Weight loss drugs effectively regulate impulse control – and the effects go far beyond snack food.

Our economy is built on impulse purchases. The secondary effects of GLP-1 drugs will cause what has been called a “$100 trillion dollar disruption.”

I’m not talking about societal changes deep in the future. Much of this is on a five-year timeline.

You’ve heard of Ozempic and Wegovy, the brand names used by Novo Nordisk since FDA approval in 2021. Eli Lilly joined the market in late 2023 with Zepbound. Brand names will come and go; the generic term is GLP-1 drugs.

A significant portion of the adult population will be taking GLP-1 drugs, sooner than you think. More about that below.

Industries that rely heavily on impulse purchases, like movie theaters and the NFL, are already foreseeing the potential impact and are exploring changes to their business models, such as focusing on experiences rather than impulse buys.

Five major casinos in Las Vegas are shrinking their restaurant and bar space by 35% and expanding wellness spas and medical tourism facilities.

About 40% of retail tenants in shopping malls rely on impulse purchases for profitability. America’s largest mall operator, Simon Property Group, is converting anchor stores into medical centers and wellness spaces.

Almost three quarters of movie theater profits come from concessions, primarily from impulse purchases made by people who swore they “wouldn’t buy anything.” AMC Theaters is testing “micro-portion” concessions and “experience-focused” premium seating.

The NFL is redesigning stadiums, converting concession space into “experience zones.” They know that in five years, selling $14 beers and $8 hot dogs won’t pay the bills. The future is about selling experiences that don’t rely on impulse purchases.

The traditional advertising model, which focuses on triggering emotional responses and converting them into impulse purchases, is facing a crisis. This is leading to a shift towards a new marketing economy focused on long-term wellness and subscription models.

GLP-1 drugs represent an inflection point in obesity treatment because they’re the first medication that works by targeting the critical pathways of the brain that regulate food intake and storage. But new research is confirming that the effects of GLP-1 drugs extend beyond food intake.

One recent study evaluated more than 2 million people taking weight-loss drugs over six years and found widespread associations with benefits to cognitive and behavioral health.

Ziyad Al-Aly, the director of the Clinical Epidemiology Center at the VA St. Louis Health Care System, described the secondary effects of GLP-1 drugs this way.

“Interestingly, GLP-1RA drugs act on receptors that are expressed in brain areas involved in impulse control, reward and addiction — potentially explaining their effectiveness in curbing appetite and addiction disorders.”

The first-order effects of the drugs are the ones you’re familiar with: weight loss, healthcare savings, reduced food consumption. But other societal disruption will come from secondary effects of the drugs when they become widespread. From an article arguing that the economic disruption from GLP-1 drugs will be the biggest transformation of our lifetime:

The significant economic impact occurs in the second and third-order effects.

Consider this: When alcohol consumption drops 40% (as it does for many people on these medications), we’re not just talking about lower beer sales. We’re talking about:

– 45% reduction in DUIs

– A 28% drop in violent crime

– A fundamental restructuring of the social economy

– A transformation of dating apps and social media engagement

– A reimagining of every restaurant’s business model

Analysts predict that by 2030, 30-40% of American adults will be on these medications, changing consumption patterns for 80 million people or more.

You’re skeptical. 2030 is only five years away. Maybe you know a few people taking Ozempic or Wegovy, but the drugs are expensive and not covered by many insurance plans – how can the projections be so high?

Part of the answer is that supply has been constrained – a problem that will be solved very shortly.

Novo Nordisk and Eli Lilly were caught by surprise by the demand for the first generation of GLP-1 drugs. They didn’t have the manufacturing capacity to ramp up immediately.

The drug companies have begun to construct the largest-ever drug manufacturing facilities in the world to increase supply. It takes 3-4 years for a manufacturing facility to become operational after the decision to commit capital is made. Supply will catch up to meet demand later this decade.

More importantly, though, is that we are still learning what these drugs can do.

Ozempic has FDA approval for treatment of Type 2 diabetes. Wegovy has FDA approval for reducing the risk of major cardiovascular events by 20% in people with obesity. Eli Lilly got FDA approval to offer Zepbound for sleep apnea at the end of 2023.

But look at what might be coming! There are at least 23 studies in progress for the treatment of diseases beyond obesity. Imagine a steady drumbeat of success in prescribing GLP-1s for heart disease, kidney disease, and liver disease; protection against neurodegenerative disorders and decreased risk of Alzheimer’s and dementia; decreased risk of addiction to substances such as alcohol, cannabis, stimulants, and opioids; and improvement in smoking abstinence.

A Goldman Sachs analyst sees a virtually limitless market if the tests are successful.

“The large number of GLP-1 outcomes studies in progress for the treatment of several diseases beyond obesity suggests the potential for a dramatic increase in the demand for GLP-1s over the coming years. In a scenario in which all of the 23 upcoming studies are successful, we estimate that nearly 70 million people in the US may take GLP-1s in 2028.”

The major manufacturers are racing to create variations on what is already available, to keep their competitive edge and protect their patents.

Today the drugs are administered with weekly injections. Trials are underway on longer-lasting options for injectables, and the manufacturers are working on simpler and more convenient autoinjectors.

Oral GLP-1s will enter the market in 2027/2028; they are less complex, cheaper to manufacture, and will be offered at lower prices. A few days ago Eli Lilly reported preliminary results from its trial of an oral GLP-1 drug, which appears to be as effective as injectables.

GLP-1 drugs are expensive. That is an obvious barrier to these rosy pictures of widespread adoption. MIT Professor of Economics Jonathan Gruber put it this way in the Goldman Sachs report:

“I, together with Brian Deese and Ryan Cummings, estimate that the cost to state public insurance programs, health insurance exchange subsidies, and US taxpayers if 40% of all Americans with obesity took these drugs at current prices—roughly $15,000 per year per person—would total over $1 trillion annually. . . . That is almost as much as the government spends on the entire Medicare program and almost one-fifth of the entire amount America spends on healthcare. So, it’s a staggering figure.”

Employer coverage will almost certainly increase in the next five years, driven by lower price points, increased supply, rising employee demand and GLP-1s’ demonstrated health benefits.

The outlook for Medicare coverage is much harder to predict. Medicare does not cover the drugs today for anti-obesity, but the FDA’s recent approval of Wegovy for the prevention of heart disease led to Medicare coverage of the drug for this indication. If the studies for the treatment of sleep apnea, liver disease, and other diseases are successful, that could raise the odds of Medicare coverage.

This year’s political chaos does not bode well for spending more federal money on Medicare any time soon. Even psychics are taking a break from predicting the future right now.

On the one hand, then, we are closer than you realize to a healthier, more productive society with lower healthcare costs, less crime, and higher economic output.

If, however, Medicare fails to step up and GLP-1 drugs are only available to employees with private insurance coverage and families wealthy enough to afford them, then they may also contribute to widening inequality and a two-tier society divided not by education or wealth, but by behavioral control.

Early consumer data on GLP-1s shows a 65% reduction in response to food advertising, 40% lower click-through rates on impulse products, and an 85% decrease in late-night online shopping. There are already studies showing that employees taking GLP-1 drugs are more likely to be promoted.

We don’t yet know who will be included or how it will be paid for but the takeaway is that societal changes are coming, no matter how you slice and dice the numbers and projections.

If you’re interested in the nuances and details, start with the Goldman Sachs report, which nicely summarizes all the trends that turned up in my research.

And the Acquired podcast on Novo Nordisk is fascinating. It spends half its time on the history of Europe’s most valuable company – “an incredible 100+ year history filled with Nobel Prizes, bitter personal rivalries, board room dramas, a generation-defining silicon valley innovation, lone voices persevering against all odds — and oh yeah, the world’s largest charitable foundation at its helm.” The remainder of the podcast covers the development of Ozempic and Wegovy and the business strategies for the next five years. Highly recommended.