Economists have analysed the broader effects of new weight loss wonder drugs.

The increasing use of weight loss medications such as Ozempic, Wegovy, and Mounjaro is driving significant economic shifts with far-reaching global implications.

These drugs, which mimic the hormone GLP-1 to reduce appetite and promote weight loss, are already reshaping consumer habits and industries, with a Citigroup report highlighting substantial impacts on the food and fashion sectors.

In the United States, where the adoption of GLP-1 medications is more prevalent, approximately seven million people are using these drugs. 

This number is projected to rise to 24 million by 2035, altering demand across key industries. 

Adam Spielman, Citigroup’s head of future health, says calorie reduction will be a driver of change far beyond waistlines. 

“Most people reduce their calorie consumption by about 30 to 35 per cent” while on these medications, Spielman noted. 

This shift is impacting food consumption patterns, with studies suggesting that GLP-1 users increase their intake of fresh produce while reducing consumption of processed and sugary foods. 

Food companies are adapting by introducing products catering to smaller portion sizes and high-protein options.

Fashion is also seeing measurable changes. 

Spielman highlighted that in some parts of New York, where GLP-1 usage is high, women’s clothing sizes are decreasing. 

Retailers that fail to adjust inventory and sizing to reflect these changes risk losing market share, while luxury brands are poised to benefit from increased demand among customers investing in wardrobes for their changing physiques.

In Australia, uptake of these medications has been slower than in the United States, but early effects are becoming evident. 

Some businesses in the fitness sector have reported a decline in clients, attributing this to individuals choosing pharmaceutical solutions over traditional exercise-based weight loss methods. 

Beyond these immediate changes, GLP-1 medications hold potential for long-term economic benefits. 

Spielman predicts that by 2031, when patents for existing medications expire and generics become available, access to these drugs will increase substantially. 

The Citigroup report forecasts that hundreds of millions of people could be using GLP-1s within the next decade, potentially reducing healthcare costs associated with obesity-related illnesses while boosting productivity.

Spielman says that improved weight management leads to greater engagement with healthcare systems, as individuals feel more empowered to seek medical help. 

This could result in a short-term increase in demand for healthcare services, followed by long-term reductions in chronic conditions such as diabetes and kidney disease.

Despite their promise, the current requirement for injectable administration presents a barrier. However, pharmaceutical companies are actively developing oral versions, which could accelerate global adoption. 

The high initial costs of GLP-1s are another challenge, although these are expected to decline with generic production.

Additionally, behavioural changes associated with GLP-1 use may extend beyond health, potentially influencing industries like tobacco and alcohol. 

Reduced cravings reported by users may impact sales of these products, adding another layer to the drugs’ economic effects.

The full report is accessible in PDF form, here.

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