America's love of "supersized" everything has helped fuel an out-of-control obesity problem that is having dire consequences on human health and the economy. For instance, the CDC estimates that the annual medical cost of obesity in the U.S., as of 2008, was $147 billion.
A rising body mass index has also been directly linked to an increased risk of heart disease, type 2 diabetes, and even certain types of cancer.
Despite the wide-ranging negative impacts of our growing weight problem, the medical community has been slow to embrace the new generation of weight-loss drugs approved by the Food and Drug Administration.
High marks, low sales
In 2012, the FDA approved Belviq and Qsymia for the treatment of chronic obesity with one or more co-morbid conditions. Yet, Arena Pharmaceuticals (NASDAQ:ARNA) and VIVUS (NASDAQ:ARNA)--respective manufacturers of Belviq and Qsymia -- have both reported sluggish sales for their new drugs so far.
This week, the FDA approved Orexigen Therapeutics' (NASDAQ:OREX)weight-loss drug Contrave. And the agency looks close to approving a fourth medication after an advisory committee on Thursday gave an overwhelmingly positive vote for Novo Nordisk's (NYSE:NVO)injectable drug liraglutide.
In a telling bit of market drama, Orexigen's shares fell by nearly 11% following Contrave's approval, showing the extreme pessimism surrounding new weight-loss medications.
So why aren't doctors prescribing diet drugs?
New diet drugs face a host of complex and multifaceted problems that are limiting their impact on the growing obesity problem.
While it's true that anti-obesity drugs have a history of nasty side effects that include suicidal thoughts and heart attacks, this is far from the only reason why newer medications have failed to win over physicians and patients.
One of the biggest hurdles weight-loss drugs face is that many private insurers have been slow to offer coverage. iven that these drugs can cost upward of $200 a month, patients might balk at the thought of paying this added expense out of pocket, especially in a tough economic climate.
Many people still don't view obesity as a disease, even though the American Medical Association recognized it as such in 2013. As a result, doctors appear hesitant to prescribe medications for a condition that some view as best managed by practicing self-control and increasing physical activity.
Last but certainly not least, these new diet drugs haven't blown anyone away on the efficacy front. Novo's injectable drug, for example, only produced 10% or greater weight loss in about 22% of patients taking part in its clinical trials. Belviq and Contrave's clinical trial data showed a similar level of efficacy. And even Qsymia's market-leading placebo-adjusted weight loss is far from ideal in light of the drug's other potential risks.
The diet drug is entering a new era
The FDA went more than a decade without signing off on sales of a single new diet drug, but is now close to approving four within a span of just a couple of years. This sea change at the agency didn't happen overnight, but instead resulted from years of effort from anti-obesity groups clamoring for access to new pharma options.
Despite these tireless efforts, newly approved diet drugs have been met with a cold reception by potential customers -- showing the tremendous need to develop this market. That said, drug companies will undoubtedly continue to push forward given that the weight-loss market is valued at over $60 billion a year according to one source.
The first drug company to successfully crack this large and growing market could have one of the best-selling drugs of all time on its hands. Time will tell if Orexigen or Novo's new offerings have what it takes to open up this huge opportunity.
George Budwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.