Down Angle Symbol A symbol in the form of an angle pointing downwards. Ozempic. Getty Images
- The U.S. economy will experience a growth spurt as more people begin taking GLP-1 drugs for weight loss.
- Goldman Sachs predicted that if 60 million Americans took a GLP-1 drug, US GDP would increase by 1%.
- “The main reason we see economic recovery from healthcare innovation is that poor health has significant economic costs,” Goldman Sachs said.
Goldman Sachs estimates that the more people take GLP-1 weight loss drugs, the faster the U.S. economy will grow.
The bank said in a note Thursday that if 60 million Americans take GLP-1 drugs by 2028, U.S. GDP would grow by another percent.
The idea behind Goldman's forecast is that poor health is a drag on economic growth because it reduces total labor supply and total hours worked through increased “lost days” from work, early death and informal care that leaves people vulnerable to hardship. can put a lot of strain on the workforce.
“Combining current losses in hours worked and labor force participation due to illness and disability, early deaths, and informal care, we estimate that GDP would potentially be more than 10% higher if poor health outcomes were not limiting the U.S. labor supply would,” said Goldman Sachs economist Jan Hatzius.
A drug that has shown promise for improving a variety of health outcomes for patients could ultimately have a significant impact on the overall economy.
“The main reason we see significant potential for healthcare innovation is that poor health has significant economic costs. There are multiple channels through which poor health affects economic activity, which could decrease as health outcomes improve,” Hatzius said.
Novo Nordisk and Eli Lilly's GLP-1 drugs are sold under the brand names Ozempic and Mounjaro to treat type 2 diabetes, and Wegovy and Zepbound to treat obesity.
Sales of the drugs have exploded as they cause dramatic weight loss in about 20% of body weight and have shown encouraging signs in improving sleep apnea symptoms and reducing the number of cardiac events such as strokes and heart attacks.
And with the U.S. obesity rate hovering around 40%, many Americans could be taking these drugs in the next few years.
Goldman estimates that between 10 million and 70 million Americans will be taking a GLP-1 drug by 2028, with the wide range driven by uncertainties surrounding adequate supply, insurance coverage and clinical trial results.
“If GLP-1 consumption ultimately increases by this amount and leads to lower obesity rates, we see scope for significant impact on the overall economy,” Hatzius said.
A spillover effect would be an increase in productivity. Hatzius cited scientific studies showing that overweight people are less likely to work and are less productive when they work.
“These estimates therefore suggest that health complications caused by obesity reduce more than 3% of per capita production, which, when combined with the over 40% incidence of obesity in the U.S. population, represents a decline in total production of over 1% “, explained Hatzius.
And if further productivity gains could be achieved through improved health outcomes, the impact on GDP growth beyond the current trend could be anywhere between 0.6% and 3.2%.
“Historically, advances in health have resulted in the number of years of life lost to disease and disability in developed world economies declining by 10% per decade, and we estimate that a 10-year advance in health progress exceeds current trends “In addition, the level of the US GDP could increase by 1%,” said Hatzius.
Goldman Sachs
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