Who Needs Diet and Exercise? Health Plans Cover New Vivus Obesity Drug

A brand-new weight loss drug, Qsymia, just hit the market – and 106 prescriptions were written in the first week. And as Ed Silverman at Pharmalot pointed out, and Bloomberg reported, health insurers were more willing than anticipated to cover the cost.

That will likely boost sales for Qsymia’s maker, Vivus (VVUS) Inc. It may also help other companies working on obesity drugs. Arena Pharmaceuticals (ARNA) plans to introduce Belviq, which won regulatory approval in June. And Orexigen Therapeutics (OREX) is working on one called Contrave.

VVUS Revenue TTM Chart

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VVUS Net Income TTM Chart

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Some analysts have said Qsymia and Belviq could be sales blockbusters that each draw more than $1 billion in annual sales.

VVUS Chart

VVUS data by YCharts

But investors beware: some diet pills have produced disappointing results. And of course there was Fen-phen, the obesity medication withdrawn from the market in 1997. It was linked to heart troubles, and Wyeth -- now part of Pfizer (PFE) -- reserved $21 billion to settle lawsuits. And as of this summer's report, they were still ongoing.

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