Pharmaceutical companies have high hopes for a new category of weight-loss medicines known as GLP-1 drugs. Basically, when administered monthly they alter the body’s production of hormones that control the brain’s perception of satiety – the sense of being full. They have become a sensation in the medical industry for coping obesity and diabetes, and a challenge to the food industry and its investors.
The two big brands currently are Ozempic and Wegovy. While they have been through years of testing like all new pharmaceuticals, ongoing research shows clear evidence of effectiveness.
I have a friend for whom this therapy has been a life-changer. GLP-1 drugs rose to public awareness recently when a Walmart executive reported that shoppers using such drugs were buying less food. While the fact that Walmart can track this is pretty creepy to me, the statement rippled through the whole food industry. These drugs seem to work better with fewer side effects than bariatric surgery or weight loss programs.
The impact on farmers could be subtle and possibly substantial as more and cheaper versions of these drugs are released in the next few months. For example, here is what one industry analyst found. The blue bars are GLP-1 buyer food volume changes. It shows good news for yogurt manufacturers, and that’s about it. Produce, dairy, meat and bread are examples of food groups that see decreased GLP-1 consumer demand.
The biggest loser, so to speak, is the snack food industry. But – as they say – wait, there’s more. While not fully understood, GLP-1 drugs have been used enough to show they reduce other cravings from alcohol to nicotine. They can improve liver, heart and kidney function as well.
Investors have noticed and share prices for products and services, such as dialysis to addiction treatment to cholesterol medicines, have been hammered by the potential of these drugs. The effect for farmers will be felt first by grain producers then as it works through the food chain, the protein and produce sectors.
Regardless of these economics and the impact on the food system, drugs such as Ozempic appear to be a huge advancement for human health, and a big and deserved win for the global pharmaceutical industry.
