The news: WeightWatchers is acquiring Sequence, a telehealth company that prescribes popular weight loss drugs, for $106 million.

• WeightWatchers will combine its long-established food-tracking weight loss program with Sequence’s medication-based service.
• WeightWatchers plans to endorse Sequence’s offerings to its 3.5 million members, per the Wall Street Journal.

More on Sequence: Sequence members pay $99/month for telehealth appointments, access to dietitians and fitness coaches, and an app to track weight loss progress.

• Sequence’s clinicians can prescribe obesity medications, including increasingly popular GLP-1 drugs like Ozempic and Wegovy.
• The cost of GLP-1 medications is not included in the membership price.

Zooming out: Telehealth providers are emerging as vehicles to deliver GLP-1 drugs to patients by including prescriptions as part of an online obesity treatment program.

• GLP-1 drugs stimulate the body to produce more insulin, in turn lowering blood sugar levels.
• Patients who are considered obese can expect to lose about 15% of their body weight in a little over a year’s time when taking GLP-1 meds.
• Ro recently rolled out a virtual weight loss program that includes GLP-1 medications for obesity treatment.
• Found and Calibrate are players with more established virtual care weight loss programs that enable its providers to prescribe GLP-1 drugs.

Key stat: Obesity drugs could expand from a $2.4 billion market segment to a $54 billion category by 2030, according to Morgan Stanley Research.

Yes, but: GLP-1 meds are quite expensive and often aren’t covered by insurance.

• Some GLP-1 meds, like Ozempic, are FDA-approved for diabetes and not for weight loss.
• That means insurers could determine that these drugs aren’t medically necessary when used just for weight loss treatment.
• If a patient’s health plan does not cover the GLP-1 drug, the out-of-pocket cost for it could be as much as $1,600/month.

Plus, consumers need to vet companies offering weight loss prescriptions online.

• For example, telehealth startup NextMed is being scrutinized for shady advertising of GLP-1 meds that it prescribes.
• It was touting fake testimonials–that have since been removed–from its customers who have been prescribed Ozempic, per a WSJ report.
• And it promotes Ozempic as an FDA-approved weight loss drug, despite the agency not certifying it for that purpose.

Our take: Telehealth providers are moving into the weight loss drug market, which is not dissimilar to their entrance into the controlled substances market to treat mental health conditions.

Digital health players will need to avoid making the same clinical and ethical mistakes as virtual mental health startups like Cerebral—otherwise they’ll be viewed by consumers and regulators as dishonest drug pushers. WeightWatchers has the brand name recognition to succeed, whereas lesser-known startups could struggle, particularly if patients’ health plans don’t cover the pricey meds.

This article originally appeared in Insider Intelligence's Digital Health Briefing—a daily recap of top stories reshaping the healthcare industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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