By Bill Knudson
Introduction
GLP-1 drugs are a class of medications that were originally designed to treat type 2 diabetes but are increasingly being used to treat obesity (Cleveland Clinic). It is estimated that over 50 percent of the population in the U.S. will be obese by 2030 (Lumbreras et al.). In a 2025 survey conducted by Gallup, 12.4 percent of the respondents used a GLP-1 drug (Noguchi). GLP-1 drugs increase the amount of insulin production and reduces blood sugar levels. These drugs also slow stomach emptying and affect areas of the brain that trigger hunger (Cleveland Clinic, Mullally). As a result, these drugs reduce hunger and cravings and reduce the amount of food a person using these drugs consumes. This allows a typical user of these drugs to lose weight.
This short paper discusses some of the ways GLP-1 drugs will impact the U.S. economy. The sectors included are the agri-food system, health care, and the transportation sector. GLP-1 drugs have the potential to dramatically impact the U.S. economy.
The Agri-Food System
It is estimated that users of GLP-1 drugs consume up to 21 percent fewer calories; as a result, the food system could see sales decline by $30 to $55 billion (Lucas). This reduction in food consumption will eventually be passed down to farmers in the form of lower prices for most agricultural commodities. Corn, soybeans, sugar, and perhaps potatoes are probably most threatened by an increase in the use of GLP-1 drugs.
The demand for most dairy products is likely to decline. This is especially true for cheese, butter, and ice cream. Yogurt, cottage cheese, and whey consumption is likely to increase. The demand for lean cuts of meat is likely to be steady or increase somewhat but pork and many beef cuts will be under pressure. The demand for vegetables and some fruits is likely to increase.
Spending at restaurants is going to decline, especially at fast food restaurants and coffee shops. So will spending at those restaurants that serve alcohol (Lucas), a traditional profit center for many restaurants.
To summarize, while there are limited opportunities in the agri-food sector, the widespread adoption of GLP-1 will be a net negative for firms and farmers in the agri-food system. It is important for the agri-food system to expand exports to offset the decline in demand in the U.S.
Health Care
The widespread adoption of GLP-1 medications will impact the mix of health care used. Currently, these drugs are expensive, and most health care plans do not cover GLP-1 medications solely for weight loss. Also, the benefits for most users of these drugs are transitory; nearly two thirds of patients discontinue treatment before 12 weeks, and more than 40 percent stop after four weeks (Blue Cross Blue Shield). Patients usually gain weight after discontinuing the medication, reducing the long term benefits. It may be the case that for these drugs to be truly effective, the patient may need to take them for several years or the remainer of their lives.
Source : msu.edu