including Saxenda,” according to the company’s website. “We continue to produce and ship all available Saxenda, but unfortunately, you may still have difficulty filling Saxenda prescriptions for the remainder of 2023 and beyond.”

The increasing popularity of GLP-1 drugs for weight loss has triggered a surge in capital markets, causing stock prices of many pharmaceutical and material suppliers to soar.

Driven by GLP-1 drug sales, stocks of Novo Nordisk and Eli Lilly have surged 43% and 51%, respectively, during the first 10 months of this year. That has made the pair the most valuable pharmaceutical firms in Europe and the U.S., respectively, according to a report last week by industry news site Fierce Pharma.

However, some market analysts have cautioned investors to remain calm, noting that an influx of new players into the market may reduce profit margins.

Meanwhile, health experts have warned against excessive use of the drug for weight control, especially with people of “normal” weight seeking injections for aesthetic purposes. Indeed, the Ozempic website makes it clear that weight loss is not the intended primary aim of the treatment.

“Ozempic is a medicine for adults with Type 2 diabetes that, along with diet and exercise, may improve blood sugar,” said the site. “While not for weight loss, Ozempic may help you lose some weight.”

But, as with all medicines, GLP-1 drugs can also cause side effects like nausea, vomiting, and indigestion, which could diminish tolerance among certain patients.

And as the body gradually adapts to the dosage, the appetite-suppressing effects of the medication will gradually diminish and eventually disappear, according to Ji Linong, director of the endocrinology department at Peking University People’s Hospital.

Some individuals attempting to lose weight by using the medication might end up heavier than before, said Ji, adding that GLP-1 drugs simultaneously reduce both fat and muscle.

Investor frenzy

The frenzy has also led to a surge in pharmaceutical stocks on China’s domestic markets, prompting regulators to issue several warnings regarding excessive speculation.

Since mid-September, a Wind Info index tracking stocks related to weight loss drugs in China’s A-share market has gained 31%. Companies like Shenzhen-listed Hebei Changshan Biochemical Pharmaceutical Co. Ltd., which is conducting clinical trials for experimental GLP-1 drugs, has seen its stock skyrocket more than threefold.

GLP-1 is not new. It was discovered in the 1980s and the world’s first GLP-1 receptor agonist, exenatide, was approved by the U.S. Food and Drug Administration in 2005 for the treatment of Type 2 diabetes.

The watershed moment came in 2021, when weight loss was added as a new indication for semaglutide in the U.S. and Novo Nordisk’s Wegovy — targeted specifically at helping people shed kilos — was launched in the U.S. with Denmark, Norway, Germany, U.K., and Iceland since following suit.

The company last week reported sales in the first nine months of diabetes and obesity products had increased 36% to $22 billion, mainly driven by GLP-1 diabetes sales growth of 45% and obesity care surging by 167%. The volume growth of the global branded obesity market was 93.6%, it said.

Such is the demand that JPMorgan in September revised its prediction for the global GLP-1 market for obesity, forecasting that by 2032, it will reach $71 billion, more than double the previous projection of $34 billion. At that time, the overall global GLP-1 market size is expected to reach $100 billion, it said.

The market for GLP-1 used as a weight loss treatment could grow into a market worth tens of billions of yuan in China in the coming years, analysts from Chinese brokerages like Caitong Securities and Citic Securities have predicted.

The medical projections support the forecast. By 2030, it’s anticipated that overweight and obese Chinese adults will reach 65.3% of the population, according to the Chinese Nutrition Society and Chinese Preventive Medicine Association

Consequently, by 2031, the market for GLP-1 drugs in obese patients in China will exceed 20 billion yuan, Sinolink Securities predicted in a research report published at the end of 2022.

Competition heats up

Some market analysts have sounded concerns over bubbles in the GLP-1 weight loss drug market as more players flood in.

Caixin calculates, based on data from DXY.cn-backed drug research database Insight that a total of 371 GLP-1 projects have been approved globally, 143 of which are specifically related to obesity indications to date.

Semaglutide is currently the most commonly used GLP-1 drug in treating obesity and was approved in 2021 for adult Type 2 diabetes patients in the Chinese mainland, where it was subsequently included under state medical insurance coverage.

The patent for semaglutide in China will expire in 2026, which is shaping up to be a key year for the drug’s sales in the country, as many domestic pharmaceutical companies line up to produce generic versions.

Within three to five years, numerous similar products are likely to be launched successively, potentially leading to a price war, a pharmaceutical industry investor told Caixin.

Chinese biotech firms are also actively involved in their own research and development of new GLP-1 candidates.

According to the Insight database, there are a total of 42 ongoing GLP-1 projects in China conducted by both domestic and international pharmaceutical companies, including clinical trials related to obesity indications. Most of these projects still prioritize the development for diabetes, including biosimilars of liraglutide and semaglutide.

Currently, there are only around 10 domestic companies, including Innovent Biologics Inc., Hangzhou Sciwind Biosciences Co. Ltd., and Jiangsu Hengrui Pharmaceuticals Co. Ltd., that have progressed obesity and weight reduction indications to phase 2 clinical trials or beyond.

Innovent Biologics is one of the fastest movers and is set to complete all three phases of clinical trials by 2024, with product launch expected in 2025, according to Gu Nan, a manager of a pharmaceutical investment fund.

For a “considerable length of time into the future,” the domestic weight loss market will be dominated by Novo Nordisk, Eli Lilly, and Innovent, a foreign pharmaceutical company sales agent told Caixin.

But carving out market share will not necessarily lead to profit as the prices of GLP-1 drugs have been brought down in China after they were included into the state insurance system.

For instance, Ozempic is priced at 813.96 yuan ($112) in China for the 1milligram dose. In the U.S., a product with the same specifications retails for $994.86, as per online pharmaceutical encyclopedia Drugs.com

“After the emergence of more semaglutide biosimilars, everyone can imagine what the prices will be like,” said Gu, who added that leading companies will engage in price wars that will make it difficult for enterprises with slower product development timelines to generate profits.

Diminishing returns

Diminishing returns from using the drugs for weight loss may also dent profits going forward.

Tian Xiao has lost 10 kilograms after taking liraglutide injections for 103 days, but the gains have been dropping off.

“The effects of the drug have been diminishing, while I have encountered side effects such as indigestion and hair loss,” Tian told Caixin.

Despite Tian’s BMI decreasing to 22.5, which is considered to be within a normal weight range, she has not stopped taking the medication as she is concerned about her weight rebounding.

Endocrinologist Dominguez confirmed the ephemeral benefits of the drugs: “The effectiveness of the drug is limited to the period of medication. After stopping the medication, weight gain often recurs,” she said.

The global medical community and regulatory agencies are still closely monitoring the risks associated with GLP-1 medications. Health experts including Dominguez and the People’s Hospital Ji have warned people who want to use the drug despite their BMI not meeting the criteria for weight loss.

“Being overweight is a lifestyle disease,” said China-Japan Friendship Hospital’s Li. “Without changing one’s lifestyle, no amount of medication will be effective.” Li added that obesity is associated with many severe conditions such as diabetes, coronary heart disease, and cancer.

Ji agreed. Controlling obesity requires the joint participation of the government and society to improve and create an environment that promotes healthy living for people, he said.

“We can’t create a problem and then try to solve it with drugs. That’s not a long-term solution,” said Ji.

This piece was originally published by Caixin Global. It is republished here with permission.

Reporters: Cui Xiaotian, Zhao Jinzhao, Zhou Xinda, Hua Ang, Cheng Xi, Tan Chen, and Han Wei.

(Header image: IC)