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The rising popularity of the GLP-1 class of anti-obesity medications developed by prominent pharmaceutical companies can potentially expand the weight loss surgery market in the long run, as per Bernstein’s recent research note.
These treatments, marketed as Wegovy and Zepbound by Eli Lilly and Novo Nordisk respectively, have been linked to a decrease in the number of bariatric procedures performed to aid weight loss.
According to Bernstein, a survey of 50 bariatric surgeons in the U.S. revealed an average drop of approximately 11% in the number of weight loss procedures since the emergence of GLP-1 drugs.
Major companies including Intuitive Surgical, Medtronic, and Johnson & Johnson have observed similar effects, with shares of these firms coming under pressure due to the impact of GLP-1s on weight loss surgeries.
JNJ CEO Joaquin Duato highlighted the near-term impact of GLP-1s on weight loss surgeries during the company’s Q3 2023 earnings call, leading to pressure on surgery volumes in the short term.
However, Bernstein argues that it is premature to conclude that the rise of weight loss medications will come at the expense of bariatric procedures, as there is no consensus on the extent of long-term impact.
While concerns about affordability, coverage, side effects, and long-term drug adherence for GLP-1 drugs exist, Bernstein’s analysts believe that weight loss surgeries are becoming safer, quicker, more effective, and less costly.
Conversely, GLP-1 drugs could potentially make more patients eligible for bariatric surgery by aiding them to attain a safer BMI profile, thus reducing the risks associated with the procedure.
Medical technology firms such as Stryker, operating in the knee surgery market, have indicated a “neutral to slightly positive” impact on procedure volumes as weight loss drugs assist patients in achieving a safer BMI level.
Moreover, the recent interest in GLP-1 drugs can enhance public awareness of obesity as a chronic disease and educate patients about various treatment options, including surgery.
Ultimately, GLP-1s might actually act as a positive force for the growth of bariatric surgery over the longer term, concluded Bernstein.
