How digital health companies are capitalizing on the GLP-1 boom

For
Gray
Beard,
a
kindergarten
teacher
in
Charlotte,
North
Carolina,
losing
weight
had
become
a
grueling
task.
She’d
tried
five
different
programs
in
her
life
and
never
found
lasting
results.

Her
luck
started
to
change
last
year,
when
she
saw
a
promotion
on
Instagram
for
the

Ro
Body
Program,
a
new
offering
from
online
health
startup
Ro.
The
ad
said
eligible
patients
could
get
prescribed
GLP-1s,
the
buzzy
class
of
obesity
treatments
that’s
turned
into
a
booming
business
in
recent
years.

Beard,
47,
had
previously
sought
a
GLP-1
prescription,
but
her
doctor
“wouldn’t
even
try”
to
get
it
approved,
assuming
her
insurance
company
would
reject
coverage
of
the
costly
medication,
she
said.
GLP-1s
cost
roughly
$1,000
per
month
before
insurance
and
other
rebates. 

Customers
of
Ro’s
Body
Program
could
get
prescribed
a
GLP-1,
such
as


Novo
Nordisk
‘s
weight
loss
drug
Wegovy
or
diabetes
treatment
Ozempic,
and
meet
monthly
with
a
doctor.
They
also
get
access
to
an
educational
curriculum,
24/7
messaging,
one-on-one
coaching
with
nurses
and
assistance
with
navigating
insurance
complexities. 

Beard
was
210
pounds
when
she
first
started
the
program
early
last
year.
She’s
since
lost
40
pounds
and
serves
as
an
ambassador
for
Ro.
She
pays
$30
per
month
for
the
GLP-1
treatment,
after
insurance
coverage,
along
with
a
$145
monthly
fee
for
the
program.
And
she
has
no
plans
to
leave.

“I’m
fine
if
I
have
to
stay
on
it
forever,”
Beard
told
CNBC.

Ro,
founded
as
Roman
in
2017,
is
part
of
a
growing
crop
of
digital
health
companies
aiming
to
capitalize
on
the

soaring
demand
for
GLP-1s
by
building
programs
and
services
for
users
on
top
of
the
medications.
The
opportunity
could
be
massive.


Goldman
Sachs
analysts
expect
15
million
U.S.
adults
to
be
on
anti-obesity
drugs
by
2030,
and
predict
the
industry
could
reach
$100
billion
in
annual
revenue
by
that
time.

In
addition
to
Wegovy
and
Ozempic,
the
GLP-1
class
includes


Eli
Lilly’s
highly
popular
weight
loss
drug
Zepbound
and
diabetes
treatment
Mounjaro.
GLP-1s
mimic
a
hormone
produced
in
the
gut
to
suppress
a
person’s
appetite
and
regulate
blood
sugar.

Like
Ro,
other
non-drugmakers,
including
Calibrate,
Sesame,
Omada
Health,
Noom,


Hims
&
Hers
and
even
telehealth
industry
veterans


Teladoc
Health
and


WeightWatchers,
have
rolled
out
offerings
geared
toward
patients
on
GLP-1s,
or
have
expanded
their
services
to
include
the
popular
medications.

Meanwhile,
investors
are
cheering
them
on.

Shares
of
Ro
competitor
Hims
&
Hers
popped
28%
on
May
20
after
the
company
said
it’s
now

offering
compounded
GLP-1
injections
in
addition
to
its
oral
medication
kits.
CEO
Andrew
Dudum
told
CNBC
the
company
is
confident
customers
will
be
able
to
access
a
consistent
supply
of
the
injections. 

Supply
shortages
are
one
of
the
big
hurdles
for
companies
in
the
market,
as
spiking
demand
has
made
it
difficult
for
many
patients
to
access
the
treatments.
There’s
also
been
a
rise
of
counterfeit
products,
according
to
the
World
Health
Organization,
which

said
in
January
that
the
combination
of
shortages
and
the
“increased
circulation
of
falsified
versions”
is
particularly
problematic
for
patients
with
Type
2
diabetes
who
count
on
the
medication
for
disease
management.

That’s
not
slowing
down
industry
executives
like
Ro
founder
Zachariah
Reitano.

Ro
didn’t
start
out
as
a
company
focused
on
weight
loss.
Reitano
launched
it
to
sell
treatments
online
for
erectile
dysfunction
before
moving
on
to
hair
loss
and
other
pathologies.

In
2020,
Ro
switched
to
obesity
management
and,
after
Wegovy
was
approved
by
the
Food
and
Drug
Adminstration
the
following
year,
Reitano
said
patient
inquiries
started
pouring
in
by
the
“tens
of
thousands.”

Now,
Ro
is
shoveling
marketing
dollars
into
its
GLP-1
program
—
from
digital
ads,
TV
commercials
and
posters
lining
subway
stations,
to
influencer
campaigns
featuring
patients
such
as
Beard. 

Reitano
told
CNBC
that
GLP-1s
are
like
a
“jetpack
for
positive
behavior
change.”
Patients
tend
to
exercise
more,
eat
healthier
and
see
around
a
30%
reduction
in
calorie
intake,
he
said.

“Once
you
get
a
little
bit
of
momentum,
once
you
lose
a
little
bit
of
weight,
you’re
sleeping
better,
you
have
more
energy,
you
can
go
to
the
gym,
you
can
eat
better
and
then
that’s
that
positive
flywheel,”
Reitano
said.

Ro
has
raised
around

$1
billion
in
funding
to
date,
according
to
PitchBook.
The
company
was
valued
at
about

$7
billion
as
of
early
2022,
though
that
was
before
a
steep
drop
in
tech
stocks
and

collapse
in
the
initial
public
offering
market
forced
many
startups
to
dramatically
lower
their
valuations.

WeightWatchers
has
been
in
business
for
over
60
years
and
is
the
name
in
the
U.S.
perhaps
most
synonymous
with
weight
loss
programs.

In
December,
the
company
entered
the
GLP-1
market,
with
a
behavioral-support
program
that’s
available
through
its
general
membership
subscription,
starting
at
$23
per
month.
Members
can
participate
whether
they
get
a
GLP-1
prescription
through
their
primary
care
physician
or
through
the
new
WeightWatchers
Clinic,
introduced
alongside
the
behavioral
program.

Because
GLP-1s
suppress
appetites,
WeightWatchers
quickly
learned
that
it
needed
an
entirely
new
program
for
people
taking
the
meds,
said
Gary
Foster,
the
company’s
chief
scientific
officer.

“They
don’t
need
help
with
what
to
do
for
dessert
or
how
to
deal
with
the
bread
on
the
table
at
a
restaurant,”
Foster
said
in
an
interview.
“That’s
like
50-60%
of
what
we
would
do
for
people
without
meds.” 

Clinic
members
who
participate
in
the
GLP-1
program
have
to
pay
an
additional
fee
—
starting
at
$99
a
month
—
for
exclusive
access
to
registered
dieticians,
fitness
professionals
and
care
team
coordinators. 

WeightWatchers
said
in
its

first-quarter
results
earlier
this
month
that
87,000
people
had
subscribed
to
the
clinic,
although
not
all
of
them
are
taking
GLP-1s.
The
company
expects
to
have
between
140,000
and
160,000
clinic
subscribers
by
year-end,
the
report
said. 

It
hasn’t
been
enough
to
change
WeightWatchers’
trajectory.
The
stock
has
plummeted
83%
this
year
on
concerns
about
the
company’s
debt
load,
its
core
weight
loss
business
and
Oprah
Winfrey’s

announced
departure
from
the
board
in
February.

With
respect
to
GLP-1s
and
their
impact
on
weight
loss,
“the
landscape
is
quite
exciting,”
Foster
said.
“I
think
we
should
all
celebrate
and
really
be
delighted
by
the
fact
that
there
are
more
tools
in
the
toolbox
to
help
people
trying
to
manage
their
weight.” 

Jennifer
VanGilder,
a
51-year-old
economics
professor
at
Ursinus
College
in
Collegeville,
Pennsylvania,
said
she’d
tried
countless
methods
to
lose
weight,
from
strict
diets
to
services
like
the

defunct
Jenny
Craig.
She
was
considering
bariatric
surgery
before
she
came
across
a
program
from
digital
health
startup
Calibrate.   

Calibrate,
founded
in
2019,
was
one
of
the
first
companies
to
treat
obesity
by
combining
GLP-1s
with
one-on-one
coaching.
The
program
costs
$199
a
month,
which
doesn’t
include
the
medication,
and
requires
an
initial
three-month-long
commitment.

VanGilder
signed
up
nearly
four
years
ago
and
started
taking
the
weekly
diabetes
injection
Ozempic
specifically
for
weight
loss.
She
later
switched
to
Wegovy. 

VanGilder
said
GLP-1s
aren’t
a
miracle
drug,
but
by
taking
them
and
putting
in
the
work,
she
said
she
lost
around
100
pounds
of
her
242-pound
weight.
The
big
difference
between
Calibrate
and
prior
weight
loss
efforts,
VanGilder
said,
is
that
she
doesn’t
feel
like
she’s
dieting.

“That’s
why
I’ve
been
able
to
stay
on
it
for
as
long
as
I
have,”
VanGilder
said.

Calibrate
is
one
of
the
only
companies
to
regularly
release
reports
detailing
the
results
of
its
weight
loss
program.
The
company’s

2024
report
examined
data
from
roughly
16,000
members
who
completed
at
least
one
year
of
the
program
as
of
October,
along
with
a
smaller
group
of
patients
who
continued
for
longer. 

Average
weight
loss
among
patients
was
16.2%
at
12
months
in
the
program,
17.3%
at
18
months
and
17.9%
at
24
months,
according
to
the
report. 

“Our
data
of
proven
outcomes
shows
that
we
can
deliver
faster,
better
results
than
some
of
the
leading
GLP-1
clinical
trials,”
said
Dr.
Kristin
Baier,
Calibrate’s
vice
president
of
clinical
development,
in
an
interview.

But
Calibrate
has
hit
some
major
speed
bumps
in
the
past
couple
years.

After

raising
$100
million
in
venture
funding
during
the
peak
of
the
tech
market
in
2021,
the
combination
of
supply
shortages,
insurance
challenges
and
the
broader
market
swoon
forced
the
startup
to

lay
off
hundreds
of
employees
between
2022
and
2023.
The
company
was

acquired
in
October
at
a
discount
by
private
equity
firm
Madryn
Asset
Management.

Calibrate
CEO
Rob
MacNaughton
said
the
sector
was
“ill
equipped”
to
manage
the
“dramatic
demand
that
led
to,
at
some
point,
severely,
severely
constrained
supply”
of
GLP-1s
last
year. 

Under
new
ownership,
the
company
continues
to
promote
its
GLP-1
service,
which
its
said
is
important
because
the
drugs
themselves
aren’t
sufficient.

“GLP-1
medications,
while
they
are
safe
and
effective,
they
are
a
tool,”
said
Baier.
“They
are
not
the
entire
treatment.”

Ro’s
Reitano
said
shortages
of
Wegovy
and
other
GLP-1s
last
year
prompted
his
company
to
temporarily
pause
advertising.
Ro
also
dolled
out
refunds
and
credits
to
patients
in
its
program
who
weren’t
able
to
pick
up
their
medication
within
30
days
of
receiving
a
prescription,
he
said. 

Reitano
said
Ro
has
built
up
“both
technical
tools
and
operations”
to
help
patients
navigate
supply
issues.
That
includes
transferring
prescriptions
to
different
pharmacies
based
on
their
GLP-1
supply
and
proximity
to
a
patient.
From
July
to
August,
the
company
made
50,000
phone
calls
to
pharmacies
across
the
U.S.
to
coordinate
those
transfers,
Reitano
said. 

Ro
has
also
expanded
its
medication
offerings,
adding
Zepbound
following
its
U.S.
approval
in
November. 

“We
added
that
to
our
formulary,
and
that’s
really
when
we
started
advertising
again
because
we
had
confidence
that
we’d
be
able
to
get
patients
an
option,”
Reitano
said. 

Insurance
problems
persist,
though.

Some
employers
have
dropped
weight
loss
drugs
from
their
plans
due
to
the
costs
associated
with
covering
the
treatments
for
thousands
of
patients.
The
federal
Medicare
program
by
law
can’t
cover
weight
loss
drugs
unless
the
prescription
is
for
another
approved
health
benefit,
such
as
diabetes
or
cardiovascular
health. 

Eli
Lilly
and


Novo
Nordisk
offer
commercial
savings
card
programs
that
aim
to
expand
access
to
their
GLP-1s.
Eli
Lilly

allows
people
with
insurance
coverage
for
Zepbound
to
pay
as
low
as
$25
for
a
monthly
prescription.
And
users
who
can’t
get
insurance
coverage,
may
be
able
to
get
the
drug
for
as
low
as
$550
a
month.

The
high
costs
and
difficult
access
led
Hims
&
Hers
to
initially
stay
out
of
the
GLP-1
market
even
after

launching
its
new
weight
loss
program
in
December

Dr.
Craig
Primack,
senior
vice
president
of
weight
management
at
Hims,
said
the
company
decided
to
offer
treatment
regimens
based
on
drugs
that
had
been
studied
and
prescribed
for
decades.  

“We’re
going
to
have
people,
for
one
reason
or
another,
who
either
don’t
want
an
injection
at
this
point,
or
are
just
looking
for
a
different
alternative,”
Primack
told
CNBC
in
an
interview
in
March.
“These
are
tools
we’ve
been
using
in
our
field
for
a
long,
long
time.”

Last
week,
Hims
said
customers
can
now
access
compounded
GLP-1
medications
via
a
prescription
from
a
licensed
health-care
provider
on
the
platform.
Hims
said
it
plans
to
make
branded
GLP-1
medications
available
to
its
customers
once
supply
is
consistently
available.
The
company’s
oral
medication
kits
start
at
$79
a
month,
and
its
compounded
GLP-1
injections
will
start
at
$199
a
month.

Dudum
said
the
company
has
partnered
with
one
of
the
largest
generic
manufacturers
in
the
U.S.
and
has
a
certain
degree
of
exclusivity
with
the
facility.
The
manufacturer
has
FDA
oversight,
he
said. 

Even
before
Hims
introduced
compounded
GLP-1
injections
to
its
weight
loss
offering,
the
company

said
it
expects
the
program
will
generate
more
than
$100
million
in
revenue
by
the
end
of
2025.

Beard,
the
Ro
customer,
has
had
to
make
some
changes
since
starting
the
Body
Program.
She
initially
took
Wegovy
with
no
out-of-pocket
costs,
thanks
to
her
insurance
coverage
and
a
savings
card
program
from
Novo
Nordisk.
But
she
hit
a
plateau
on
the
drug,
so
she
switched
to
Zepbound. 

While
there
have
been
some
hiccups
along
the
way,
Beard
says
the
program
has
largely
been
a
“seamless”
addition
to
her
day-to-day
life,
and
that
she
no
longer
thinks
about
food
all
the
time.
She
even
got
a
family
member
to
enroll.

“We’re
not
having
any
bad
side
effects,
so
why
go
off
of
it?”
she
said,
adding
“it’s
helped
both
of
us
get
to
the
weight
we
want.”