In today’s Finshots, we embark on a journey to understand how weight loss drugs are being presented as a means to cut healthcare costs in the US and whether they truly live up to these grand claims. These drugs, such as those from Denmark’s Novo Nordisk (Ozempic and Wegovy) and US-based Eli Lilly (Mounjaro), have made significant waves. Initially developed to treat type 2 diabetes, they have unexpectedly led to substantial weight loss. The potential of these drugs extends beyond weight management, with early studies suggesting they could aid in addiction treatment, address sleep apnoea, chronic kidney disease, and even cardiovascular problems. The global obesity crisis is a pressing issue, with over 1 billion people classified as obese. Analysts predict the market for these drugs could reach $130 billion by 2030. However, the reality is not as straightforward as it seems. While these drugs help people lose weight, recent studies show that overall medical costs do not decrease. In fact, for obese patients, costs can increase by 46% after two years of using the drugs. Despite the initial weight loss, there is no notable drop in obesity-related health issues. The problem lies in what occurs when the drugs are stopped. Their appetite-regulating effects fade, and the lost weight often returns. Moreover, studies indicate that a significant portion of the weight lost is muscle, which can slow down metabolism. So, while these drugs are a breakthrough, more research is needed to determine if they are a sustainable solution to the obesity crisis. Until then, share this story on WhatsApp, LinkedIn, and X. Finshots also has a new WhatsApp Channel! If you want the sharpest analysis of financial news without jargon, Finshots is the place to be! Click here to join.

Unraveling the Complexity of Weight Loss Drugs and Healthcare Costs

Initial Purpose and Unexpected Outcomes

These weight loss drugs were initially designed to manage type 2 diabetes by regulating blood sugar and reducing appetite. However, patients noticed a remarkable side effect - significant weight loss. This unexpected development led to their emergence as a potential solution for weight management. The ability of GLP-1 agonists to mimic the hormone that tells the brain one is full and helps release insulin has been a game-changer. Clinical trials have shown that consistent use of these drugs can lead to a substantial reduction in body weight, with people losing up to 15-20%. This has opened up new possibilities for addressing various health issues.

Potential Beyond Weight Loss

Beyond weight loss, these drugs show promise in tackling a range of chronic conditions. Early studies suggest that they could help reduce addiction to alcohol or nicotine, providing new avenues for addiction treatment. There is also evidence that they could assist with sleep apnoea, chronic kidney disease, and cardiovascular problems. Researchers are even exploring their potential in treating Alzheimer’s and Parkinson’s diseases. This one drug with multiple benefits could potentially lead to a significant reduction in healthcare costs for individuals.

The Cost Dilemma

Although these drugs offer hope, they come with a high price tag. A month’s supply can cost over $1,000, which is a significant burden for many people. Elon Musk has emphasized the need for these drugs to be made more affordable as obesity is a major public health issue. Analysts predict that reducing obesity-related healthcare costs could save billions in the long run. However, the reality is that while these drugs help people lose weight, they do not necessarily lead to a decrease in overall medical costs. In fact, for obese patients, costs can increase. This highlights the complexity of the issue and the need for more research to determine the true impact of these drugs on healthcare.