The impact of GLP-1 drugs may surpass technological innovations like the internet and the iPhone, experts say. While the full extent of the changes may not be known for years, these drugs are already beginning to revolutionize not only people’s health, but also consumer behavior, which may have a huge effect on the economy.
“Based on early signals, GLP-1s may be catalyzing a behavioral and economic shift that’s on par with major technological breakthroughs,” write PwC US Consumer Markets Industry Leader Ali Furman and her co-author Paul Leinwand in the Harvard Business Review. From just a health standpoint, Furman says GLP-1s may rival the advances brought by antibiotics.
Furman also points out: “GLP-1s are…reprogramming [consumer] desire.”
Based on her research, Furman urges a variety of industries – from fashion to food – to anticipate consumer needs and desires as glucagon-like peptide-1 agonists gain traction. The timeframe is urgent, she says, as barriers to using these drugs already are falling, including cost, more readily accessible formats like pills over injections, and scientifically proven efficacy for a variety of health issues. “The demographic of folks on this drug is going to continue to grow probably at a very fast pace,” she says.
Focus on Obesity
Originally introduced to help control diabetes, GLP-1s are now being used and investigated for a wide range of health issues from obesity to dementia to addiction.
Focusing narrowly on obesity, which affects some 40.3% of US adults, according to the CDC’s 2021-2023 analysis, and costs the US economy more than $400 billion annually, the potential of GLP-1 drugs to address the obesity crisis could have a profound economic impact, Sandra Barbosu, associate director of the Information Technology & Innovation Foundation’s Center for Life Sciences Innovation, and Natalie Khoo, a student at Kings College London, write in an analysis titled A Shot at a Healthier Future: The Transformative Potential of GLP-1s.
The strain on the health care system is notable with obesity-related chronic diseases, including diabetes, hypertension and cardiovascular conditions, increasingly responsible for federal health care spending in programs like Medicare and Medicaid, and contributing substantially to the federal deficit. Barbosu’s research shows that “obesity alone is estimated to account for nearly 42% of the federal primary deficit,” citing a 2023 Joint Congressional Economic Report.
Obesity also contributes to reduced economic output through lower productivity, due to increased worker sick time and workplace injuries, Barbosu says. Her study also documents data on social factors, such as workplace discrimination based on appearance and unconscious biases, and wage gaps between individuals with obesity and those with lower body mass index levels.
“I think one of the biggest reactions [to our research] is that people haven’t imagined the range of industries that obesity can impact,” Barbosu says.
For instance, Barbosu and Khoo examine the impact on the transportation industry, showing that increases in passenger body weights contribute to higher fuel usage, environmental consequences and costs. She offers examples of how several airlines have responded, with Samoa Airways using weight-based ticket pricing and Finnair offering voluntary passenger weight checks to better predict fuel requirements.
Other consequences of obesity include its effects on national defense. It now is the most common disqualifying factor for military service in the US, according to Barbosu’s research.
Emergency responders and hospitals are grappling with the added costs of retrofitting buildings, vehicles and health care equipment to accommodate those with obesity.
Barbosu argues an important step in addressing the economic toll of obesity is to fully and accurately assess the positive economic impact GLP-1s may have. Currently, the Congressional Budget Office does not use a method called dynamic scoring, which takes into account the impact of GLP-1s across the whole economy. The CBOs numbers reflect solely the savings on health outcomes.
“It’s kind of a narrow view the CBO is taking,” Barbosu says. “If you think a little bit more broadly about the different industries that obesity impacts, then you can start thinking about the potential for savings.”
A broader budgetary perspective may also encourage greater government investment in the research and development of GLP-1s and other therapies to treat obesity if the numbers show the true magnitude of the potential economic payback, Barbosu says.
What consumers want
Consumers’ initial interest and awareness of GLP-1s exceed that of technologies like the iPhone, Facebook and Amazon Prime, according to Furman’s research, which used Google Trend data.
“What’s particularly fascinating about that gap between consumer interest in Ozempic versus some of the technological disruptions is when you consider the barriers to entry for a GLP-1 drug versus an iPhone, as an example. It’s quite a stark difference,” Furman says, noting that the barriers such as needing a prescription, cost and often lack of insurance coverage haven’t mitigated consumer interest, foreshadowing major opportunities – as well as challenges – across multiple industries as consumer behavior evolves to fully embrace these drugs.
“We believe we could be entering this era of a physiological disruption leading to so many broader societal and consumer behavioral implications, many of which are unknown,” Furman says. “There are just so many potential implications associated with a drug that affects consumers’ bodies and minds – every aspect of their health journey. You know, when the iPhone came out, I don’t think anybody predicted Uber or Netflix.”
Those taking GLP-1s already are providing hints of the changes in consumer behavior that Furman’s research indicated. For instance, the survey shows changes in apparel purchasing, with a 4% to 5% rise in spending about six months after beginning GLP-1 treatment. While some of that may be due to getting clothes that fit better after losing weight, Furman’s research also shows that some of the purchases were due to feeling more confident and wanting more form-fitting activewear to proudly align with a new identity.
“Certain categories of ath-leisure apparel are up, related to this phenomena,” Furman notes, adding another example of a retailer who recently told her demand for wide-calf boots was down.
Respondents also indicate a changed perspective about fitness – from exercising with the aspiration to lose weight to a maintenance routine to maintain muscle mass. Some did report exercising less frequently due to the effectiveness of GLP-1s for weight loss.
Spending on fast food, snacking and alcohol declined, but dining out at full-service restaurants for the social experience increased. GLP-1 users tend to spend 6% to 8% less on groceries, Furman notes. To put these changes in perspective, Furman estimates that the average American spends between $175 and $179 a year on desserts. If 20 million people eventually are being treated with a GLP-1, and experience less appetite for sweets, that adds up to billions in lost revenue for that sector.
“We’re advising businesses to take a hard look at this phenomenon, make sure they stay close to the trends and be educated on the trends because while it does present headwinds for some of our food and beverage, consumer package goods companies and grocers and retailers, it also presents opportunities,” Furman says. “Our advice is to have a framework, develop a strategy around how to capitalize on some of the opportunities that this new demographic is creating.”
These are early days in the adoption of GLP-1s, and, as Furman notes “we’re just scratching the surface on understanding the full suite of implications that this is going to have.”
But the survey results are revealing: “We see a very strong thread around people saying they feel happier and more self confident when they’re on this drug,” according to Furman. “And when you consider perhaps in 10 years that some experts project 75% of the US adult population may be on this drug – a happier, more self confident society? That could mean seismic shifts in our culture.”
