Increased utilization of GLP-1 weight loss medications could significantly accelerate the growth of the United States economy, Goldman Sachs projects. The financial institution forecasts that the U.S. Gross Domestic Product (GDP) could expand by an additional 1% if 60 million Americans were to adopt GLP-1 therapy by 2028.
This projection is grounded in the understanding that health-related challenges pose a substantial obstacle to economic advancement by reducing the overall labor force availability and productivity due to increased absenteeism, premature mortality, and the diversion of labor to informal caregiving.
Goldman Sachs' analysis suggests that the American economy might see over a 10% increase in GDP if health-related limitations on labor were eliminated. "The significant economic toll exerted by poor health highlights the vast potential for healthcare innovations to stimulate economic growth. Improved health outcomes could alleviate the economic burdens of illness through several mechanisms," stated Jan Hatzius, Chief Economist at Goldman Sachs.
GLP-1 medications, including Ozempic and Mounjaro by Novo Nordisk and Eli Lilly respectively, alongside Wegovy and Zepbound for obesity management, have surged in popularity due to their substantial effects on weight loss—approximately 20% of body weight—and improvements in related health conditions such as sleep apnea and cardiovascular events.
Given that approximately 40% of the U.S. population battles obesity, the potential market for GLP-1 therapies is vast. Goldman Sachs anticipates that between 10 to 70 million Americans could be using GLP-1 medications by 2028, though this estimate is subject to factors like supply chain stability, insurance coverage, and the outcomes of clinical trials.
The broader economic implications of increased GLP-1 usage, should it lead to reduced obesity rates, are considerable. Hatzius pointed to research indicating that obesity diminishes workforce participation and productivity, with obesity-related health issues reducing per capita output by over 3%, equating to more than a 1% decrease in total output given the current obesity prevalence in the U.S.
Further, the potential for health improvement to boost productivity and, consequently, GDP growth is significant, ranging between 0.6% and 3.2%. "Advancements in healthcare that reduce the years lost to disease and disability by 10% per decade in developed markets could, if accelerated beyond current trends, enhance U.S. GDP by 1% over a ten-year period," Hatzius added, underscoring the economic value of health innovations.
