So when a deluge of research came out suggesting that drugs commonly used to treat diabetes could be startlingly effective at inducing weight loss and mitigating the negative health effects of obesity, demand for those drugs skyrocketed. Novo Nordisk, the Danish pharmaceutical giant behind Ozempic (a diabetes drug often sought for weight loss—though not FDA-approved for that purpose) and Wegovy (the new drug explicitly approved for treating obesity), has rapidly become the most valuable publicly traded company in Europe. Sales have risen 30% in the first half of this year, profits are up 40%, and the company is having to ration supply as production struggles to keep up with growth in orders.
In fact, demand for the drugs is so strong that it functionally prevented a recession in Denmark—headline GDP is up roughly 1.1% over the last year, but excluding the pharmaceutical industry it’s down -0.9%, meaning drugmakers alone have added roughly 2% to Danish economic growth. Booming exports and high dollar earnings are allowing Danmarks Nationalbank—the Danish Central Bank—to keep rates lower than they otherwise would in order to maintain their currency peg to the Euro. The boom’s timing was also almost perfect, helping to cushion Denmark’s economy against both the international shipping downturn that affected their massive international trade-related industries (especially Maersk) and the energy crisis that hit Europe in the wake of Russia’s invasion of Ukraine.
Joseph Politano
My first reaction to this fascinating piece of data is that it perfectly encapsulates America’s firm fixation with consumerism: instead of adopting a disciplined and balanced diet, American would rather consume one more thing to disregard the consequences. The next reaction: ironic for the people pointing out Europe’s supposed lack of innovation that such a popular drug – and inherently suited to the American lifestyle – would be developed overseas; perhaps Europe is not so insignificant as many would like the public to believe.
Yet in many ways, this is just part of the story of the rapid rise of GLP-1 drugs across the world and their growing economic effects. Obviously, it’s hard to speculate about the chances or possible effects of widespread adoption of these drugs when we remain so early in their rollout—but continued growth could have significant effects on food demand, insurance businesses, and the structure of healthcare services. More importantly, if these treatments do provide a durable way of combating the negative health effects of obesity and related risk factors, that could enable millions of people across the world to live happier, healthier, and more productive lives. Compared to that, stopping a recession might look like small potatoes.
A weight loss drug free of side effects would indeed bring significant changes to society, perhaps comparable to the invention of oral contraceptives. I haven’t looked at the studies, but we should be more cautious about the long-term effects of regular administration, which I don’t think have been researched in detail. Another certain irony here is the contrast between the reactions to mRNA COVID vaccines, which were met with apprehension and distrust despite the fact they were a two-dose regimen (initially at least), versus these drugs, which need to be administered constantly (so the overall dosage and health effects will accumulate over time) but have been embraced almost immediately and without scrutiny. I worry they will encourage the proliferation of unhealthy lifestyles and the flawed mentality that a ‘quick fix’ can be eventually found for any problem, including hard and complex issues such as global warming.
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