Riding the Ozempic wave

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TV Host 1: It is reported that over 9 million people living in the U.S. are on weight loss drugs, 

TV Host 2: It’s the talk of TikTok. Ozempic is a drug you inject that’s meant to improve blood sugar and help manage type 2 diabetes.

TV Host 3: But because one of the side effects is weight loss, many are using it off label. A trend that may have started in Hollywood. A drug shortage is impacting people living with diabetes, and some pharmacies say they just can’t get it in stock. 

ZACH REITANO: We are just getting started 

Millions of people are going to have seen the benefits. Well, then people are going to want to talk about,what’s the cascading impact on society?

Look at the impact it’s had on the grocery business, or the restaurant business, or travel, or the healthcare system — you name it. You know, only a few million people have this, but 110 plus million people are eligible. There’s a long way to go before, we’re done, talking about this. 

BOB SAFIAN: Bob Safian here. The boom in weight-loss drugs like Ozempic and Wegovy is rippling across society and the business world. Today I’m talking with Zach Reitano, CEO of telehealth platform Ro, which has ridden the weight-loss craze to a $7 billion valuation. It’s been fueled by a series of rapid responses. Reitano likens the tumult around weight-loss drugs to the furor around AI — that the cascading impacts in terms of health, economics, and culture will be more far-reaching than we can imagine. This is Rapid Response. 

SAFIAN: I’m Bob Safian. I’m here with Zach Reitano, founder and CEO of telehealth company Ro. It’s good to see you, Zach.

REITANO: It’s good to see you, Bob. Thanks for having me.

SAFIAN: So in the last year, the appetite for weight loss drugs like Ozempic and Wegovy and other so called GLP1s has just exploded. Patients, doctors, healthcare companies. It’s all scrambling, Denmark’s Novo Nordisk, maker of Ozempic and Wegovy, is so on fire. It’s now responsible for most of that country’s growth, which is kind of amazing. Your business, Ro has been part of this whirlwind.

Copy Link5 Reasons for the Ozempic demand

REITANO: Yeah, absolutely. I’ll first start actually, I think, by giving a little bit of context.

GLP 1s, satisfy at Ro, what we think is they satisfy five criteria never before seen in medicine. And the combination of those five things has created this unprecedented demand. The first is that the majority of the U. S. population is eligible for the drug. Alright so that we’ve, we’ve really never had before other than maybe vaccines at times.

But 75 percent of the U. S. population has overweight or has obesity and probably about 60 percent are eligible for the treatment. The second is it’s, incredibly effective, two, three, sometimes four times more effective than existing solutions, right? Surgical interventions are comparable, but the third point is that far less scalable.

So you have the majority of the U. S. population eligible, extremely effective, quite scalable. The fourth is that patients want it. And the fifth is that providers and the majority of the healthcare system over time want patients to have access to it, right?

So those five things create this unprecedented demand.

BOB: You started your company focused on erectile dysfunction, but early last year you launched what you call The Body Program, focused on obesity. And that timing, I mean, it couldn’t have been better. 

REITANO: In those instances when the timing comes together and sort of these. Sometimes it’s better to be lucky than good. 

Right, like, erectile dysfunction just happened to be a side effect of my heart medication.

And I happened to get re-prescribed that medication at the very same time, that there was a large transition of branded drugs to generic drugs that these patents were expiring at the same time that telemedicine laws were being updated. 

So there were so many things related to timing circumstances that where we just got lucky.

BOB: And with the new obesity program, your timing there was just as a wave of demand came rolling in.

Copy LinkWhy Ro had to stop advertising

REITANO: We launched the RoBody membership as, as you alluded to in January 2023, and by May, there was a national shortage of Wegovy. 

Which for a drug that needs to be taken weekly, that is titrated up, which means that patients start at a low dose as their body gets used to it, they might hit, what is referred to as maintenance or a steady dose. And that varies based on patients, but patients take a once weekly injection and they need to do it on a continuous basis. And so when there’s a national shortage and patients are getting different doses over time, it becomes harder and harder for them to hit that next dose. And so what we did in May, we went from advertising a significant amount.

We took over Grand Central. We took over subway stations. We were advertising on TV. Um, Facebook, Google, you name it, all of the different channels that I’m sure people on the pod are, are very familiar with. We stopped advertising.

SAFIAN: You stopped because you had too many people already coming in.

REITANO: We stopped because we saw that the people that were on the platform and that were currently coming in as well, we needed to devote all of our energy to making sure that they were able to get medication on a continuous basis.

And we didn’t want to exacerbate that problem  by fueling demand with advertising. So we stopped advertising. We issued credits to all of our members that were unable to pick up medication within 30 days. So a lot, a lot, a lot of refunds and credits. We shifted all of our existing resources to finding supply at different pharmacies. So in July and August alone of 2023, our team made well over 40 to 50, 000 phone calls to different pharmacies throughout the country.

SAFIAN: Phone calls. Like, are you literally on a phone yourself, like manual pick up?

REITANO: A hundred percent. 

SAFIAN: Wow.

REITANO: So if we’re able to find stock at a pharmacy. We could immediatel, see what other patients in that zip code or within a specific number of miles, 5, 10, 15, 30 miles, ping those patients, say, we found supply, it’s here, can you go get it?

And then we would go, go back to the pharmacy, reserve it, or transfer a prescription to that pharmacy. So there’s a sort of massive game of whack a mole there to try and find supply for patients. 

And then we added drugs to the formulary. One of them was Saxenda. It’s a daily injection. It’s less effective, but it’s still more effective than alternative options that then went on shortage, and then at the end of November, early December, Lilly launched a drug called Zep Bound.

And that allowed us to start advertising again, start onboarding patients because we had extremely high confidence as we added that to the formulary that they would be able to access some form of treatment.

Copy LinkRo’s shift to weight loss 

SAFIAN: To put yourself in this position required a series of responses that you guys went through starting back in 2021. And the company had provided obesity treatments before, but in the summer of 2021, you kind of had an epiphany.

REITANO: My dad, who’s a physician.  I can share this part with a big smile on my face, but he has saved my life. He saved my sister’s life. He saved my mom’s life. Cause we’ve all at one point in time or another, had life-threatening illnesses. I have a congenital heart condition, and he helped me navigate that.

But even as a physician himself, he has always struggled with his weight for as long as I can remember my entire life. 

And I saw the fights that that created because when people don’t understand the cause of obesity, they make the false assumption that it’s willpower, that it’s self-discipline. And so you see this person in my dad who’s devoted his life to his family, devoted his life to helping others, but why can’t he just do this one thing for us?

Why can’t he just get healthy and be there for us as we want him to be? And again, it’s out of love and fear, but it was driven by what a lot of people have, which is a misperception of obesity as a disease. 

And so my dad was seeing an obesity specialist, and he ended up being prescribed Ozempic, and now he’s on Mounjaro, actually. And he lost 40 or 50 pounds. 

I saw him in almost a matter of like a week or two go from this, this drive, this obsession, as he would describe it, with food, and it disappeared almost overnight.

His, you know, midnight trips to the kitchen — all of them disappeared.

When I heard that in him articulate that, and then look at the number of people that we were helping, the number of people that were asking for it, and saw that, there was an opportunity to replicate that experience for millions of people, and I knew that was the most profound thing I thought that we could do and build at the time.

SAFIAN: So you went “down the rabbit hole,” as you’ve described it, studying obesity drugs and the weight-loss landscape. And when you climbed out of the hole, you decided to shift the whole company in this direction. Which was a risky bet.

REITANO: We made an uncomfortably large investment there, probably ahead of where people thought maybe it warranted it at the time. And not only because it was such a large investment relative to our business and our resources at the time, but also because people had doubts. 

Weight loss is a category from a clinical perspective that is littered with failures, and, you know, over-promising, under-deliver. And then, not to mention, this was a weekly injection. So there were so many reasons why people thought, this will never work. 

SAFIAN: Those doubts included doubts inside your own organization, right? There were folks in the company who weren’t quite sure this was where the company should go.

REITANO: Yes, that is, that is true. 

To me, it was, I was obvious that I thought the world would be so impacted by these things.

Sometimes you’re right, sometimes you’re wrong, but it takes a tremendous amount of trust from the team. So the team, I think, said, you know, classic disagree and commit. And then once they saw it,  it didn’t take much, I think it didn’t take much convincing once people saw the impact that it had on patients’ lives.

SAFIAN: You said to me, when we talked earlier that we needed a hero product to build the brand. It sounds almost like you were looking for something at the same time that this appeared to.

Copy LinkThe key to building a brand

REITANO: Building a brand is part art, part science. And because if it was just pure science, everyone would be able to do it.

I deeply believe that, you need a single hero product to build a brand. It’s the initial tip of the spear. It’s how people are introduced  to the company and to the promise that you’re making to them. And over time, I think when people talk about, “Oh, you know, your brand will only be known for one thing”.

That’s a champagne problem. That means you found product market fit, which is the hardest thing to do as a company or as a product when you’re first starting.

SAFIAN: And when you first started, the product was ED related, right? That was your hero product in the beginning that you were known for.

REITANO: Yeah, so we first launched the company under the name Roman, and the first product was erectile dysfunction. We always knew that we wanted to treat patients of all ages, sexes, and genders, across the country. And so we knew that even as we were building the brand, we knew that Roman wasn’t going to be the end state.

But we sort of wandered our way to try and find the right solution. We tried a house of brands. We had Roman, and we had Rory for women’s health. We had zero for smoking cessation. We had RoDerm for dermatology. We had a bunch of different brands. And ultimately, the thing that I think we realized is that we wanted one brand that represented the ethos of the company,

And so we put all of our products and services under one brand, but to your point, we still needed a hero product.

How would the majority of people learn about Ro? 

We had a strong hypothesis that obesity would be that hero product. 

SAFIAN: So you’ve made the call to lean into obesity as your hero product. You made what you call an uncomfortably large investment, but as you’re building that out, you also realize you need to restructure the company.

REITANO: Building a company is a continuously humbling experience.

You’re constantly doing things where you’re wrong. It’s this weird combination that when you’re building a company, you need to have such conviction in what you’re doing because there’s so many hurdles and so many people are telling you no. All the time, they’re telling you your idea is stupid.

We were laughed out of the room when raising money constantly. You know, when we raised our Series A, there were 40 no’s out of 43 pitch interviews and pitches. So, it’s this really difficult tension between needing to have really high conviction, being wrong a lot, and being told no all the time.

And in 2022, my co-founders and I refounded the company. And that included some of the things we’ve mentioned thus far; it included bringing everything under one brand. So that was part of the refounding. 

The second thing we did was move on from just about 20 percent of the company, that’s some humble pie too. When you have to move on from people because, in large part, it was our doing, you know, ultimately founders and CEOs are accountable, and whenever you have to do a layoff,. It’s fully on you, right? 

And so that’s a big mistake that we will have to live with, um, and learn from. 

And the next thing that we did was shut down a few of our revenue generating products. But to narrow our focus even more, 

The confluence of those four things has worked together to create the, you know, reacceleration that Ro has seen

Copy LinkThe healthcare equivalent of AI

SAFIAN: You’ve called these drugs, “the healthcare equivalent of AI.” Explain why GLPs are like AI.

REITANO: In the same way that AI is this unbelievable, let’s say facilitator of leverage for society, right?

I think that what we are seeing is that these drugs are going to have a profound impact. We’re going to see a tremendous impact on the healthcare system, from the surgeries that are needed to the procedures that exist to the level of the number of auto injectors that are built and developed.

People eat 30 percent fewer calories. What they eat changes. They eat far less ice cream, far more fish, poultry, vegetables,

And then lifestyle behaviors. On the other side of people losing weight, do they exercise more or less? Marriage and dating — you know, you actually see an increase in both marriages and divorces on the other side of large impacts of body composition.

And so we can’t yet fathom, predict, or digest the true cascading impact of AI. And I definitely think we can’t truly understand the cascading impact of GLP 1s. 5, 10, 15, 20, 30, 50 years from now. 

SAFIAN: Cascading impact akin to AI! I hadn’t thought about weight-loss that way. But I guess if obesity truly becomes a thing of the past, who knows what the impacts might be. After the break, we’ll dig into why Zach believes the stigma around obesity is an opportunity, and more. We’ll be right back. 

[AD BREAK]

SAFIAN: Before the break, we heard CEO Zach Reitano of Ro talk about the storm around weight loss drugs Wegovy and Ozempic. Now we talk about the stigma attached to obesity and the risks and opportunities he sees in that. Plus Zach gives more detail on the drugs’ cascading impact for businesses beyond health care. Let’s jump back in. 

Fueled by TikTok videos and celebrity testimonials, people are seeking out weight loss prescriptions who may not be obese for, other reasons, like image, body image, or other things. What’s your responsibility in addressing that phenomenon?

REITANO: We only facilitate treatment and high-quality obesity care for patients who have obesity and are considered unquote on-label for the drug.

Which means they either have a BMI of 27 to 30 with a comorbidity, or they have a BMI of 30 plus. Now, knowing also that BMI is because that is the label, that is what is required by the FDA on the label, we could talk for hours about the flaws of BMI and why it is used, but I will, just say Ro treats patients that are on the label for the drug. And we have a rigorous qualification process in order to make sure that we are only doing that. 

I think that the reason we’re all talking about this so much is because there is so much stigma attached to obesity, weight loss and to the way that it’s achieved. And it’s tough, right? Because there’s so much here.

Obesity, is attached to so many different components. There’s sustainability; there’s lifestyle choices; what we eat, what we feed our kids; how we gather; and how we celebrate. There’s so much that food consumption, exercise, and health are wrapped up into. We all have very strong feelings towards it.

And that does impact how society judges it, how likely someone is to receive treatment, and how people who seek treatment are viewed. And so hopefully we can break down a lot of that stigma

SAFIAN: Yeah, you’ve been from the beginning with Roman first, and now in Ro you’ve been focused on often areas where there is a stigma or shame, erectile dysfunction, baldness, and obesity. It’s interesting because in those areas, like sometimes, yeah, customers want to be seen and validated, normalized, which I think is what you’re doing.

But at the same time, these are personal areas that users might not be comfortable with. And you relied on a lot of marketing, as you mentioned earlier, but a lot of real eye-catching marketing efforts all the way through this journey. Is there a philosophy around that, relative to this issue of shame and stigma?

Copy LinkUnapologetic patient-centricity

REITANO: Yes. Again, it comes back to unapologetic patient-centricity. 

So I’ll take our out of home campaign for obesity and the body program. And we showed patients that were of an eligible BMI in the ads, which is not always done by companies in the space, but that is done by us. And we showed these patients in positions of power, in positions where they had tremendous agency, um, real strong power poses, and then we showed them using the medication.

And the only thing we described was, as we said, a weekly shot to lose weight. And this caused outrage, and the source of the outrage is very understandable. It’s because body composition, body shame have existed for far too long, and it’s too strong a force in our society that no one should feel shame about their body. And when they wake up, they should, you know, love themselves, which is very, very important. And even, with the words body positivity, a lot of it is right now that the community is trying to shift and evolve to body neutrality, to try to reduce the role that your physical appearance plays in your emotional and mental health.

So what was fascinating is that people did have this philosophical hurdle around someone seeking medical treatment for obesity. And a lot of it is because of the stigma that is attached to it. The fact that people do see it as a flaw of self-discipline and willpower.

But for the individuals who are impacted by it, I can tell you that the advertisement resonated with them. 

For us, the advertisements that we create will resonate with the people who need this treatment, or access to this? We solely focus on that. And if that frustrates other people, so be it, because we are speaking to the people who want and need our help.

And that, I think, is, again, it’s about being unapologetically patient-centric. And that’s sort of the guiding principle for us, right? And even take erectile dysfunction or sex. People have sex. It’s how the vast majority of us are here. Yeah, we don’t want to talk about it. We don’t want to talk about the role that it plays.

We don’t want to talk about the fact that someone having positive consensual intimacy with their partner more frequently than not is a good thing for themselves, their life. There’s no shortage of research that shows that healthy sexual relationships have a positive cascading impact on people’s lives.

And then if you’re unable to, that’s a problem for those people for whom it impacts. They deserve to have it fixed in a discrete, fast, affordable, effective, and seamless way. 

SAFIAN: Ozempic can cost, you know, almost $900 a month right now for supply. What is the future of that? Because it seems that’s a big burden for a lot of people to carry indefinitely.

REITANO: Right now, there are people who have insurance coverage and people who have to pay cash.

If you’re not covered, you might pay around $550 a month. So let’s just say broadly right now that the people who are not covered pay 550 a month on average.

That’s too expensive. For the people who are covered, there are tens of millions of people who are covered, so about 30 to 40 percent of employers cover it. That’s about 50 million people. When they are covered, the publicly available data says that when someone’s covered, 80 percent of the time they pay $25 or less.

And we do see the vast majority of patients on our platform pay less than $100 a month when they’re covered. So about 30-40 percent of commercial plans cover it. All federal employees cover it. So I think that’s amazing, or they are covered, as are their families. That’s an amazing step by the U. S. government. 

Over time, what you will see is that as more and more pharma companies enter, or as there’s more and more competition, we’ll hopefully see prices come down.

In addition to prices coming down, there’s research being done that highlights the benefits beyond obesity. So in addition to society catching up to the underlying health impact of excess weight and excess adipose tissue, the label will expand to cover more things, such as heart disease, chronic kidney disease, and sleep apnea. As I mentioned before, it’s being studied for all these things. 

And what you’re also seeing is that the pipeline here is tremendous, going from once a week injectables to some that are being studied once a month, some that are being studied once every six months, and some that are being studied really early on for almost a vaccine, like once a year.

That’s far less expensive, right? 52 times a year versus once. And then you’re seeing oral versions of GLP one. So daily tablets, twice-a-day tablets are being studied. Tablets are far easier to scale than these injectables. 

So there’s a lot that’s happening that will hopefully drive down the price, increase access, and make it sustainable for people to maintain use 

Copy LinkWill the weight-loss drug hype continue?

SAFIAN: The last year’s focus on these drugs, some would say, was hype. Will it continue? Will people keep talking about these same drugs in the same way when there isn’t a demand? And is that good or bad? Like, how do you think about sort of keeping the momentum going? 

REITANO: I think that we are just getting started And there are a few reasons why that’s the case. One is actually the shortage. So right now, the thing that people want to talk about — things that we talked about last year — that impacted us was the shortage.

But, because of the demand and sort of the quote-unquote out of stock, like that’s topic, that’s discussion worthy. But what are we going to see? What we are going to talk about in 24 or 25 is when it ends, right? Millions of people are going to have seen the benefits. Well, then people are going to want to talk about, well, what are the, what are the, what’s the cascading impact on society?

Look at the impact that it’s had on people’s health. Look at the impact it’s had on the grocery business, or the restaurant business, or travel, or the healthcare system, you name it.The sort of cascading impact. So, I think because we’re just getting started with access in the first place, and our understanding is that, you know, only a few million people have this, but 110+ million people are eligible. There’s a long way to go before, um, we’re done talking about this. Because it really is, and the pipeline is tremendous as well. So it’s not just Wegovy, or, Ozempic, or ZepBound, Mounjaro,and Semaglutide, but over the next three, five, or ten years, you’re going to see that we’re in the middle of this Cambrian explosion of our understanding of cardiometabolic health, which will lead to all of these different inventions.

So I think that you will see not only this drug and this drug class, but what this drug class spawns in terms of understanding our overall health. 

SAFIAN: Zach, thanks for jamming with us. I do appreciate it.

REITANO: I appreciate the time, and thanks for the great questions, Bob.

SAFIAN: I’ll confess that the craze around weight-loss drugs took me by surprise. Maybe it shouldn’t have, but I’m still kind of amazed that Zach saw it coming years ago.

What strikes me most is how progress can emerge in unexpected ways and in unexpected areas. When I first heard about these treatments, I viewed them as just another fad in the vanity-driven quest for thinness. But as Zach describes it, it has the potential to mitigate some of the biggest drivers of disease, improving life and health spans. And unleashing a slew of other opportunities. 

Of course, that potential isn’t just about science. Businesses like Ro and others play a critical role, ensuring that these treatments are used responsibly and that they aren’t just made available to the rich. We’ll keep watching and learning. I’m Bob Safian, thanks for listening.