Morgan Stanley Research recently revised its projections for the global obesity drug market, estimating a potential peak of $150 billion by 2035—a sharp increase from its earlier forecast of $105 billion. The optimism stems from unprecedented sales growth: in 2024, obesity drugs already generated $15 billion in revenue, cementing their status as the hottest therapeutic category in healthcare.
The forecast, however, may be overlooking a critical factor: patient behavior and drug sustainability.
The Growth Story Driving Investor Hype
Obesity drugs, led by GLP-1 receptor agonists like semaglutide and tirzepatide, are revolutionizing how obesity is treated. Once seen primarily as lifestyle interventions, weight loss is now increasingly recognized as a medical necessity linked to chronic diseases such as diabetes and cardiovascular conditions.
Wall Street sees this as a multi-decade opportunity, with tens of millions of eligible patients worldwide. If adoption rates mirror those of blockbuster categories like cholesterol drugs in the 1990s, the $150 billion projection could seem conservative.
The Reality: Side Effects and Dropout Rates
But here’s what the numbers don’t fully capture: many patients don’t stay on these drugs long-term.
- High discontinuation rates – Studies suggest that as many as 50% of patients stop within the first year, often due to gastrointestinal side effects such as nausea, vomiting, and diarrhea.
- Rebound weight gain – Once patients discontinue, they most rapidly regain lost weight. Clinical trials and real-world evidence show that weight often returns within a year of stopping.
- Emotional and financial fatigue – The drugs require indefinite use to maintain benefits, which raises challenges for patients struggling with adherence, insurance coverage, or high out-of-pocket costs.
If large numbers of patients cycle on and off these drugs, the sustainable revenue base will be much smaller than Wall Street’s models predict.
A Market of Peaks and Valleys, Not Straight Lines
Rather than a smooth climb toward $150 billion, the obesity drug market could look more volatile:
- Initial surge: Millions of new patients will try these drugs, fueling short-term revenue spikes.
- Attrition phase: High discontinuation rates may lead to churn, as patients leave therapy after six months to a year.
- Re-entry effect: Some may return after regaining weight, creating repeated—but inconsistent—demand.
This cycle could generate huge sales, but it complicates the notion of a stable, ever-expanding market. Instead, it suggests a boom-bust rhythm where Wall Street’s linear growth curves may be misleading.
The Long-Term Outlook: Innovation Will Decide
The fundamental determinant of whether the market ever reaches $150 billion may rest on next-generation therapies. If drugmakers can:
- Reduce side effects,
- Provide oral formulations that are easier to take, and
- Demonstrate durable benefits even after discontinuation,
then the current forecasts could prove accurate—or even conservative. But without those breakthroughs, attrition will act as a ceiling.
The story of obesity drugs is one of enormous promise colliding with real-world complexity. Yes, demand is surging, and Wall Street is right to be bullish. But unless adherence challenges and post-discontinuation weight gain are addressed, the $150 billion figure may look more like aspiration than inevitability.
For now, the obesity drug market is less a gold rush and more a test: not just of how many people will start treatment, but of how many will stay on it.
