A notable boost in the United States’ economic growth could be on the horizon, spurred by an uptick in the usage of GLP-1 weight-loss medications. Analysts from Goldman Sachs speculate that a significant adoption of these drugs could lead to a 1% increase in the country’s Gross Domestic Product (GDP).
According to a recent analysis, should 60 million American citizens turn to GLP-1 drugs by 2028, the national economy might witness a sizable expansion. Jan Hatzius, Goldman Sachs’ chief economist, articulated that health complications are a hindrance to workforce participation, thus restraining economic development. Conditions such as obesity are linked to increased risks of severe health issues like heart disease, stroke, and diabetes.
“Combining current losses in hours worked and labor force participation from sickness and disability, early deaths, and informal caregiving, we estimate that GDP would potentially be over 10% higher if poor health outcomes did not limit labor supply in the US,” Hatzius elaborated.
Innovative treatments that yield improvements in patient health could, therefore, have a profound impact on the economy at large. “The main reason we see meaningful upside from healthcare innovation is that poor health imposes significant economic costs. There are several channels through which poor health weighs on economic activity that could diminish if health outcomes improve,” added Hatzius.
GLP-1 medications, such as those produced by Novo Nordisk and Eli Lilly, are marketed under various brand names to address type 2 diabetes and obesity. These drugs have gained traction due to their effectiveness, with some patients reporting substantial weight loss.
Recent research has shown that the use of GLP-1 drugs like Wegovy can curtail the risk of cardiovascular incidents by 20%. With obesity rates in the US around 40%, the potential for these drugs to be prescribed widely is immense, contingent on clinical trial outcomes and insurance coverage decisions.
Hatzius believes that an increase in GLP-1 drug usage could lead to notable economic benefits. Improved health can equate to heightened productivity, as studies suggest obesity is linked to reduced work participation and efficiency. “These estimates therefore suggest that obesity-related health complications subtract over 3% from per-capita output, implying an over 1% hit to total output when combined with the over 40% incidence of obesity in the US population,” Hatzius explained.
The overall impact on GDP growth could be substantial if health advancements lead to greater productivity gains. “Historically, health advancements have lowered the number of life years lost to disease and disability by 10% per decade in DM economies, and we estimate that a 10-year step forward in health progress in excess of current trends could raise the level of US GDP by 1%,” concluded Hatzius.
