Why Big Pharma Won't Quit the Diet. Who Will Win the Next Weight Loss Battle?

Chances are you know someone on a weight loss injectable. In fact, nearly 12% of Americans are using, or have used, a GLP-1 weight loss drug. That's about 1 in 8 people on Ozempic, Wegovy, Monjauro, or one of the several options currently available on the market.

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Millions of Americans are experiencing the benefits of these revolutionary weight loss drugs, and the pharmaceutical industry is anxious to innovate and release the next generation of GLP-1s. The next iteration is most likely an oral pill, a less invasive and easier-to-swallow version of the needle-based injectables currently available.

The applicability and attractiveness of weight loss drugs in pill form spell big business for the companies that can get Food & Drug Administration (FDA) approval first. While many companies are pursuing innovations in weight loss, Eli Lilly (NYSE: LLY) wants to win the next weight loss race with its oral GLP-1. Trailing closely is Novo Nordisk (NYSE: NVO), which will pose the stiffest competition.

In a total addressable market of more than $50 billion and steadily climbing, it's estimated that weight loss pills could account for 25% of the long-term market share. So, the company that can win the race to lose the needle is poised for massive gains. The effective oral versions from Eli Lilly and Novo Nordisk could soon receive FDA approval, perhaps even by the end of 2025. It seems likely these two pharmaceutical giants will continue to dominate the next generation of weight loss.

The next generation of weight loss is almost here

GLP-1s have a wide range of uses, ranging from treatment of type 2 diabetes to combating obesity. GLP-1s are often combined with other medications as well. Some unintended effects of usage have, thus far, included lowering of blood pressure, and reducing risk of cardiovascular disease, stroke, Alzheimer's and dementia. Some studies even show increased fertility with weight loss drugs.

Novo Nordisk's oral pill could be the first approved specifically for weight loss. It already has FDA approval for Rybelsus, a semaglutide pill to help people with type 2 diabetes. The company has applied for FDA approval and could get a decision by early 2026.

Eli Lilly also anticipates FDA approval by 2026, going so far as to make billions of doses ahead of time. Pending approval, the company will rapidly deploy the new oral pills to maintain pace with Novo Nordisk.

The market might not be as large as expected

Pharmaceutical companies have already made fortunes in GLP-1 prescriptions, but how long the gravy train will continue depends on a few factors. First, the long-term effects of GLP-1 use still need examination. Secondly, changing regulatory environments and the eventual expiration of patents pose serious risks to drug manufacturers. Pills may not be as effective as the GLP-1 shots. There may also be increased side effects related to gut issues.

There's also pressure to reduce prices, and as of November 2025, the Trump administration has announced a plan, along with Eli Lilly and Novo Nordisk, to lower weight loss prices to $149 per month. It was also announced that Medicare will cover these drugs going forward. Whether this is a net positive or negative for shareholders remains to be seen, as details of implementation remain unclear. Yet, the two companies will benefit from short-term relief from tariffs and favorable treatment from the FDA on future projects.

The price erosion could mean a smaller overall market size for drug manufacturers. Goldman Sachs believes this will flatten the growth trajectory so much that revenue may not hit the $100 billion mark at all by 2030.

Who should investors choose?

In the race to win the next generation in weight loss treatments, who should investors choose? As of this writing, Eli Lilly has a slight edge. That could change as Novo Nordisk is a formidable opponent, but both companies combined will dominate market share and earn billions in revenue as the GLP-1 market continues to grow to nine-figures and beyond over the coming decade.

Eli Lilly's stock is expensive, trading at a price-to-earnings ratio of nearly 50, but there could still be room to grow if the oral GLP-1 comes to market and injectables remain widely used throughout the world. The company also pays a $1.50 quarterly dividend, providing a sense of stability and growth for investors.

However, Novo Nordisk trades at a much more reasonable price point compared to Eli Lilly, but also has a significantly smaller market cap and $0.43 dividend. The company is also facing investor backlash as its early weight loss lead disappeared, thanks, in part, to Eli Lilly. Stakeholders want the company to be more aggressive in regaining the initial lead its flagship, Wegovy, carried through 2024.

Catie Hogan has no position in any of the stocks mentioned. The Motley Fool recommends Novo Nordisk. The Motley Fool has a disclosure policy.