Monday Morning Optimism

Are GLP-1s really a miracle?

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GLP-1 agonists like Ozempic—everyone’s favorite diabetes and weight loss drug—now show promise in treating Alzheimer’s, Parkinson’s, and heart disease (and a recent study suggests they don’t, as some feared, increase the risk of thyroid cancer).

This is incredible from a health, economic, and fiscal perspective. A lot has been written about the high costs of taking GLP-1 agonists—Ozempic is about $1,000/month—but the costs of the conditions they treat are even larger.

A few relevant (but totally noncomparable) estimates include:

• From 2024-2033, obesity-related diseases will cost Medicare and Medicaid an estimated $4.1 trillion.

• Reduced obesity from GLP-1 use could boost U.S. GDP by $100 billion a year by 2030, according to Goldman Sachs research.

• Alzheimer’s cost the federal government an estimated $206 billion in 2020.

• Parkinson’s disease costs the Federal Government $25 billion per year.

The costs associated with addictive behavior (like alcohol use disorder) are also astronomical, and there are ongoing trials to determine if GLP-1 agonists can treat these. Anecdotally, at least, these drugs are helpful in limiting smoking, drinking, and drug use disorders (not to mention nail-picking, compulsive shopping, and gambling).

There’s a lot of doubt surrounding the use of these drugs for treating conditions other than diabetes. Part of that comes from a disinclination to believe in miracle cures. Given the history fad weight loss drugs like fen-phen, which had unfortunate and deadly heart-melting side effects, I get that.

But maybe this time is different. If so, the fiscal, economic, and societal benefits will be absolutely massive.  

What’s Next

This week is all about today’s retail sales data and tomorrow’s residential construction data. We’ll cover those and the rest of the week’s economic news in our Week in Review post on Friday.