Weight Loss Drugs and the Economy

The new class of weight loss drugs also have miracle drug impacts it seems and given that both good health and the lack thereof have enormous economic structures build around them, their impact is likely to be quite dramatic.

Some junk-food companies and alcohol sellers are freaking out about the prospect of reduced appetites or booze cravings. As they should: The average household with at least one family member on a GLP-1 is spending about 6 percent less on groceries each month within six months of adoption. That translates to about a $416 reduction in food and drink purchases per household a year. Spending reductions are even greater for high-income households, according to a new study by researchers at Cornell University and Numerator.

Some categories have been hit harder than others. For example, these households are spending about 11 percent less on chips and other savory snacks and 9 percent less on sweet bakery items. Select healthier foods, such as fresh fruits and yogurts, have gotten a very tiny bump.

There are some potential retail winners. For example, rapid weight loss has encouraged some patients to replace their wardrobes. Theclothingrental company Rent the Runway recently reported that more customers are switching to smaller sizes than at any time in the past 15 years.

Airlines could save significant money on fuel if passengers slim down en masse, a financial firm projected. Life insurers could cash in, too, given the many mortality risks linked with chronic obesity. “Generally, running a life insurance company right before immortality is discovered — cancer vaccines, antiaging therapeutics — is a good business to be in!” said Zac Townsend, CEO of the life insurance company Meanwhile.

Nearly every GLP-1 user I’ve interviewed in the past year has also mentioned spending money on new hobbies, such as pottery classes or pickleball leagues. Some deliberately picked activitiesto replace social engagements that revolve around food or alcohol; others said they simply gained the energy and self-confidence to try new things.

“I am way more active than I have been,” said Mitchell, whom I interviewed for a recent PBS NewsHour story about Ozempic economics. “I took my daughters horseback riding on the beach last Christmas. We’ve been snow tubing, things that I would have never thought to do.”

OK, some of this seems anecdotal. However:

The Danish pharmaceutical company Novo Nordisk, maker of Ozempic and Wegovy, nearly single-handedly kept its home country’s economy out of recession last year while most of Europe struggled. And because Americans are the primary customers of these meds, U.S. dollars flowed heavily into Denmark, causingthe Danish krone to strengthen relative to other currencies.

To keep the krone’s value steady relative to the euro, the Danish central bank had to cut interest rates. Put another way: Overweight Americans unintentionally helped Danes get cheaper mortgages.

Wow.

In any case, good health is good! And it has good effects!

Obesity is a chronic disease associated with dozens of other ailments, including joint problems and cancers. So helping Americans lose weight has the potential to make the public much healthier — and reduce spending on other (costly) care.

Seven women in Mitchell’s family, for instance, had breast cancer and both of her parents developed forms of dementia. Mitchell herself developed diabetes, too. All of these problems have linkages with obesity. “I don’t want to be sick,” said Mitchell,explaining why she turned to Wegovy after previously trying diets, exercise, therapy and surgery. “After taking care of my parents, I said, ‘I don’t want my children to have to take care of me.’” Her obesity is now in remission and she no longer has diabetes.

Of course, such potential health benefits — and cost savings — will materialize more broadly only if patients keep up with their medications and adopt healthier habits to help maintain lower weights. Which is a big if.

Research suggests most patients who wereprescribed these meds stop taking them within a year. Some stop because they’ve successfully reached their goal weight. But many others report stopping because of costs, unpleasant side effects, drug shortages or squeamishness about needles.

Who knows what will happen with all of this. But it sure is one of the more fascinating things to come along in the last couple of years. I bet RFK will have thoughts……