The Implications of National Weight Loss
Obesity results in myriad health complications, including higher risk for Type-2 diabetes, heart disease, high blood pressure, stroke, gallbladder disease, osteoarthritis, sleep apnea, at least 13 types of cancer, mental illness (e.g., depression) and body pain. With September being a month dedicated to self care, the statistics are worrisome. New drugs have come to market that show real, scientifically valid weight loss results. While these drugs may have one of the largest addressable markets of any drug today, they are expensive.
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The Implications of National Weight Loss
Obesity affects 42% of Americans.1
Obesity results in myriad health complications, including higher risk for Type-2 diabetes, heart disease, high blood pressure, stroke, gallbladder disease, osteoarthritis, sleep apnea, at least 13 types of cancer, mental illness (e.g., depression) and body pain. With September being a month dedicated to self care, these statistics are worrisome.
New drugs have come to market that show real, scientifically valid weight loss results. The Danish drug company, Novo Nordisk, was the first mover with the introduction of Wegovy (the higher-dose version of its diabetes drug, Ozempic, which gained popularity for its off-label use for weight loss).
Eli Lilly recently entered the weight loss drug sweepstakes with the approval of Munjaro for use to fight diabetes; the company may receive FDA approval for weight loss treatment by the end of 2023.
While these drugs may have one of the largest addressable markets of any drug today, they are expensive. For instance, Wegovy has a monthly wholesale cost of $1,349.2
Because patients have to take the drug indefinitely to maintain their weight loss, the cost of Wegovy is estimated to be $323,000 over 20 years, though the cost may decline over time as competition heats up and the R&D costs are recovered.3
These drugs have a number of side effects, a few of them potentially quite serious. Consequently it’s recommended that individuals consult with their doctors to determine if these drugs are appropriate and safe for personal use.
Investment Implications of a Thinner Population
Obesity costs the nation nearly $200 billion annually in obesity-related health care expenses, spawning a massive industrial complex to fight the consequences of obesity and prevent it.4 The big question for investors is what happens to these industries when obesity is no longer so widespread.
Health food stores, special foods, weight loss centers and weight loss spas may go the way of the dinosaur.
The medical devices industry may see serious upheaval. Makers of medical devices—such as glucose-monitoring systems and sleep-apnea machines—are at risk, as are certain other drugs that treat the effects of obesity. Even the robots used in bariatric surgery may suffer as demand for the surgery dips. The impact might also extend to doctors and companies connected with knee replacement surgery, kidney disease and heart failure machines.
More broadly, the implications for restaurants, bars and snack food industries may be equally significant since these drugs work by suppressing the appetite, reducing the urge to eat or drink. Imagine if even half the 42% of overweight Americans no longer crave sugar, snacks, beer or soda.
Welcome to a thinner, healthier world!
Sources:
- https://kffhealthnews.org/news/article/diabetes-drug-wegovy-weight-management-cost-benefit-debate/
- https://kffhealthnews.org/news/article/diabetes-drug-wegovy-weight-management-cost-benefit-debate/
- https://kffhealthnews.org/news/article/diabetes-drug-wegovy-weight-management-cost-benefit-debate/
- https://www.hsph.harvard.edu/obesity-prevention-source/obesity-consequences/economic/
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