One particular type of drug has become a household name in recent times, and that's a class known as GLP-1. Originally approved for type 2 diabetes, these drugs also showed strengths in weight loss -- and that led to a surge in off-label prescriptions for this indication. Later, drugmakers won approval of these drugs specifically for weight loss.
Today, Eli Lilly and Novo Nordisk dominate the GLP-1 drug market, selling Zebound and Wegovy, respectively. These are injectables, but Lilly and Novo recently earned the regulatory nod for oral drugs -- Lilly now offers Foundayo, while Novo sells oral Wegovy.
These treatments have generated blockbuster revenue for the companies, and rivals, from biotech Viking Therapeutics to pharma giant Pfizer, are developing candidates and hope to eventually join them in this valuable market -- one forecast to approach $100 billion by the end of the decade. But is it possible that the next potential winner in the GLP-1 market may actually be a tech player? Let's find out.
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From e-commerce to publishing
This particular tech company is actually involved in a variety of industries, from e-commerce, publishing, and entertainment to physical grocery stores. I'm talking about Amazon (AMZN 1.19%) -- and one of the company's focuses in recent years has been on carving out a spot in the healthcare industry.
Today, Amazon One Medical and Amazon Pharmacy do just this -- the former offers both virtual and in-person medical appointments, while the latter allows patients to easily order prescriptions online. And now, Amazon is using these strengths to launch a new service that addresses the needs of patients who want to lose weight.
Amazon One Medical just announced a weight management program centered around GLP-1 treatment. The program views obesity as a chronic condition, offering patients a comprehensive offering tailored to their specific needs -- and integrating the weight loss journey into the patient's overall healthcare journey at Amazon One Medical. Patients turn to the service for pre-visit screening, prescriptions, follow-up consultations, and more. And all of this leverages the network Amazon has already built, including in-person and virtual medical care, pharmacy, and fast delivery of prescription drugs.
Through the program, patients can order popular GLP-1 medicines, including the latest launches Foundayo and oral Wegovy. Prices are on par with what is generally available elsewhere, but patients benefit from the convenience of organizing their entire weight loss program through Amazon One Medical -- and existing patients will like the promise of 24/7 prescription renewals. Another plus that may appeal to patients: Amazon says all medications are available for "fast delivery" throughout the U.S., and same-day delivery, now happening in almost 3,000 cities, is set to expand its reach.
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How Amazon may benefit from the GLP-1 boom
Now, let's consider our question: Could Amazon be the next big winner in the GLP-1 boom? This will depend on the number of patients who decide to choose Amazon to accompany them on the weight loss path. Amazon generates revenue through Amazon One Medical membership fees, as well as through certain visits and medical and pharmacy services. So its well-developed ecosystem of healthcare services could deliver growth if demand for the weight management program takes off.
There's reason to be optimistic about this program's potential due to the high demand for GLP-1 drugs -- and the fact that, at times, patients have had difficulty accessing these treatments. If Amazon makes it easy and convenient for them, the company may become the go-to destination for many patients.
Of course, given the revenue levels generated by Amazon's biggest profit driver, its cloud computing business, I don't expect GLP-1 drugs to become a massive growth engine for the entire company. Amazon Web Services (AWS), the cloud business, recently reached a $142 billion annual revenue run rate. That said, the weight loss program could become a significant driver for Amazon One Medical's growth -- and make Amazon one of the long-term winners in the growing GLP-1 market.
