How Trump’s picks for top healthcare posts will affect the weight loss drug market

The news: President-elect Donald Trump’s nominations to lead key federal health agencies could cause concern for companies heavily invested in the booming weight loss drug market.

Catch up quick: Late last week, Trump tapped Dr. Marty Makary, a Johns Hopkins surgeon, for FDA commissioner. That followed his selections of Dr. Mehmet Oz for CMS administrator and Robert F. Kennedy, Jr. for HHS secretary. All three people will need to be confirmed by the Senate early next year.

Why it matters for drugmakers: The federal health agencies have immense influence over how medications are approved and how accessible they are for US consumers.

We’re particularly interested in how they could influence the exploding GLP-1 drug market, which is projected to reach $100 billion by 2030, per JP Morgan. The sector has attracted a growing number of companies developing and selling medications that could be consumed by around 9% of the US population by the end of the decade.

The trio’s sentiments on weight loss drugs: Of the three appointees, RFK is the most critical of obesity drugs, speaking out against a healthcare system that pushes prescription medications over nutrition. He and Makary appear aligned on their distrust of Big Pharma and concern over how much money is spent on GLP-1s.

RFK ripped Ozempic and drugmaker Novo Nordisk in a September post on X. He wrote that the drug fattens the wallets of Big Pharma but doesn’t address the obesity crisis at its root. He also told Fox News’s Greg Gutfeld that giving every American three good meals a day would be far less costly than giving overweight people GLP-1s and would “solve the obesity and diabetes epidemic overnight.”

Makary recently voiced criticisms of GLP-1s on The Megyn Kelly Show, including that they’re expensive, have side effects, and accelerate muscle loss. Similar to RFK, he has called out the Big Pharma and Big Food industries for prioritizing profits over consumer health.

But Oz is a proponent of GLP-1s. He’s touted semaglutide’s benefits on multiple social media channels while emphasizing the importance of making GLP-1s more affordable.

Our take: We’re not expecting a significant shake-up to the weight loss drug market in terms of reversing or slowing down drug approvals. However, we think that Trump’s healthcare team will try to limit government spending on GLP-1s.

The new administration could combat a Biden administration proposal announced this week that would require Medicare (which is currently prohibited by law from doing this) and Medicaid to cover GLP-1s for weight loss.

• Around 7.4 million members covered in the two federal health insurance programs would become eligible for the drugs.
• Expanded coverage would dramatically lower GLP-1 prices for patients but would cost the government billions of dollars each year. We estimate that Medicare and Medicaid will spend over $424 billion on prescription drugs across all their programs this year.

The RFK-led group will likely oppose the proposal and could instead push to allocate more federal dollars toward healthy food interventions for seniors and poor patients with obesity.

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