The rise of obesity drugs: Weight loss at what cost?

As millions turn to drugs to help them lose weight, lawsuits are already underway concerning the side effects. The first of Clyde & Co’s 2025 emerging risks webinar series explored where liability could lie if things go wrong and what forms it might take.

Obesity is now a global epidemic according to the World Health Organization, claiming the lives of around 2.8 million people each year^[1]. Given the challenges of tackling the problem through exercise and diet alone, the use of drugs to help people lose weight is growing, and some brands – such as Ozempic and Wegovy - have become household names.

Known as “semaglutides” (and their cousins “tirzepatides” such as “Mounjaro”), these insulin-like medications were originally developed to treat diabetes. While they can be extremely effective, the concept of using these drugs for weight management is still very new, not all are licensed for this purpose, and they should be prescribed with care. From an insurance perspective, this raises important liability challenges and coverage issues.

The health implications of semaglutides

Semaglutides are big business: worldwide spend on these drugs is forecast to exceed $130 billion within the next five years in the US alone^[2]. They are now widely available from GPs and family doctors, nurse prescribers, private clinicians and online pharmacies, and can be taken in tablet or injectable form to suppress appetite and/or alter energy consumption. Like many drugs, they can be prescribed “off license” or “off label” (i.e. for applications other than those for which they are licensed), at the discretion of a qualified prescriber.

For Richard Manstoff, Senior Associate at Clyde & Co, one of the most serious issues is the perception that the drugs may be perceived as cosmetic treatments, rather than medicines having powerful effects on insulin and glucose levels. They can be dangerous if misused or prescribed inappropriately or without appropriate care or safeguards. Moreover, the potential adverse side effects of these drugs in the wider population are not yet fully known.

“Prescribers are required to have an adequate knowledge of the person's health and their relevant medical history,” he said. “Serious risks may arise if weight loss medicines are prescribed privately, without access to full medical records, without full knowledge of a patient’s other medical conditions or the other medications that they may be taking at that time.”

Taking semaglutides may require an adjustment of other medications, both at the outset and as the patient’s weight falls. To mitigate risk, the clinician prescribing a weight loss drug should coordinate carefully with the patient’s regular doctor.

The expanding scope of liabilities

Lawsuits alleging bodily harm due to side effects are already in the very early stages in the U.S., and the type and extent of the claimants’ alleged injuries, as well as the number of patients asserting claims, may grow exponentially over the coming years. Multi-district litigation (MDL) is now underway, focusing primarily on gastrointestinal injuries. As new claimants are added to the MDL, plaintiffs have sought to expand the scope of injuries alleged.

The extent to which manufacturers knew (or should have known) about side effects – and whether they provided adequate warnings – are always critical considerations in the context of pharmaceutical liability claims. Marketing tactics are scrutinised to establish whether they were overzealous or misleading or downplayed the risks. Plaintiffs may use “foreseeable (mis)use” arguments to allege that manufacturers should have warned about potential harm from “off label use” in a way that was arguably predictable – in this case that may include the use of a diabetic drug to treat obesity.

“As these claims develop, it will be interesting to see if liability will be allocated differently between defendants given the intended use of the drug,” said Rosehana Amin, Partner. “It also gives rise to the question of whether a manufacturer can be held responsible for side effects when a drug is used for a different purpose, or if such side effects can be argued to be foreseeable regardless of the use of the drug i.e. for diabetes or weight loss.”

Evaluating the overall exposure to these claims poses a significant challenge for insurers.  At this stage it is very difficult to predict which injuries will eventually be included within the scope of litigation, whether legal liability might exist, and the potential magnitude of damages claims.

Beyond bodily injury claims

Drug manufacturers may not be the only target of claims. The breadth and depth of the semaglutide supply chain make it important to evaluate the liabilities of all those involved. 

Claims activity may in due course arise against healthcare professionals, weight loss clinics and medical spas which include weight loss among other aesthetic medical treatments.  Pharmaceutical companies have begun filing lawsuits against “compounding pharmacies” and others that produce and sell off-brand or custom-made medications, alleging trademark violations and false advertising if they reference established brand names in their product literature. Offshore litigation is also a possibility.

Kirsten Soto, Senior Associate, warned insurers, “These plaintiff firms are sophisticated litigators. They will plead extremely broadly to try to trigger as much insurance coverage as possible. These claims should be approached with care and reviewed in consultation with coverage counsel. Even if the eventual loss may be uninsured, there may still be a duty to defend, depending on the jurisdiction.”

With semaglutides becoming increasingly accessible and widely used, lawsuits alleging adverse effects are highly likely to proliferate. If an insurer is concerned about the potential exposure, now is the time to take stock of the appetite for risk.

To learn more about this issue, watch our webinar here

[1] Source: WHO
[2] Source: Channel 4 Dispatches: Skinny Jab Scandal