“GLP-1 Weight-Loss Drugs Could Boost US Economy by 1% – Goldman Sachs Analyst”
In a recent note from Goldman Sachs, Jan Hatzius, the chief economist, highlighted the potential economic benefits of increased usage of GLP-1 weight-loss drugs in the United States. According to Hatzius, if 60 million Americans were to take these drugs by 2028, the US GDP could see an additional 1% growth.
The rationale behind this assertion lies in the impact of health-related issues on labor force participation and overall economic growth. Obesity, in particular, is linked to a higher risk of serious health conditions such as heart attacks, strokes, and diabetes, which can limit individuals’ ability to work and contribute to the economy.
Hatzius emphasized that poor health outcomes result in significant economic costs, estimating that GDP could be over 10% higher if health-related limitations on labor supply were eliminated. This underscores the potential economic benefits of improving health outcomes through innovative healthcare solutions like GLP-1 drugs.
GLP-1 drugs, including brands like Ozempic, Mounjaro, Wegovy, and Zepbound, have shown promise in treating type 2 diabetes and obesity. Sales of these drugs have surged, with some users experiencing substantial weight loss of up to 20%. A recent study even demonstrated a 20% reduction in the risk of heart attacks, strokes, and cardiovascular death among patients using Wegovy for weight loss.
Given the high obesity rate in the US, which stands at around 40%, the potential market for GLP-1 drugs is substantial. However, the extent of their adoption will depend on the outcomes of ongoing clinical trials and the willingness of health insurers to cover them.
One of the key spillover effects of increased usage of GLP-1 drugs could be a boost in productivity. Studies have shown that obese individuals are less likely to work and are less productive when they do. By addressing obesity-related health complications, there is potential for a significant increase in per-capita output and overall economic productivity.
Hatzius also highlighted the historical impact of health advancements on economic growth, noting that a 10-year step forward in health progress could raise the level of US GDP by 1%. If this trend continues, the GDP growth rate could exceed its current trajectory by 0.6% to 3.2%.
In conclusion, the potential economic benefits of widespread adoption of GLP-1 weight-loss drugs in the US are significant. By improving health outcomes, reducing obesity rates, and increasing productivity, these drugs have the potential to not only enhance individual well-being but also drive substantial growth in the broader economy.
This analysis underscores the interconnectedness of health and economic prosperity, highlighting the importance of innovative healthcare solutions in shaping the future trajectory of the US economy.