What GLP-1 drugs mean for medtech

Are the powerful weight loss and diabetes treatments a lose-lose for medical technology companies? Not necessarily.

The meteoric rise in popularity of a class of drugs for diabetes and weight loss has been weighing on medtech stocks. GLP-1 drugs like semaglutide (Ozempic®/Wegovy®) and tirzepatide (Mounjaro®/Zepbound®) spooked investors who feared that these treatments could disrupt a number of medical technologies, including surgical obesity interventions and orthopedics. We took a look at these drugs’ impact on the medtech sector for our forthcoming report, Medtech Trends to Watch in 2024, and found a more nuanced picture. Here are some of the report’s key findings:

  • Rapid adoption of GLP-1s for weight loss will impact obesity interventions like bariatric surgeries, but drug costs and reimbursement policies will be factors. GLP-1s will offer an attractive option to patients hesitant to undergo an invasive surgical procedure, and manufacturers like Medtronic and Johnson & Johnson anticipate a temporary dip in surgery volumes. However, the high cost associated with the drugs, along with spotty reimbursement and side effects, could prompt some patients to reconsider a surgical approach whose safety and efficacy are well understood.

    Device-based treatments for comorbidities associated with obesity will also see an impact. For example, sleep apnea is another possible indication for GLP-1 treatments, with tirzepatide in late-stage clinical trials for the condition.

  • The impact of GLP-1s on the medtech aesthetics market is likely to be mixed, benefiting some segments while undercutting others. As with bariatric surgery, more invasive fat reduction procedures like liposuction could see reductions as some patients opt for an injectable option, and some aesthetic physicians have already seen fewer patients coming in for even noninvasive fat reduction procedures, per Clarivate physician surveys. On the other hand, rapid weight loss can lead to reduced skin elasticity, which could drive demand for aesthetic injectable treatments like dermal fillers and complementary cosmetic procedures like skin tightening and rejuvenation.
  • Similarly, in the orthopedics space, use of GLP-1s could actually drive increased volumes of some procedures. Companies like Stryker and Smith & Nephew have acknowledged the potential of GLP-1s to impact the joint reconstructive implant market, but noted that the cost to patients of these drugs is likely to limit their reach. Meanwhile, the large joint reconstructive implant space could see an expanded pool of eligible patients as some who previously did not qualify for surgeries achieve the BMI levels necessary for surgery. These drugs could also enlarge the pool of candidates for major joint surgeries as patients become more physically active after achieving weight reductions, as Stryker has noted.

“The overall impact GLP-1 adoption will have on medical technologies is still a big question mark that will really hinge on long-term clinical data and coverage for the drugs, which so far has trended somewhat favorably. Device-based treatments will definitely be affected both directly, such as in the case of bariatric surgeries, and more downstream, in the case of treatments for conditions linked to obesity like heart disease and diabetes. However, weight loss in GLP-1 users also creates a bigger pool of patients eligible for certain surgeries who previously weren’t. Ultimately, all this points toward a shift in market dynamics rather than all-loss situation for medtech players.”

April Chan-Tsui, Director, Product Operations, Clarivate Medtech Insights

This and other key trends impacting the medtech industry are covered in a forthcoming Clarivate report, Medtech Trends to Watch in 2024, and will be discussed in a May 8 webinar, Medical Technologies to Watch 2024. You can register for the webinar here.