GRAND ROUNDS

How Niches Will Shape the Crowded Weight Management Market

Digital health company Ro recently made two big announcements that have stirred the pot in the weight management space:

1. Fresh (and favorable) data on their The Body program.

2. A new partnership with Eli Lilly’s LillyDirect to offer Zepbound.

I’ve been following the weight management space closely since May 2022, when I published The Next Frontier of Weight Loss, comparing the advent of GLP-1/GIP medications to the invention of nuclear fusion. To say I’m excited about these developments would be an understatement.

If you’re new here or want to catch up on all my articles on weight management, you can find them here.

With Ro’s latest announcements, now feels like the perfect time to recap them and share my thoughts on where the digital health obesity care landscape is headed.

Ro Makes Two Significant Announcements

Ro published new data on their The Body program and a strategic partnership with Eli Lilly’s direct-to-consumer platform, LillyDirect.

The Body Program Results

Ro analyzed weight loss outcomes for a random sample of 475 Body members without diabetes who started treatment with branded semaglutide in 2023. To measure success, they focused on two key metrics:

1. Percentage weight loss: Weight data, self-reported by patients during onboarding and again around the one-year mark, showed 95% of patients lost at least 5% of their body weight, while 55% achieved a 15% or greater reduction.

2. Metabolic biomarker improvements: Among patients with baseline metabolic health risks, follow-up lab results (e.g., lipid panels) were collected. Of the 293 patients who opted in for follow-up labs, only 131 completed testing. Among these, 80% showed clinically significant improvements in at least one biomarker, with many shifting from “high” to “normal” levels.

These weight loss results align with what we’ve seen in RCTs like the STEP-1 Trial, which is encouraging.

That said, Ro’s findings should be taken with a grain of salt due to several biases and limitations:

• No Control Group: Ideally, there would be a comparison group of patients taking semaglutide but not participating in Ro’s Body Program. This would help us determine if the added benefits are from Ro’s telehealth services or simply reflect the well-documented efficacy of GLP-1 medications.

• Observational Study Design: Because this wasn’t a randomized controlled trial, the results may be influenced by confounding factors, such as patients’ baseline motivation, socioeconomic advantages, or prior access to weight loss care.

• Attrition Bias: The study only included patients who completed the 12-month program and follow-ups. Those who dropped out or didn’t comply were excluded, which likely skews the results to reflect a more successful subset of patients.

Despite these limitations, I have to give credit where it’s due: Ro conducting this type of study is a step in the right direction. Digital health companies often fail to back their solutions with evidence, something I’ve discussed at length in my article Are Digital Health Solutions Actually Solutions? . Evidence like this, even with its flaws, is essential for establishing credibility in the digital health space.

Ro Partners with Eli Lilly’s LillyDirect

Ro has teamed up with Eli Lilly to make accessing Zepbound easier through LillyDirect. Ro patients with an on-label prescription for Zepbound (meaning they’re prescribed the medication for obesity or overweight with at least one weight-related comorbidity) can now get single-dose vials delivered to their doorstep at LillyDirect’s self-pay prices:

• Zepbound 2.5 mg dose: $399/month

• Zepbound 5 mg dose: $549/month

But… Zepbound requires titration, meaning patients typically start with a lower dose and gradually increase to the 12.5 mg or 15 mg dose. I can’t imagine those higher doses will be anywhere near affordable at these price points.

Headwinds Facing Weight Management Space

As we head into 2025, I see two major headwinds digital health companies will face:

1. The Fate of Compounded GLP-1s

Nearly every digital health company is tapping into compounding pharmacies to make GLP-1s like semaglutide more affordable. Companies like Ro, Hims&Hers, Noom, Found, Lemonaid Health, and Sesame offer compounded versions, often for under $200 per month—a fraction of the out-of-pocket cost for the brand name.

However, the FDA removed Zepbound and Mounjaro from the drug shortage list in October. Technically, this means compounding pharmacies are no longer allowed to make compounded tirzepatide since there’s no longer a shortage. But for now, the FDA is letting them continue.

An update is expected on December 19th, and the big question is: Will the FDA crack down and stop pharmacies from compounding these GLP-1s? It’s inevitable this loophole will close at some point, so what happens to the digital health companies whose business models depend on offering compounded GLP-1s at lower prices?

2. A Very Saturated Weight Management Market

Everyone and their mother seems to be selling compounded GLP-1s, with countless digital health startups relying on these medications as the backbone of their business models. The market is crowded, and consumers are being spread thin across the thousands of companies offering GLP-1 treatments.

So, who’s going to capture the largest market share? Will it be the incumbent players like Ro, with their established presence and resources? Probably. But is there still room for underdogs to carve out a niche? That’s the big question.

Dashevsky’s Dissection

How will digital health companies in the weight management space differentiate themselves? This, in my opinion, is the existential question these companies should be asking. Below is a quote from my prior article, The Future of Obesity Care: GLP-1s, Compounding & Surgery Trends:

So, how can digital health companies truly drive long-term value in this space?

1. Offer More Than Just Medications

First, companies need to go beyond simply offering medical therapy for weight loss. Adding services like nutrition counseling, coaching, and fostering a sense of community can create a more holistic and lasting approach to care. This creates stickiness for consumers, who may start with GLP-1s but stay for the comprehensive support that addresses the emotional, behavioral, and physical aspects of weight management.

2. Carve Out Niche Areas in Weight Management

Another way to differentiate is by going niche—targeting specific subpopulations in the weight management space. Companies that address the unique challenges of these populations can build stronger loyalty and deliver tailored value. Here are a few examples of niches that are ripe for growth:

• Women’s Health: Treating weight loss in women with conditions like PCOS or during life stages such as menopause.

• Diabetes: Companies like Virta Health have already shown how combining weight management with diabetes care can greatly impact.

• Heart Health: Obesity is a major driver of cardiovascular risk, making it a prime focus for companies aiming to reduce long-term cardiac events.

• Mental Health: Addressing the psychological impact of obesity, such as disordered eating, anxiety, and depression, could open doors to deeper engagement with patients.

• Adolescent Weight Management: With rising rates of childhood and teen obesity, companies that develop programs tailored for younger populations (and their parents) could fill a critical gap.

• Bariatric Surgery Integration: Companies that work with bariatric surgery patients pre- and post-operatively to maximize success and manage long-term health could tap into this specialized population.

By focusing on these niches, companies can stand out in an increasingly crowded market and attract patients who feel underserved by generalist platforms.

For instance, a patient with type 2 diabetes looking to manage their weight might gravitate toward a diabetes-focused company like Virta instead of a broader solution like Noom. Similarly, a young woman with obesity and PCOS might prefer a women’s health-focused platform over a generic weight management program.

The weight management space is at a critical juncture. As digital health companies continue to flood the market, differentiation will be the key to survival. Those who move beyond simply prescribing medications and focus on delivering comprehensive, personalized care—whether through added services like coaching and community or by carving out niche populations—will ultimately create lasting value for their patients.

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