Rapid Response: Riding the Ozempic wave, w/RO's CEO Zach Reitano

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It is reported that over nine million people living in the US are on weight loss drugs. It's the talk of TikTok. Ozempic is a drug you inject. That's meant to improve blood sugar and help manage type two diabetes. But because one of the side effects is weight loss.

Мені ар узю офлейл. А трен даме старте і Холивод. A drug shortage is impacting people living with diabetes, and some pharmacists say they just can't get it in stock. We are just getting started. millions of people are going to have seen the benefits. Well then people are gonna want to talk about what's the cascade impact on society. Look at the impact it's had on the grocer 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 here. The boom in weight loss drugs like Ozempic and Wagovie is rippling across society and the business world. Today I'm talking with Zach Raetano, CEO of telehealth platform Row, which has ridden the weight loss craze to a seven billion dollar valuation. It's been fueled by a series of rapid responses. Raetano likens the tumult around weight loss drugs to the fur 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. I'm Bob Safian. I'm here with Zack Retano. Founder and CEO of telehealth company Roe. Good to see you, Zach.

It's good to see you, Bob. Thanks for having me. In the last year The appetite for weight loss drugs like Ozempic and Wagovy and other so called GLP ones. has just exploded. Patients, doctors, healthcare companies All scrambling.

Uh Denmark, Snovo, Nordisk, maker of Ozempik and Wagovy is so on fire. It's now responsible for most of that country's growth. Kind of amazing. Um, your business row has been part of this whirlwind. Yeah, uh absolutely. I I'll first start actually I think by giving a little bit of context. GLP ones. Um satisfy uh at Roe, 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 US population is eligible for the drug. Right. really never had before other than maybe vaccines at times. But seventy five percent of the US population has overweight or has obesity, and probably about sixty percent are eligible for for the for the treatment. The second is it's

Incredibly effective, two, three, sometimes four times more effective than existing solutions. Right. Uh sur surgical interventions are are comparable, but the third point is that far less scalable. So you have the majority of the population eligible, extremely effective. Quite scalable. Uh 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. 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.

In those instances when the timing comes together and sort of these Weird way sometimes it's better to be lucky than good. Right, like erectile dysfunction just happened to be a side effect of my heart medication. Um and I happened to get represcribed that medication at the very same time uh that there was a large uh transition of branded drugs to generic drugs that these patents were expiring at the same time that uh telemedicine laws were being updated. So there were so many

Things related to timing circumstances. Where we just got lucky. And with the new obesity program, your timing there was just as a wave of demand came rolling in. We launched the Robody membership as as you alluded to in in January twenty twenty three and by May There was a uh a national shortage.

Um of of Wogovy. Which for a drug that needs to be taken weekly that is titrated up, which means that uh patients start at a low dose, as their body gets used to it, they might hit uh 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 uh in May, we went from uh 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. You put you you stop'cause you had too many people already coming in.

We stopped because we saw that the people that were on the platform and that were currently coming in as well, we needed to v 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. um by by fueling demand with advertising. So we stopped advertising. Uh we

Issued uh credits to all of our members that were unable to pick up medication within thirty days. So a lot, a lot, a lot of refunds and credits. Um we shifted all of our existing resources to finding supply at different pharmacies. So In July and August alone of twenty twenty three, our our team made well over forty to fifty thousand phone calls to different pharmacies throughout the country. Phone calls like are are you literally like on a phone yourself manually picking up a So if we're able to find stock at a pharmacy

We immediately could Uh see what other patients in that zip code. Or within a specific number of miles, five, ten, fifteen Thirty 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 It was a sort of a massive Um game of of whack em all there to try and find supply for patients.

And then we added drugs to the formulary. One of them was sixenda. Um it's a daily injection. It's it's l it is 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 Lily launched

uh a a or uh launched a drug called Zetbound. 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 Of treatment. To put yourself in this position required a series of responses that you guys went through starting back in twenty twenty one.

And the the company had provided obesity treatments before But in the summer of twenty twenty one, you kind of had An epiphany. My dad. Who's a physician.

And he's actually and 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. Um, 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 and I saw the fights that that created because When people don't understand the the cause of obesity, they make the false assumption that it's willpower. That it's 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 lose weight and get healthy and and be there for us as we want him to be. And again, it's it's out of love and fear, but it's

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 as Epic and now he's on uh actually.

And he lost. Forty, fifty 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 with food. And it disappeared almost overnight. His you know, midnight trips to to the the kitchen, all of them disappeared. When I

Heard that him 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

Um There was an opportunity to replicate that experience for millions of people. And knew that was the most profound thing I thought that we could we could do and build at the time. 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 that hole. You decided to shift the whole company in this direction. Which

was a risky bat. We made a uncomfortably large uh investment there. Probably uh you know, ahead of where people thought maybe it warranted it at the time. And ahead of 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 w weight loss is a is a category from a clinical perspective that is littered with failures and with, you know, overpromising underdeliver. And then not to mention This was a weekly injection. So there were so many reasons why people thought This will never this is never gonna work.

Those doubts included doubts inside your own organization, right? There were there were folks in the company who weren't quite sure this was where the company should go. Yes, that is that is true. To me it was It was uh it was like gonna be obvious that I thought the world would be so impacted by these things. Sometimes you're right, sometimes you're l wrong, but it takes a tremendous amount of trust by the team.

So the team I think said You know, classic Disagreeing commit. And then Once uh they saw and it didn't take much I think it didn't take much convincing once people saw the impact that it had on patients' lives.

You said to me when we talked earlier that we needed a hero product. To build the brand. Sounds almost like you were looking for something at the same time that this appeared to you. Building a brand is

Part art, part science. And uh'cause if it was just pure science, everyone everyone would be able to do it. I 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 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 the hardest thing to do as uh as a as a company or as a product when you're first starting. And you first started the product was E D related. Right. That was your hero product in the beginning that you were known for.

Yeah, so we've we first launched the company under the name under the brand Roman. And the first product was erectile dysfunction. We always knew that we wanted to treat patients of all ages, sexes, 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 the end state.

But we sort of wandered our way to to try and find the right solution. We tried a House of Brands, we had Roman, we had Rory for uh women's health, we had Zero for smoking cessation. We had Roadm for Dermatology. We had a bunch of different brands. And ultimately the thing that I think we realized is 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 road? We had a strong hypothesis. That Obesity would be that

would be that hero product. So you 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.

Building a company is a continuously humbling experience. You're constantly doing things where you're wrong. It's this weird combination of 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's stupid. We are laughed out of the room when raising money constantly.

We you know, when we raised our series A, there were forty no's out of forty three Um and pitches. So It's this really difficult tension between needing to have really high conviction and being wrong a lot and being told no all the time. And in twenty twenty two

My uh co founders and I re founded the company. And that included Some of the things we've mentioned thus far included bringing everything under one brand. So that was part of the refounding. The second thing we did is we moved on from just about twenty 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 is uh that's a Big mistake that we will We all have to live with. Um and learn from And the next thing actually that we did was we shut down

a few of our products, revenue generating products. That we shut down, but to narrow our focus even more. The confluence of those four things have w has worked together to create the you know reaccelleration That Roe has seen. You've called these drugs the health

care equivalent of AI. Explain why GLP ones are like AI. In the same way that AI is is This

Unbelievable. Let's say facilitator of leverage for society. I think that What we are seeing is that These drugs

are going to have a profound impact. We're gonna see a tremendous impact on the healthcare system from the surgeries that are needed to the procedures that exist to the level of down to like the the number of auto injectors that are built and developed. People eat thirty 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. The they do they exercise more or less uh m marriage and dating. You know, you actually see an increase in both marriages and divorces on the other side of large impacts of uh body composition. And so we can't yet fathom, predict, digest.

the true cascading impact of AI. And I definitely think we can't truly understand the cascading impact of GLP1s. Five, ten, fifteen, twenty, thirty, fifty years from now. 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. When you've built substantial wealth through your business, it's often tied up in a single equity position. The upside is real, but so is the risk, and knowing when to act isn't always obvious. Creative planning works with business owners to build a strategy around concentrated equity.

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Before the break we heard CEO Zach Retano of Roe talk about the storm around weight loss drugs, Wagovie and Ozempic. Now we talk about the stigma attached to obesity and the risks and opportunities he sees in that. Plus Zack gives more detail on the drug's cascading impact for businesses beyond health care. Let's jump back in.

Fuel by TikTok videos and celebrity testimonials like people are seeking out Weight loss prescriptions. Who may not be obese for other reasons for image of A body image or other things.

What's your responsibility in addressing That phenomenon. We only facilitate treatment and high quality obesity care for patients who have obesity and are considered quote unquote on label for the drug.

Which means they either have a BMI of twenty seven to thirty with a comorbidity. Or they have a BMI of thirty plus. Now knowing uh also that BMI is because that is the label, that is what is required by the FDA on on the label. We could talk for hours about the flaws of BMI and why it is used, but I will just say Roe treats patients that are on 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 the reason we're all talking about this so much is because there is so much Stigma. attached to obesity and to weight loss and to the way that it's achieved and

It it's tough, right? Because there's there's so much there's so much here. Obesity is it's attached to so many different components. There's sustainability, there's lifestyle choices, what we eat, what we feed our kids. uh how we gather, how we celebrate. There's so much that food consumption and exercise and health are wrapped up into. Um that we all have very strong feelings towards it, and that does impact how society judges it and how likely someone is to receive treatment and

how people who seek treatment are are viewed. And so hopefully we can we can break down a lot of that stigma together. Yeah, you you've been from the beginning with Roman First now, Row, you've been focused on often areas where there are stigma or shame, erectile dysfunction, baldness, obesity. It's interesting because in those areas like sometimes yeah customers want to be seen and validated, which and normalized, which I think is is what you're doing, but at the same time, these are personal areas. that sometimes users might not be comfortable with. And you relied on a lot of like You mentioned marketing 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. Yes. Uh again it comes back to unapologetic Patient centricity. So w I'll take um Our out of home campaign for obesity.

And for 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 that is all that is done by us.

And we showed these patients at positions of power. In positions of where they had tremendous agency. real strong power poses. And then we show them using the medication. And the only thing we described was we said a a weekly shot to lose weight.

And this caused Outrage. And the the source of the outrage is very understandable. It's because Body composition, body shame. has existed for far too long and it's too strong a force in our society. And no one should feel shame

about their body and when they wake up. They should, you know, loving yourself is is very, very important. And even Even the words body positivity, a lot of it is is uh uh right now the community is trying to shift and and evolve to bod body neutrality. To r to trying to Reduce roll. that your physical appearance plays in your emotional uh and 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 the stigma that is attached to it. The fact that people do see it as a as a flaw of self discipline. Um and willpower.

And so what we but but the individuals who are impacted by it. I can tell you that advertisement resonated with them. For us, the advertisements that we create, we say what 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 and even take Erectile dysfunction or sex. People have sex.

Yeah, we don't wanna talk about it. We don't wanna talk about the role that it plays. We don't wanna 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 has a positive cascading impact on people's lives. And then if you're unable to

That's a problem for those people for for whom it impacts. They deserve to have it fixed in a discrete, fast, affordable, effective, seamless way. Zanfa can cost you know, almost nine hundred dollars a month right now for for a supply. What is the future of that? Because it seems

It yeah that's a that's a big bur for a lot of people to carry, indefinitely. Right now there's people who have insurance coverage and people who have to pay cash. If you're not covered. you might pay around five hundred fifty dollars a month. So the people, let's just say broadly right now, the people who are not covered pay five fifty a month. On average.

That's too still too expensive. For the people who are covered There are tens of millions of people who are covered. So about thirty to forty percent of employers Cover it. That's about fifty million people.

When they are covered. The publicly available data says that when someone's covered, eighty percent of the time they pay twenty five dollars or less. And we do see the vast majority of patients on our platform pay less than a hundred dollars a month when they're covered. So about thirty to forty percent of commercial plans cover it. All federal employees cover it. So I think that's an amazing or covered.

them and their families. Over time what you will see Is as more and more pharma companies enter, or as there's more and more competition, we'll hopefully see prices come down. The in addition to prices come 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 of excess weight and excess adipose tissue. The label will expand to cover more things. Heart disease, chronic kidney disease, sleep apnea, as I mentioned before, it's being studied for all these things. And what you're also seeing is you're seeing the pipeline here is tremendous, where it's going from once a week injectables to some that are being studied for once a month, some that are being studied once every six months, some that are being studied really early on for

Almost vaccine like once a year. That's far less expensive, right? Fifty two times a year versus once. And then you're seeing oral versions of GLP one. So daily tablets, twice a day tablets being studied. Tablets are Far easier to scale. than than these in 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.

The last year's focus on these drugs. Some would say hype. Will it continue? Will people keep talking about these same drugs the same way when there isn't a demand shortage? And is that good or bad? Like how do you think about sort of keeping the momentum going? I think that we are just getting started.

And there's a few reasons why that's the case. One actually is the shortage. So right now the things that people want to talk about, things that we talked about last year, things that impacted us was the shortage. But And that 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 gonna see, what are we gonna talk about in twenty four or twenty five is when it when it ends.

Right, millions of people are going to have seen the benefits. Well, then people are gonna wanna talk about well, what are the what are the what's the cascade 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 so

You know, only a few million people have this, but a hundred and ten plus million people are eligible. There's a long way to go. Before We're done. talking about this um because it really is uh and the the pipeline is tremendous as well.

So it's not just Bogovi or or Zepic or Z bound, Mujaro and Sixenda, but over the next three, five, ten years. You're going to see this We're s we're in the middle of this Cambrian explosion of our understanding of of cardiometabolic health, which will lead to all of these different

Invention. So I think that you will see the not only this drug and this drug class. But what this drug class spons. And in in terms of understanding our overall health. Zach, thanks for jamming with us. I I do appreciate it.

I appreciate the time and thanks for the great questions, Bob. 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 Zack saw it coming years ago. What strikes me most Is how progress can emerge in unexpected ways and unexpected areas.

When I first heard about these treatments, I viewed it 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 lifespans and health spans. And unleashing a slew of other opportunities. Of course, that potential isn't just about science. Businesses like Roe and others play a critical role in suring 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. Hey there, it's Jill Slessen. I'm launching a new show. It's called Money Moves, and your money is going to move. We're gonna help you make better financial decisions. We're gonna call out the BS you're finding all over social media. We're gonna give you actionable guidance to make your financial life clearer, less stressful. We're gonna answer your financial questions and take the mystery out of your financial life.

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