The economic fallout of Ozempic—and how it may impact docs
Key Takeaways
GLP-1 receptor agonists, such as Ozempic, have become wildly popular due to their weight-loss effects.
The emergence of these drugs has raised concerns among food and snack makers that their bottom lines might be affected if enough people start taking them.
It will take some time to see whether GLP-1 use will have a meaningful impact on company profits for the snack and food industry, but it's not the only one who may experience an economic downturn—experts believe the healthcare industry will also be affected.
GLP-1 receptor agonists help people lose weight by curbing appetites. The public health benefits of alleviating the obesity epidemic and reducing the poor health outcomes that go along with it are unquestionable.
The emergence of semaglutide drugs, such as Ozempic, is the “first big breakthrough besides bariatric surgery that has offered people with obesity real help,” according to Marion Nestle, MPH, PhD, Paulette Goddard Professor of Nutrition, Food Studies, and Public Health, Emerita, at New York University.
But those trends could be causing one group of companies, in particular, some distress: snack makers. If a large enough group of people start eating less due to their Ozempic prescription, it could have a huge impact on their overall profit. But this is not the only sector that may experience an economic impact—what about the healthcare industry?
Reduced intakes, reduced profits
One study in Diabetes, Obesity and Metabolism showed that adults with obesity ate 35% fewer calories on semaglutide than on placebo and had reduced food cravings and improved control of eating.[]
Dr. Nestle, who has written several books on the politics of food and nutrition, tells MDLinx she thinks the food industry is terrified. “If people stop eating junk foods, that's going to cut into profits. And there certainly is evidence that the sale of these products is down,” she said, citing inflation as another potential factor.
As reported by the Wall Street Journal, major food makers like Campbell Soup and Conagra Foods started handling questions from investors about how the popularity of the GLP-1 drugs might affect the bottom line while also exploring ways to adapt to the changing landscape.[]
Morgan Stanley projected that companies making foods high in sugar and fat, like cookies and salty snacks, might feel the greatest pinch. Research has shown, in fact, that snacks typically account for a quarter of the average US adult’s daily energy intake.[]
The well-known side effects and the high cost of GLP-1 drugs add other variables to the complicated assessment of the economic effects.
“I think the jury is still out on what their long-term implications are, because what I've seen is that a big percentage of the people who go on these drugs go off them within the first year, either because of side effects or because they cost too much,” Dr. Nestle says.
The food industry adapts
GLP-1 drugs seem to be having a profound effect on how people are thinking about food, says Dr. Nestle. “What people tell me is that they lose interest in food. And in particular, they lose interest in junk food.” She adds that the medications “shut down the food noise” that drives people to reach for unhealthy snacks.
This has makers of these products scrambling to respond with new products—foods, supplements, and others—designed for users of the GLP-1 drugs, CNN reported.[] Nestlé, for example, came out with a new line of frozen meals high in protein and fiber “intended to be a companion for GLP-1 weight loss medication users and consumers focused on weight management” and launched a website billed as a resource for this group of individuals.
Other companies, such as GNC, Daily Harvest, and Optavia, also have added new sections or products to cater to this segment of consumers.
“Companies that look at this as a marketing opportunity, and there are plenty of [these] companies, are going to move in on it,” Dr. Nestle says. “And whether they will succeed or not, we have no way of knowing.”
Potential impact on the business of healthcare
Also murky is what the long-term impact of the GLP-1 drugs’ emergence might have on various healthcare businesses if fewer people are undergoing treatments for obesity and its complications.
Companies involved in the treatment of obesity and its complications—manufacturers of devices involved in bariatric surgery or sleep apnea, for instance—have tried to ease concerns about the potential impact of the GLP-1 drugs, as highlighted in a 2023 Reuters story.[]
Company representatives and analysts pointed to some of the same issues as the food makers—high drug costs, iffy insurance coverage, and questions about long-term adherence—to highlight the uncertainty about a long-term impact on business.
It's likely, too, that these medications will spur the creation of additional types of businesses looking to take advantage with supportive products and services. BioPharma Dive reports that new companies aimed at encouraging lifestyle changes, managing the side effects, collecting data on use and potential novel benefits of the drugs, and tracking shortages have emerged.[]
But even if these medications are helping people shed pounds, it is important they maintain a connection to the healthcare system, Dr. Nestle says. “The ones who have lost the most weight among the people I've talked to are the ones that are working most closely with physicians,” she says—as they are the ones who make dosing changes and monitor side effects closely.
Good news for public health
Although the rise of GLP-1 drugs is making the food and snack industry nervous, and is doing the same for manufacturers or companies involved in treating obesity, the boon for public health is clear.
“We know that eating less is bad for business. We've known that for a long time,” Dr. Nestle says. She notes the food industry “developed a food environment that encouraged people to eat more.”
"The trend towards healthier eating is very bad news [for business]. From a public health standpoint, it's very good news."
— Marion Nestle, MPH, PhD,
Still, there is a potential downside to the drugs: “The one thing that worries me about the drugs is they make people lose their taste for food, and that takes away an enormous pleasure in life," she says. "Food is one of life's greatest pleasures. It would be a shame if people lost that.”
What this means for you
Rapid growth in the popularity of the GLP-1 drugs for weight loss has raised questions about whether other sectors, like the food and snack industry, might start feeling the pinch. However, the same factors that influence long-term adherence to the medications for your patients, like side effects and high costs, make it difficult to interpret what is going to happen over the long term on the business side of healthcare.